The Multichannel Handbook: A Retailer’s Guide to Growing Your Business, Pt. 6.1: Comparison Shopping Engines

This is a continuation of the Multichannel Handbook series…

In this installment of the Multichannel Handbook, we take a look at the world of Comparison Shopping Engines, or CSEs. Comparison Shopping Engines allow consumers to compare the price of products from multiple merchants, all in one place. They offer the consumer value by providing them with a quick price comparison, saving the shopper the time and energy it would take to look for “That Product” on multiple web sites or in multiple stores. No more days spent driving back and forth in the minivan with Mom and Dad, folks!

Retailers: Why Use Comparison Shopping Engines?

For retailers, Comparison Shopping Engines offer another sales channel which allows you to reach consumers at exactly the right time: precisely when they are ready to make a purchase. By providing your catalog of products to CSEs, you can get your products in front of shoppers as they are looking for the best deal. There are dozens of Comparison Shopping Engines out there, but the some of the more notable CSEs include ShopZilla, Shopping.com, NexTag, PriceGrabber, and TheFind. And although the CSE share of overall e-commerce may be small, CSEs offer another way to add incremental revenue for retailers, and that incremental revenue helps profits flow to the bottom line.

How are CSEs Priced?

Comparison Shopping Engines normally offer merchants the opportunity to bid on a cost per click (CPC) basis; the retailer provides their inventory information to the CSE, and then bids on how much they are willing to pay that CSE for each click back to their website. The CPC that each retailer encounters will vary based on the products being sold, but industry-wide, average costs per click typically range from $0.35 to $0.60; big-ticket product CPCs can go higher, of course.

Although the CPC model is the most common, other models also exist, including flat-fees for listing products, and cost per action (CPA); CPA refers to payment to the CSE when a shopper performs a specific action (buys a product, asks to be added to an email marketing list, etc.).

The Data Feed

In order to get products listed with a CSE, retailers need to submit a data feed to that CSE with certain product information in it; data feeds are typically submitted via a spreadsheet or .xml file. Product information that is submitted includes a product name/title, description, price, quantity in inventory, and the product URL (the link to the retailer’s web site where the shopper can purchase the product).

Additionally, most CSEs require a standardized product code, such as a UPC, MPN, EAN, ISBN, etc.; this is used to ensure that the same products are being compared with each other as consumers are shopping.

Finally, each CSE will have its own specific data feed requirements. This is another example of why good data management is so important; by having good, clean data at the ready, retailers can quickly set up new data feeds for each new CSE they wish to add to their CSE sales channel.

What to Watch For

Because Comparison Shopping Engines are typically driven on a cost per click basis, retailers must pay close attention to how much they are spending on their CSE sales channel. It’s important to monitor overall CSE spend as compared to CSE-driven revenues, of course.

But it’s just as important to monitor profitability at the product level, especially for lower-priced items and/or tight-margin products. Most retailers will find that, after starting with their full catalog of products being listed on a CSE, over time, that list of products will be culled so that the products which remain are making a positive contribution to the bottom line.

In our next installment, we will take a look at four important strategies to use when selling through Comparison Shopping Engines.