And mobile revenue increases year over year on Black Friday, as more shoppers turn to their smartphones, a new study finds.
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After users search the database, their preferences and any personal data they choose to disclose will become part of a profile dubbed My Virtual Me. These details then will be vetted with sellers whose merchandise fits the parameters. When consumers return to the site, they’ll log into My Virtual Me to view bidding merchants’ prices, available rebates, and commissions that Youknowbest will earn on the sale. The user then will click through to a retailer to buy the merchandise directly.
Although many other shopping bots, including MySimon, Jungle and Dash, provide similar services, Youknowbest differs in its privacy assurances, according to Wight and his development team. If customers choose, they can remove their profiles from the site and download them for safekeeping at home. “You can take the information off our servers and share it with family and friends or put it in your hand-held computer and take it to Best Buy to compare,” says Geraghty, the site’s director of market development.
Youknowbest engineers are still working on the security protocols that will assure users that the site holds on to nothing once a customer opts to remove it. Such assurances are necessary at a time when tracking customers and their purchasing patterns is taking a beating in the press. “It is going to become clear that what these companies know about you is incredibly frightening,” Wight says. “People will say, ‘I’m not shopping on the Web.’”
One bot too many?
Beyond its approach to privacy, Wight says Youknowbest will part company with competing bots by offering “non-biased” product information. While some competitors charge retailers for listing their products-just as Web sites pay search engines to be listed under keywords-Youknowbest will make money only if consumers complete the sale. Plus, if three TV retailers pay commissions of 3, 5 and 7%, Youknowbest says it will take the lowest and give the rest to the shopper.
By the end of the year, Wight expects to have struck commission deals with “thousands” of merchants and manufacturers. But that may be too late, since industry watchers doubt a new comparison shopping business can do well in such a crowded space. Yahoo, Excite, Alta Vista and other portals already feature shopping engines, while independent bots are likely takeover targets for the few without. “All portals pretty much want to do the same thing,” says Seema Williams, senior analyst at Forrester Research in Cambridge, Mass.
On top of that, shopping bots are struggling with business models that emphasize click-throughs and commissions from retailers. “Merchants are reluctant,” says Ken Cassar, analyst at Jupiter Communications. “They don’t want to be evaluated solely on the basis of price.” And like the merchandise they search for, shopping bots are seen as commodities by the companies acquiring them. “The revenue stream is less important,” Cassar adds, referring to Amazon’s purchase of Jungle and CNet’s $700 million buy of MySimon. “They’re more important as drivers to other sites.”
Yet Williams and other analysts sees a window of opportunity for shopping bots geared toward consumers who want to buy several items at once and who still need help finding the right product. “With an extremely large amount of noise in the retail space, consumers are seeking tools that help them make that decision,” agrees Liz Leonard, senior analyst for Gomez Advisors, Lincoln, Mass. In fact, comparison shopping sites played an important role in the 1999 holiday shopping season. As the season opened the final week of November, shopping bot traffic rose 71%.
Youknowbest’s model could be successful, says Ken Neibaur, vice president of e-commerce at Alta Vista, provided the site can generate enough traffic. “I don’t think anyone has the market cornered,” he says. A new bot must offer value that rivals do not, adds Leonard. “If the company is able to make it a personalized tool, lending a personal touch to a very impersonal online space, it may be successful,” she says. “Whether it’s profitable or not is questionable.”
Wight says he’s far from worried about profitability. He expects the site to generate $1 million its first year-and maybe as much as $24 million by year two. To reach that, he plans to spend millions on marketing-mainly on banner ads, but also national TV, newspaper and radio spots-once the site debuts. As for profits in the long run, under Wight’s scenario, he may never have to worry. Following the footsteps of other bots, Youknowbest soon may be in for you-know-what: That’s right, an acquisition. •
Christine Blank is a freelance writer based in Orlando, Fla.
1999 to present: Chairman and CEO of Youknowbest.com, Celebration, Fla.
1997 to 1998: Director and general manager at Microsoft Corp., Redmond, Wash.
1994 to1996: President, Avail Systems (sold to Wang Labs),Boulder, Colo.
1984 to 1994: General manager, Maynard Electronics, Lake Mary, Fla.
- Education Course work at Wright State University, Dayton, Ohio