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December 23, 2008 |
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| Online Marketing Channels Commentary |
The State of E-Commerce and M-Commerce Shopping Destination Sites Today
by Chip Arndt
 Miami, FL (December 23, 2008) – Two years ago we all referred to online shopping destination sites simply as “Comparison Shopping Engines” (CSEs). A CSE was an online mall on the Internet where consumers could find products, compare prices and ultimately buy these products online – direct from the online merchant. Examples of these CSEs include: Become, CNet, Google Product Search, mySimon, NexTag, PriceGrabber, Pronto, Shopzilla, Smarter, theFind, Yahoo! Shopping…you get the point. CSEs were introduced as different business models from Amazon and eBay! but served the similar purpose of connecting consumers to online merchants.
Last year I started to refer to CSEs as “Shopping Destination Sites” because I did not think that all of these online malls were just places to “compare” prices on products. In fact, there were many niche shopping destination sites, which did not have an overwhelming comparison shopping experience of thousands of vendors’ products and rather marketed the ease of finding quality products and companies that many consumers might never have heard of before. Examples of these alternative “Shopping Destination Sites” include: FindGifts, Gifts, Glimpse, GolfPricer, GourmetFoodMall, HealthPricer , Like, MachineTools, and many others.
Today I return to referring to “Shopping Comparison Sites” as CSEs. But, instead of CSE standing for “Comparison Shopping Engine” I now refer to CSEs as “Consumer Shopping Engines.” I do this, not to subvert your ad word buys on search engines, but rather to be more precise and inclusive of all online Web destinations that allow a consumer to find products, compare prices, and shop easily.
So a CSE, from here on out, is referred to as a “Consumer Shopping Engine” – which is a Web site that allows anyone to shop on the Internet either directly from your computer (ecommerce) or mobile device, (mcommerce).
Okay, now that we have definitions out of the way, what can we expect from CSEs into 2009? The below analysis may surprise you…or maybe not.
The Way It Was…A Little History
1992-1998: Years ago… in a place far, far away…online comparison shopping was born. In the beginning, there were online shopping malls as Amazon, BizRate (now part of Shopzilla), CNET, DealTime (now Shopping.com) eBay!, mySimon, PriceGrabber, Shop.com, and Shopzilla. Each with their own business model of how to connect consumers with online merchants.
This was the dawn of a new way to shop. Some say online shopping was little more than a more sophisticated “Yellow Pages”. However, CSEs afforded the consumer a method to quickly compare prices and products from various vendors without leaving their home or office. During these years, it was difficult to find well known brick and mortar stores listing their products with CSEs, as they were slow to adopt online shopping; the small to mid-sized online merchant flourished. Most of these CSEs worked on a pay-per-click (“PPC”) advertising model, whereby online merchants did not pay to be listed on CSEs but instead paid for every click on a product, whether it led to a sale or not, which was then redirected back to their home Webstore. Some experts refer to this as “pay-for-lead” advertising.
As technology improved, this new "breed" of shopping Web portals changed both the business model of how consumers shopped and put pressure on CSEs to upgrade the features and functionality offered to online shoppers and online merchants to ensure online shopping was easy, safe, and fun to use. Unlike search engines, CSEs did not merely "aggregate" data-feeds provided from the online retailers, but rather retrieved the data directly from each retailer site. This evolution allowed for a more comprehensive list of online retailers and the ability for the online merchant to update product information data in real-time.
1999-2003: Very quickly, online shopping went from being a novelty, niche Internet business idea to being a robust and profitable business model for CSEs, investors, and online merchants using CSEs and, because of this, many new CSEs emerged.
Improved technology shopping interfaces, more sophisticated Website, search navigation functionalities, safer payment gateways, and faster Internet connections collectively help make the online shopping experience more efficient, unique, and fun. These innovations empowered consumers to search for products more frequently, as download times to find products and execute subsequent online purchases was relatively easy and quick.
