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Comparison Shopping Engines Alive & Well, But the Approach is Failing Marketers

  |  December 19, 2013   |  Comments

Automation can enable retailers to deliver a new catalog of listings, representing every product that will work on each CSE, in as real-time as the CSEs will allow.

shutterstock-104166956Earlier this year, I sat in on a webinar that asked attendees: "Are comparison shopping engines (CSEs) dead?" The presenters' conclusion was that no, they aren't, but due to changes made by Google and Amazon, they have evolved.

Of course, the thing about evolution is that whatever came before does eventually die off (how many Homo Erecti do you know?), so the conversation about the death of CSEs continued ever louder in 2013.

Revenue is down! Spend is up! As we march on toward 2014, I wanted to take a moment to clarify something: CSEs aren't dead. In fact, they continue to capture tens of millions of consumers every month -- consumers who have above-average conversion rates, as they are typically further along in the purchase funnel. No, CSE's are thriving... it's online retail's approach to CSEs that is failing.

Consumers Still Want a Bargain

CSEs have the same appeal as travel sites like Kayak and Vayama: they allow consumers to compare prices for identical or at least extremely similar products and services in a short amount of time. The combination of budgeting time and budgeting funds will not lose its appeal, ever.

In 2012, we saw a 56 percent boost in CSE traffic, corresponding to as much as 20 percent of retailers' web traffic. So why did 2013 become the year that the conversation turned to their death?

Well, if the holiday figures for 2013 can be extrapolated to represent the year as a whole, it's at least partly this: there are more consumers, buying more inventory, which needs to be replenished by vendors, and that will be researched and compared by shoppers. The old-school approach to CSE management simply can't keep up with the combination of the data and the action necessary to make daily updates to CSE listings.

Automating to Save CSEs

Traditionally, a person (or more likely, a team of people) within an ecommerce organization is dedicated to doing nothing more than manually updating listings for various CSEs. Whether or not they have a technology platform in between them and the CSE doesn't change the necessity for people to power the action.

Each item selection for each CSE needs to be updated based on the product's performance, inventory levels, and price competitiveness in the market -- and then updated again, the very next day. No wonder companies were lamenting poor returns on this platform! They were investing time, manpower, and money into manual updates that consumed an increasing amount of time and therefore showed declining results. That decline is a function of the approach, not the opportunity.

But here's the thing: CSEs can literally be one of the cheapest and easiest parts of an ecommerce marketing arsenal.

Automation can enable retailers to deliver a new catalog of listings, representing every product that will work on each CSE, in as real-time as the CSEs will allow. Instead of a salaried team making these changes by hand -- and instead of having people sitting behind technology platforms and building out business rules -- retailers can have a machine doing it far more efficiently and with outstanding results.

The staff that was hired for their abilities and skills can go on to use these same abilities and skills to help the company grow in other areas, rather than becoming resentful (and expensive) button-pushers.

There is still much profit to be made in CSEs. Those tens of millions of consumers I mentioned above can't be disregarded. Even if a company notices that CSE traffic is flat or even on a slight decline, they can't ignore the opportunity.

What they can and should do is automate this particular marketing channel. I'm confident that if they do, they'll see why there is still opportunity for marketers in CSEs.

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ABOUT THE AUTHOR

Andre Golsorkhi

Andre Golsorkhi is CEO of Sidecar, a leader in automated e-commerce marketing, powering paid search, comparison shopping engine advertising, on-site product recommendations, and email re-targeting for retailers ranging from $5M to $3B in annual online revenue, including Top 25 retailers in the US.

Prior to Sidecar, Andre was the CEO and Founder of Snipi, Inc. a patented system for people to save their interests while browsing anywhere online. Snipi was featured on the front page of the Wall Street Journal and established partnerships with the world's leading retail and entertainment brands.

 

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