But the social network’s advertising revenue grew 18.4% during the quarter.
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Pinpoint Shopping is the centerpiece of the inStore site because it allows consumers to compare features and prices of millions of products from thousands of online merchants, Gurion says. Pinpoint’s predecessor, AOL Shopping Search, searched only the sites of AOL’s 250 retail partners. Pinpoint also enables shoppers to search for products across the entire web, she says.
That comparison function brings more value to both AOL subscribers and non-subscribers, says Patricia Freeman Evans, retail analyst at Jupiter Research. AOL subscribers had complained that Shop@AOL was just a collection of banner ads. “InStore has given them a more robust shopping comparison service, rather than the advertising-oriented environment they had,” she says. “It still will have an ad component to it, but they now have the additional benefit of the comparison engine.”
As with other shopping engines, the Shopzilla application at inStore sorts search results. For example, a search for a dishwasher produces not only appliances but also dishwasher-safe food processors, dinner and cookware. InStore also provides a Remember It function, which stores viewed items to a shopping list. It is very much like Shopzilla’s Shopping List, with the exception that inStore shoppers have to register to store products while Shopzilla shoppers do not. Shoppers in both can simply store items or compare items.
Despite these features, inStore doesn’t have the extensive reviews of both products and retailers as do sites such as Shopzilla and Shopping.com, putting inStore at a disadvantage, Johnson says. “Certainly, the more established players have more to offer both consumers and retailers just because they’ve had more time to develop their sites,” she says.
AOL has high hopes for inStore and expects a majority of its 75 merchant partners to renew their agreements for another year, Gurion says.
AOL will continue to add features to meet the needs of both users and retailers, Gurion says. “We’re constantly evolving, both from a product perspective and from a user perspective,” she says. “Shopping behavior online changes constantly, so we’re trying to anticipate what users want and deliver an experience that matches that behavior.”
If inStore is not a resounding success yet, it’s a start, analysts say. “AOL struggled in the last couple of years to get relationships and the selling environment right for retailers,” Johnson says. “InStore is the closest they’ve come to satisfying retailers’ needs for qualified leads.”