To complement these improvements, CSEs developed technologies to aggregate and list retailers’ product catalog data more efficiently. This process ensured that online merchants’ products, listed on a CSE, mirrored exactly what was marketed on their own Website in virtual real time. Consumers could then be satisfied that the products and prices they found on a CSE accurately represented what they might find on the actual merchant’s Website.
Globally, similar CSEs launched, leading to over 50 CSEs marketing products to consumers by 2002 in the USA and Europe. This period continued to see consistent growth in new CSEs and improvements to existing CSEs, most of which still only offered a PPC business model to the online merchant. Examples of CSEs that emerged were:
USA based: Froogle (now Google Product Search), MSN Shopping, NextTag, Smarter, and Yahoo! Shopping.
Europe based: Dooyou Group, Froogle Europe (now Google Product Search), Kelkoo, MSN Europe, LeGuide, PriceGrabber Europe , Shopzilla Europe, and Yahoo! Shopping Europe.
2004-2008: Boom…During these years the marketplace witnessed an explosion in new CSEs across the globe, the emergence of new payment and advertising models using CSEs, the growth of mobile commerce (“mcommerce”) and the proliferation of merger, acquisition, and/or buyout activity within ecommerce and mcommerce.
Online and mobile shopping expanded exponentially during this five year period. Traditional business models of the PPC and the commission based sales model, perfected by Amazon, now compete with new ways for online merchants to reach consumers and new payment methods for online merchants to work with CSEs. As of 4th Q 2008, there are over 300 CSEs, large and small, that use traditional and new payment methods to connect consumers including: pay-per-click, commissions, pay-for-action, referral fees, product data feed licensing, gift cards, and coupons, to name just a few. [Click Here] for a list of several new CSEs.
The most notable change to online shopping during this period was the advent of product reviews, blogs, social networking sites, and targeted niche CSEs as viable places for consumers to find, compare, and buy products. While traditional large CSEs are still viable and successful businesses, the landscape of online shopping has changed forever. No longer are there just a few trusted online CSEs to shop for products online but rather hundreds and hundreds of large, medium, and small CSEs, and other online destinations, to shop both from your computer and hand-held wireless device.
A whole other newsletter could be devoted to just this period and the explosion of online and mobile shopping CSEs, applications, and business models. In the absence of that newsletter, here are the main points to remember:
- Ecommerce is here to stay
- Ecommerce is growing
- The methods and applications to make online shopping more efficient and enjoyable are morphing every day, and
- Ecommerce and Mcommerce are the preferred methods of younger generations to find, compare, and purchase products
How Online Merchants Can Benefit By Using CSEs to Increase Sales
Any online merchant should market their product catalog on CSEs for one simple reason, namely, CSE marketing is one of the most efficient ways to reach millions of potential customers quickly and cost effectively.
Whether an online merchant works with free CSEs, such as Google Product Search, theFind.com, or Live Cash Back from Microsoft, and/or CSEs that only charge a commission on sales, and/or CSEs that work on a PPC business model, and/or CSEs that work on a Pay-Per-Action (which is similar to a commission based model), and/or CSEs with a fixed monthly fee, CSE marketing should be part of the marketing strategy of all online merchants.
The four main reasons most online merchants say they do not work with CSEs are:
- Limited time and money to dedicate to CSE marketing
- A lack of the critical data necessary to make marketing efficiency decisions
- A lack of understanding of how to produce a proper product data file to submit to CSEs, and
- A lack of understanding of the CSE landscape and the best CSEs to use to increase sales.
MerchantAdvantage was founded to help online merchants leverage marketing channels, such as CSEs, to grow sales, build brand awareness, and increase return on ad spend (“ROAS”). MerchantAdvantage solves these above concerns by providing online merchants a plethora of information about CSEs, a myriad of choices of how to work with CSEs for very little money, and robust analytic tools to gauge the success of CSE marketing. In addition, considering that there are three FREE CSEs that an online merchant can start to work with immediately – yes, that means that these CSEs never charge an online merchant for a lead or sale - we see no reason why an online merchant would not use these CSEs, at a minimum.
