Comparison Sites Ease Bargain Hunts
Bunions throbbing after a weekend of mall hopping, millions of holiday shoppers will boot up their computers today and begin scouring the Internet for bargains.
But with the proliferation of shopping sites, finding the perfect gift online can be just as frustrating as navigating the galleria.
Shopzilla.com and PriceGrabber.com aim to help. They are among more than a dozen comparison shopping sites that make a buck by shepherding shoppers to deals offered by online and traditional retailers.
Such sites can help save anywhere from a few bucks on a DVD to thousands of dollars on a liquid crystal display television.â€We still love to get a bargain, and finding the lowest price is such a small victory,†said Anne Marie Luthro, a vice president at Envirosell Inc., a market research firm based in New York. “You get to say I got a [iPod] nano, but I only paid $199 for mine as opposed to the guy who paid $229.â€
Experts predict more shoppers than ever will require help navigating the Internet in the weeks before Christmas. Online holiday sales are expected to increase 25% over last year to $18 billion, according to Forrester Research Inc.
Today is expected to be one of the busiest online shopping days, as workers return to the office and take advantage of their employers’ high-speed Internet connections.
Atlas, a digital marketing firm, predicts Dec. 12 -- a Monday -- will be the single biggest day of the 2005 online holiday shopping season.
A survey by Jupiter Research found comparison-shopping sites are increasingly influencing shoppers, with the percentage of online consumers who view the sites as the most efficient way to find products and help users decide on purchases rising by more than a third this year to 61%.
“We also saw a 36% increase in consumers this year who said price is the most important factor when I’m figuring out what to buy,†said Patti Freeman Evans, a retail analyst at Jupiter Research. “Price has always been important, but that’s a huge increase.â€
Farhad Mohit, co-founder and chief product officer at Los Angeles-based Shopzilla Inc., said his company aimed to save customers time and money by sifting through thousands of retail websites.
“If you can’t find what you’re looking for from 64,000 stores and 30 million items [on Shopzilla], then you’re certainly not going to find it at the mall,†Mohit said.
Shopzilla’s search engine, for example, turns up 50 retailers selling Sharp Electronics Corp.’s 37-inch Aquos liquid crystal display television, with prices of $1,660 to $5,000. Such sites frequently offer to calculate tax and shipping based on a customer’s ZIP code. In many cases, they also provide customer reviews.
“They are offering an additional level of selection and service that you can’t get through a basic search†on Yahoo Inc.’s or Google Inc.’s websites, said Safa Rashtchy, an analyst at Piper Jaffray & Co.
The word “stroller†turns up more than 3.5 million results on Google, but nets 1,100 references on Shopping.com, which can easily be sorted by price, brand and type.
“It’s the paradox of choice,†said Lorrie Norrington, chief executive of Shopping.com, which boasts 35 million products spread over 325 diverse categories that include such items as flowers and fax machines. “You want a lot to choose from. At the same time you want to be able to quickly cut through the clutter.â€
Another challenge facing comparison sites is figuring out ways to infuse online shopping with some of the excitement that draws many consumers to the mall.
Yahoo’s shopping site, shopping.yahoo.com, recently launched “Shoposphere.†The feature enables users to post pick lists featuring some of the 90 million products contained in Yahoo’s database based on themes such as fish tank ornaments and poker paraphernalia.
“Typically, e-commerce has been a fairly antisocial activity -- antisocial not in the pejorative sense, just solitary,†said Rob Solomon, vice president of Yahoo Shopping Group. “With Shoposphere you can interact with people who have picked products.â€
NexTag.com’s website offers a toolbar to make it easier for online shoppers’ search, be it for a coffee maker, vacation or a mortgage lender. “The biggest challenge in our business is driving traffic to our site,†said Stephen Imbler, NexTag Inc.’s chief financial officer.
Comparison sites are also expanding their category coverage to attract a wider audience. The grocery saver feature on Cairo.com’s website allows shoppers to compare advertised prices of leading grocery stores in their neighborhoods. In Glendale, for example, ham dinners recently ranged from $39.99 at Albertsons to $69.99 for a gourmet version at Ralphs.
Although Cairo generates revenue via ads displayed on its site, most shopping comparison sites turn a profit by striking deals with merchants who pay so-called click through fees based on referrals they receive from the sites.
Yahoo’s site lists items for sale by merchants who pay the fees as well as those who don’t. Click fees vary by category, according to Solomon, with Yahoo receiving about 20 cents for each book, music and video referral.
Shopzilla, which also includes a combination of paying and nonpaying merchants, lists results based on a formula that factors in whether the firm receives referral fees from a merchant in addition to a product’s price, availability, a merchant’s rating and brand strength.
Last month, Shopzilla topped Nielsen/NetRatings’ monthly list of online shopping directories and guides by attracting 17.5 million visitors, followed by Shopping.com, Yahoo Shopping, NexTag and Google’s Froogle. Because the firms rely on separate search engines, savvy shoppers may want to visit several sites since results vary.
Froogle.com’s site comes up with 18 listings for “Elmo’s World -- Dancing, Music, Books†DVD, ranging from $7.11 to $12.35. PriceGrabber.com’s website showed 11 merchants selling the same DVD, with prices from $6.20 to $12.99.
Although Froogle may net more results, Envirosell’s Luthro said people at her office liked PriceGrabber best. Rashtchy gave PriceGrabber high marks for its “pure and simple†approach and name recognition among consumers.
Shoppers can receive e-mails from PriceGrabber when a product they want hits a certain price, eliminating the need to hunt for bargains.
“It’s not that we’re out to take the fun out of shopping,†said Kamran Pourzanjani, chief executive of PriceGrabber. “If anything we’re there to help educated shoppers and make sure there’s no buyer’s remorse whether they buy online or offline.â€
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How competitors stack up
A number of shopping comparison sites are expected to help online shoppers this year. Results can vary widely, even from day to day on the same site. Here’s how four services stacked up on three items last week.
Video game
“Kameo: Elements of Power†(Xbox 360)
PriceGrabber.com
Matches: 8
Price: $43.28 to $49.99
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Video game
“Kameo: Elements of Power†(Xbox 360)
Shopzilla.com
Matches: 14
Price: $44.95 to $67.95
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Video game
“Kameo: Elements of Power†(Xbox 360)
Shopping.com
Matches: 9
Price: $50 to $51
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Video game
“Kameo: Elements of Power†(Xbox 360)
NexTag.com
Matches: 4
Price: $44.96 to $49.95
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Espresso machine
Francis Francis X1
PriceGrabber.com
Matches: 15
Price: $649.99 to $799.95
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Espresso machine
Francis Francis X1
Shopzilla.com
Matches: 13
Price: $649.99 to $849.99
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Espresso machine
Francis Francis X1
Shopping.com
Matches: 13
Price: $499 to $850
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Espresso machine
Francis Francis X1
NexTag.com
Matches: 10*
Price: $649.99 to $849.99
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Digital camera
Canon PowerShot G6
PriceGrabber.com
Matches: 69
Price: $457.60 to $698.50
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Digital camera
Canon PowerShot G6
PriceGrabber.com
Matches: 119
Price: $408 to $919
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Digital camera
Canon PowerShot G6
PriceGrabber.com
Matches: 44
Price: $429 to $699
---------
Digital camera
Canon PowerShot G6
PriceGrabber.com
Matches: 43
Price: $407.95 to $699.99
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*Sorted by color.
Source: Times research
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