Comparison Shopping, Our Space

2005 was an explosive year for internet comparison shopping, what with booming internet traffic and high profile purchases. Ebay purchased Shopping.com for $620 million, while Shopzilla was acquired by E.W. Scripps for $525 million. Consumers are increasingly using comparison shopping engines like Smarter.com to research and purchase products online, and retailers are rapidly finding that comparison shopping represents one of the most cost-effective advertising internet channels to sell their products.

Here are some of the major findings related to comparison shopping:

1. In 2003, some 20% of online consumers using comparison shopping. (Source: ForresterResearch).
2. During 2004, Yahoo!, AOL and Microsoft all launched comparison shopping which suggests that consumer adoption of comparison shopping is growing substantially.
3. Consumers are increasingly doing research online, even if they buy offline. Best Buy reports that over 2/3rds of in-store shoppers have done research online. (Source: BestBuy Outlet Presentation, ChannelAdvisor Summit, 2004).
4. Consumers are buying computer and consumer electronic products online, In 2004, 43% of all computer hardware and 12% of all consumer electronics sold in the U.S. were sold online.
5. According to a 2004 study by BizRate and the Kelsey Group, 37% of consumers in the U.S. are familiar with shopping search sites and over 75% of respondents stated that comparing prices and/or merchants was their favorite aspect of shopping online.
6. A 2005 Jupiter research study found that 61% of online consumers viewed comparison shopping sites as the most efficient way of searching and buying products, a rise of 15% in just one year!
7. Nearly 60% of online shoppers start at comparison shopping sites rather than merchant sites, an increase of 13% over three years. This suggests rising consumer confidence in the value and savings provided by comparison shopping engines. (Source: BizRate/Shopzilla, 2005 research)
8. Consumer confidence has also translated to a whopping 52% increase in traffic to comparison shopping sites over the past year. (comScore 2005)
9. Consumers are also spending more online every year. A 2005 Goldman Sachs, Nielsen/NetRatings, and Harris Interactive study showed that online consumers spent $30.1 billion during the final three months of 2005. When compared to the same period in 2004 this translates to an increase of 30%!
10. Price-comparison sites are the second most-utilized online technology today, used by 40% of respondents. Comparison-shopping was sandwiched between instant messaging and social networking as the first and third most-utilized Web applications, respectively. (BrandWeek online survey of web advertising dislikes - 2006)

ComScore has reported that retailers have found 5x the revenue per lead from comparison shopping than from leading portals and search engines.

CPC's for comparison shopping are typically lower than paid search, and yet Smarter.com has found conversion rates to be 2x to 7x the conversion rates from paid search!!!