Many MerchantAdvantage clients only use free CSEs. These clients realize value in three main ways:
- Any sale or lead that comes to them costs nothing
- Any lead or sale that comes to them is a lead forever for future direct marketing efforts, and
- The online merchant understands how to work with and leverage CSEs effectively
Most of the time, soon after an online merchant learns how to use free CSEs effectively and analyze these marketing efforts intelligently; they then introduce other CSEs into their marketing efforts and realize that CSE marketing is not only important to building sales but is also very cost-effective.
Once an online merchant gets past the “anxiety” of learning a new marketing method and realizes the vast potential to increase sales by using CSEs in a variety of ways, it is important that an online merchant monitor and stay on top of three main issues for effective CSE marketing. These include:
- Ensuring that they send an updated and optimized product catalog data feed to the CSE or mobile marketing channel
- Ensuring that they have the resources to monitor and update CSE marketing strategies, and
- Ensuring that the ROAS justifies the time, effort, and cost to working with CSEs.
Some online merchants have in-house resources to solve these issues, other online merchants simply out source to a third party to solve these issues. Another alternative is to use intuitive, Web-based tools to solve these issues and ensure that the online merchant remains in control of their data and profits.
MerchantAdvantage is the pioneer in ecommerce and mcommerce tools providing cost-effective, Web-based solutions and does NOT charge revenue share, listing fees, commissions or any other fees that might nip into your margins.
The right solution is up to the online merchant but the key take away is:
All online merchants should implement a CSE marketing strategy, be it limited or robust, to their existing marketing strategy. The proper implementation of a CSE marketing strategy leads to exposure, sales, leads, and branding opportunities at a price, in terms of actual cost and time, which no other marketing strategy can approach. Period!
So now that I have your attention, what follows is an overview of how any online merchant can leverage CSEs in 2009.
The CSE Landscape for 2009 and Where to Start
CSE marketing can be overwhelming or it can be easy. Let us, together, try the easy route.
Going into 2009, there are hundreds of viable CSEs and other marketing channels that act similar to CSEs to market products. Last month, MerchantAdvantage had a free webinar with buySAFE that outlined this CSE landscape and how to implement a cogent and cost-effective CSE marketing strategy. Anyone reading this newsletter can [Click Here] to download the free webinar to learn more.
To ready yourself for 2009, it is important to first understand the simple value-add of CSE marketing. Diagram 1 shows that CSE marketing is straightforward process where online merchants can connect to millions of consumers via a wide array of CSEs, which then connect the consumer back to the online merchant’s Web Storefront.
After understanding the value of CSEs, online merchants often are confused about:
- How many CSEs are available to them to send their product catalog data
- The costs associated with working with one CSE over another
- Some are freeb. Some charge commissions
- Some charge a flat fee
- Some charge a Pay-Per-Click
- Some charge Pay-Per-Action (similar to commissions)
- The consumer reach of one CSE over the other
- The “best” CSEs to market and represent their product catalog data
- Analyzing the effectiveness of CSEs, and
- The in-house technical skills and resources required to work with CSEs
To begin to answer these questions, Diagram 2 outlines important distinctions between one CSE over the other and the best possible place to begin CSE marketing.
There is no one CSE that is perfect for your marketing strategies. Some CSEs start to lead to sales right away, other CSEs take some time to lead to sales, and others may not lead to sales at all. The only way to identify the best CSEs that work for YOUR product catalog is to test, test, and test again. The good news is that there are many CSEs that might work for you and the bad news is you might have to test a few CSEs before finding the perfect one. The huge upside, however, is that when you find the right CSEs to work with an online merchant’s sales, leads, and brand benefit.
If you are new to CSE marketing, MerchantAdvantage recommends starting off with listing your product catalog to three free sites that also have a lot of consumer traffic. These include: Google Product Search, theFind.com, and Live Search from MSN. No costs are associated from any lead or sale an online merchant gets from these free CSEs. The risk to work with these CSEs is zero with the upside of some sales and the proliferation of your brand, which is always good for SEO.
After understanding where to start, for nothing, merchants then ask the obvious questions:
- What other CSEs market my products the best?
- What are the costs associated with all of these CSEs? and
- How easily can I work with numerous CSEs?
