E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Comparison shopping goes from best practice to commonplace
A home improvement retailer recently ran a TV spot showing a husband calling his wife on his cell phone to check prices on washing machines while he staked out the one that he wanted at the store. While on the phone, the sales associate leans over to him and says, “Don’t worry. We have the best price, guaranteed.”
That scenario, says analyst Nikki Baird, is far from the way things usually play out among shoppers today. “Consumers don’t take that guarantee for granted anymore,” says Baird, managing partner for research and advisory firm RSR Research. “Increasingly, consumers are beginning their shopping trip in front of a computer at home before venturing out to the store-if they don’t just decide to buy it online. And with gas prices on the rise, that trend will only continue.”
Comparison shopping is no longer just a smart practice for consumers, it’s a common one, Baird says. And today more than ever there are tools and web sites to help consumers in their endeavor to find the best products at the best prices.
Spots like TheFind.com and NextTag.com focus solely on helping consumers compare items and then link through to e-commerce sites where buyers purchase the goods. But increasingly e-retailers are adding comparison features to their sites as a service. Virtual marketplace Buy.com, which recently re-launched its site, adding product review videos, a forum and even its own half-hour streaming TV show, also chose to add a comparison price chart showing where consumers can get the best deal-even if it is at a competing retailer.
“As more information becomes available online, comparison shopping becomes more important,” Baird says. “By aggregating shopping-specific information into one place, it makes it easier for consumers to find relevant information about the products they’re looking to buy.”
Indeed, the web is where most consumers turn to study up on potential purchases-whether or not they buy online. 81% of respondents to a recent survey of nearly 2,000 online consumers by comparison shopping engine PriceGrabber.com said they use the Internet to do research before purchasing furniture and appliances, and 53% cited the web as their No 1. source for researching those purchases.
As more consumers shop around before shelling out online, e-retailers and comparison shopping sites are doing more to show how different products from different retailers match up. They’re finding new ways to serve up complete, quick and concise comparisons, Baird says.
For example, instead of returning hundreds of product reviews, comparison sites are summarizing the information themselves to make it easier for consumers to get a sense for the general take on a product across different categories, Baird says. Consumers then have the option to drill down if they wish.
Slow to embrace
Another development is the slow embrace of comparison shopping by retailers. While pioneers such as Buy.com are offering product data and prices from the competition, the majority are just beginning to warm to the whole idea, Baird says.
“When comparison sites first cropped up, many retailers blocked the crawlers and even today they put in little tricks to make it difficult to get the price,” she says. “Since then, a lot of retailers have embraced these sites because they do drive traffic.”
But, she adds, there’s still room for improvement. Too many comparison engines show only the price and not the value-add around a product purchase with a particular retailer, such as free shipping or a lenient and easy return policy
“Consumers don’t always go for just the lowest price,” Baird says. “If comparison shopping sites make it easier for retailers to show off the non-price differentiators that they can provide around a product purchase, it will build a more valuable experience for everyone-retailers and consumers alike.”