Comparison Shopping Services (CSSs), also known as Comparison Shopping Engines (CSEs), give ecommerce merchants the opportunity to improve the visibility of their products and go head-to-head against competition.
In this article, we’ll dive into what comparison shopping services are, we’ll explain the differences and show how you can use their services for your business.
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What are price comparison services?
Comparison Shopping Services are websites that allow merchants to list their products so that shoppers can compare their prices. Unique products are often identified by a European Article Number (EAN) or other codes (i.e. UPC in the USA) which makes it possible to match different merchants for a particular product so that shoppers can compare the product information of each merchant.
Essentially, Comparison Shopping Services operate as a search engine for products and stand in between retailers and consumers. As many Comparison Shopping Services can serve shoppers millions of products, they often offer a search functionality in which shoppers can enter a query and look for specific products, categories or brands. An important aspect here is how queries are matched with both product, brand and merchant information. In addition, with possibly thousands of results the order of these results can vary from relevance to the query, number of merchants for a products, or based on price.
A common characteristic is that each unique product has a dedicated page which lists all product information of each retailers and displays all costs side by side. This lets shoppers compare pricing, shipping options, and service from multiple retailers on a single page and choose the merchant that offers the best overall value.
Why work with a price comparison service?
Consumers make comparisons among brands, categories and individual products in order to get the best value for their budget. We all know it: consumers are sensitive to prices. In more scientific terms we call this price sensitivity: the measurement of how much the price of goods and services affects customers’ willingness to buy them. Price sensitivity varies a lot. It’s influenced by the kind of goods and services you sell, the kind of customer you have, and the wider market factors, such as social and economic trends.
For merchants, price comparison shopping engines are an opportunity to put your products in front of very interested buyers. These aren’t people glancing at a virtual storefront like a window shopper at the mall. Price comparison site users typically have already made the decision to buy and are simply looking for the lowest price. With their high intent to purchase, comparison shoppers often are an ideal audience for promoting your products.
Comparison Shopping Services therefore offer you an opportunity to increase the visibility of your brand or products in the far end of the funnel. Whether you want to grow brand awareness or increase your sales, you can be there when purchase intent is high. In addition, certain CSSs also display shipping costs which finally opens the opportunity to show that even though your products are priced a bit higher, your shippings costs may be lower.
What are the costs of Comparison Shopping Services?
On most Comparison websites there are no transactions taking place. When a shopper is interested in a product they are directed to the merchant of their choice where they can buy the product. We call this an “outclick” or “click-through”. Certain CSSs are going to charge you per click-through. With pay-per-click, sellers pay a set fee or bid each time a potential customer clicks on that merchant’s link.
In a pay-per-action model, retailers will pay a percentage of the value of a sale made as a result of being listed on the CSS. Most CSSs that work with this model participate in an affiliate network to handle attribution. Budget monitoring is key with variable pricing models, so be sure to set one.
Attribution is the practice of evaluating the marketing touchpoints a consumer encounters on their path to purchase. The goal of attribution is to determine which channels and messages had the greatest impact on the decision to convert, or take the desired next step. This is especially relevant in pay-per-action models where you pay commission for a conversion.
Another common pricing model is a flat fee. The CSS offers a fixed monthly fee or several tiers of fixed fees based on a certain variable (i.e. number of products). Above all, this model is transparent and offers certainty with respect to costs. The platform should generate sufficient traffic to yield a profit that exceeds the fixed fee. It is advised to make a decision based on the average conversion value and profit margin of your shop. With these number combined you should be able to calculate a break-even point in terms of number of conversions.
Getting products listed on price comparison websites
Most CSSs require retailers to submit a product feed. In short, a product feed is a structured data file that contains all your product information. This feed must meet a predefined specification and should be updated frequently. The CSS uses scripts to parse and ingest the data from the feed, displaying the included information on results pages as appropriate.
Depending on your e-commerce software several apps may be available that make submitting product feeds to CSSs easier and in some cases, automatic. Regardless of how a feed is created, smart merchants will work to optimize descriptions and product prices to get the most sales possible.
Grow your business with price comparison sites
If you have a competitive price point and a quality product to boot, price comparison engines are an effective customer acquisition tool. Whether you compare your own products to one another or put them up against the competition, CSEs can be a great way to ease buyer hesitation and instill confidence in their purchase.