Question 1: “What other CSEs market my products the best?” is answered by breaking down the CSE landscape in what we call “marketing buckets” and addressing each “marketing bucket” one phase at a time.
There are 5 phases to consider when using CSEs. We recommend looking at each phase as a marketing strategy unto itself. And, we remind online merchants that they can start with any phase they prefer that answers best to their marketing needs and then move on to a different phase once they are comfortable.
Diagram 3 outlines Phase 1: Well known CSEs and marketplaces and Free CSEs.
Diagram 4 outlines Phase 2: Niche CSEs that market select products to targeted consumers.
Diagram 5 outlines Phase 3: “Affiliate networks” available to market an online merchant’s product catalog.
Diagram 6 outlines Phase 4: “Specialty Marketing Sites” available to market an online merchant’s product catalog.
Diagram 7 outlines the final Phase 5: Mobile commerce CSEs available to market an online merchant’s product catalog.
Question 2: "What are the costs associated with all of these CSEs?"
Each CSE has their own way to work with them and offer varying payment models. Some CSEs charge a commission, such as Amazon, some are PPC, as Like, PriceGrabber, Pronto, and Shopzilla, some charge a flat-fee such as myCoupons and SortPrice, some charge Pay-Per-Action, which is a variance to the commissions, and others are FREE! MerchantAdvantage makes it easy to find out the payment models of each CSE through a simple back–office interface or you can email the CSE and ask them directly.
And, regardless of the payment structure a CSE utilizes an online merchant can easily analyze their ROAS on a CSE with a proper analytic tool that monitors their CSE marketing campaigns across all CSEs. MerchantAdvantage uses a proprietary “Chanalytics” tool for its clients that measures the return on ad spend of CSE marketing campaigns immediately.
Question 3: "How easily can I work with numerous CSEs?"
It can be confusing to work with some CSEs and very easy to work with others. Working with one CSE is fairly easy to manage, but working with several CSEs and updating product catalog feeds on a daily basis on your own can be a nightmare. If you have the time and in-house technology smarts to dedicate to CSE marketing strategies, you can do it yourself. MerchantAdvantage exists to empower merchants to work with 2, 5, 50, or 100+ CSEs easily and analyze how these CSE strategies are working to lead to higher ROAS and sales.
Where do we go from here into 2009?
There is no question that CSE marketing is valuable, growing, and here to stay. A new tech savvy generation is turning to online shopping, via their computers and mobile devices, to find, compare and buy products every day around the world. It is now up to the online merchant to leverage these CSE marketing channels and implement cost-effective strategies to reach these consumers.
So for 2009:
- Start feeding your entire product catalog to the three aforementioned FREE CSEs
- Include CSE marketing in your overall marketing plan and budgets for 2009, and
- Work with a company that provides easy to use, Web-based tools to leverage the CSE landscape cost-effectively
There are very few marketing strategies that cost so little to implement with such a huge upside.
What are you waiting for? Just do it.
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| Advice, Tips & Tricks |
Technical Support: A Two Way Street
by B. Thomas Romeo
 Miami, FL (December 23, 2008)— They say that "information is power." In regards to the online retail industry this is defined by your access to resources that are often a hybrid of marketing and technology. As we all know there is good and bad advice out there from a variety of sources. However the more resources you have access to, the more refined your marketing plan can be. In my experience of technical support, which happens to go across several industries and various technologies, I find that online merchants could be taking advantage of a lot more of the information available to them. Also, the same merchants could learn a few key methods to gather those resources.
The first thing I always advise merchants to do while working through their marketing plan process is to always keep a list of questions. This is because you are always thinking about technological options in so far as the various applications and automatic systems you may or may not utilize to develop that plan. Additionally, you are always encountering new information. That is, keep track of questions or points you would like clarified. This list should be organic, it can be on paper, but it should always reflect a clear view of the "what's next" or "what I don't really understand that I would like to understand better" of questions. Technical support staff will always appreciate a well defined set of questions that are more specific rather than generic. This is because, hopefully, along the way, they are "teaching a man to fish."
Additionally in the online retail industry, we should know our resources. Try to think about the entities you communicate with on a given day or during the month and recognize the informational value that they have. Which marketing channels or campaigns are you working with this month? Whose software or what company are you working with to help deliver your feeds? Who represents them that you have access to? It's more than error correction and resolving issues for you - it's about learning how to grow your business and get to the critical marketing mass we often speak of.
Once you have reached a quantifiable list of questions, reach out to your technical support people. Send them the list in an email or touch base with them on a regularly scheduled phone call. Don't wait until the same list is overwhelming. Remember that there is only so much information we can assimilate or record at a time. Use technical support in a reasonable manner, remember the variety of resources that augment the companies you depend upon. FAQs, KnowledgeBases, support@ emails, webinars, et cetera, are all great resources. Remember that your resources have resources themselves. It always fascinates merchants that I'll pick up the phone and call a channel directly to troubleshoot an error or ask a question to which I don't have the answer. Our webinars at MerchantAdvantage invite representatives from the various channels we work with to be panelists and discuss everything a merchant needs to know about their offering, their signup process and their target markets.
Finally, always remember that tech support is offered for a reason; companies want their clients to continue to use their services and products. The more educated their consumer is, the more likely that consumer will see the value in these products and services. And who knows more about this then you as a merchant yourself? Putting yourself in the theoretical shoes of your own clients let's you not only learn how to "fish" for information and resources, it allows you to be to "teach" your own clients to "fish" better themselves. A little effort is often rewarded with insight and hopefully these methods will help you reach the potential point of being informed. Intelligence is often defined by access to resources, especially in regards to technology, no one person can "know it all" but smart people have good resources. Work with your support resources rather then challenging them - "Help them Help you". |
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| Webinars & White Papers |
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10 Crucial Changes to Energize Your Holiday Marketing
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Webinar:
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Webinar:
How to Afford Comparison Shopping Engines
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White Paper:
2 Steps to Increase Return on CSE Ad Spend
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| Industry News |
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Retailers’ Online Gains |
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ShoeParlor.com
 "With the use of the Chanalytics reporting tool, we have been able to increase our ROI significantly since we began using Channel Management. The ability to obtain up-to-the-minute information for each product within each channel feed enables us to intelligently make decisions that immediately impact our bottom line.
We also love the fact that our profits are not eaten up by transaction fees – we know every month that we can count on one low monthly flat rate that never fluctuates - even when our sales increase".
Jason, ShoeParlor.com
Get Your Channel Management Fee Waived Plus Receive a Complimentary Companion Airline Ticket!
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If chosen, your company will be exclusively showcased in an edition of our monthly newsletter, eTail dTail.
Best of all, your monthly MerchantAdvantage fee will be waived in the month you are selected and you will receive a complimentary Companion Airline Ticket. Submit your Channel Management success story today to stories@merchantadvantage.com. We look forward to hearing from you!
(Note: MerchantAdvantage reserves the right to use any or all of your story, whether or not your article is selected as the winning entry.) |
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About MerchantAdvantage
MerchantAdvantage (www.MerchantAdvantage.com) is an ecommerce software solutions company committed to championing and helping the small to midsized online merchant address complicated online and mobile commerce issues. MerchantAdvantage takes a systematic, controlled and proactive approach to online product marketing by providing long-term, cost effective, Web-based software tools that enable an online business to grow by reaching the widest audience possible via online, broadband, and wireless devices.
MerchantAdvantage's applications are designed to connect the online retailer to their marketplace partners in a seamless motion of communication, allowing online merchants to take control of their e-Commerce and m-Commerce channels, marketing strategies and IT solutions. MerchantAdvantage currently markets over $3 billion worth of product value daily, representing over 900 online storefronts and is changing the macrocosm of ecommerce by staying ahead of the curve in providing business solutions to the growing online retail marketplace. They are here because your commerce future is online and wireless. For more information, please visit MerchantAdvantage.com, e-mail us at sales@MerchantAdvantage.com or call us at 1.800.550.9466.
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