Comparison Shopping Website
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A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot, aggregator or comparison shopping engine, is a
vertical search engine A vertical search engine is distinct from a general web search engine, in that it focuses on a specific segment of online content. They are also called specialty or topical search engines. The vertical content area may be based on topicality, media ...
that shoppers use to filter and compare
product Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produ ...
s based on price, features,
reviews A review is an evaluation of a publication, product, service, or company or a critical take on current affairs in literature, politics or culture. In addition to a critical evaluation, the review's author may assign the work a rating to indic ...
and other criteria. Most comparison shopping sites aggregate product listings from many different
retailer Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
s but do not directly sell products themselves, instead earning money from
affiliate marketing Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of ...
agreements. In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
, these services made between £780m and £950m in revenue in 2005. Hence, E-commerce accounted for an 18.2 percent share of total business turnover in the United Kingdom in 2012. Online sales already account for 13% of the total UK economy, and its expected to increase to 15% by 2017. There is a huge contribution of comparison shopping websites in the expansion of the current E-commerce industry.


History

The first widely recognized comparison-shopping agent was BargainFinder, developed by
Andersen Consulting Accenture plc is an Irish-American professional services company based in Dublin, specializing in information technology (IT) services and consulting. A ''Fortune'' Global 500 company, it reported revenues of $61.6 billion in 2022. Accentur ...
(now Accenture). The team, led by researcher Bruce Krulwich, created BargainFinder in 1995 as an experiment and published it on-line without advance warning to the e-commerce sites being compared. The first commercial shopping agent, called Jango, was produced by
Netbot Netbot was the first commercial Internet price comparison service. Founded by University of Washington Computer Science professors Oren Etzioni and Daniel S. Weld the company was funded by ARCH Venture Partners, Alta Partners and the Madrona ...
, a Seattle startup company founded by
University of Washington The University of Washington (UW, simply Washington, or informally U-Dub) is a public research university in Seattle, Washington. Founded in 1861, Washington is one of the oldest universities on the West Coast; it was established in Seattle a ...
professors
Oren Etzioni Oren Etzioni (born 1964) is an American entrepreneur, Professor Emeritus of computer science, and founding CEO of the Allen Institute for Artificial Intelligence (AI2). On June 15, 2022, he announced that he will step down as CEO of AI2 effective ...
and Daniel S. Weld; Netbot was acquired by the
Excite Excitation, excite, exciting, or excitement may refer to: * Excitation (magnetic), provided with an electrical generator or alternator * Excite Ballpark, located in San Jose, California * Excite (web portal), web portal owned by IAC * Electron ex ...
portal in late 1997. Junglee, a Bay-area startup, also pioneered comparison shopping technology and was soon acquired by
Amazon.com Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential economi ...
. Other early comparison shopping agents included pricewatch.com and killerapp.com.
NexTag Nextag was an independent price comparison service website for products, travel, and education. It started originally as a website where buyers and sellers could negotiate prices for computers and electronics products. Since 2000, the current bus ...
another entry into comparison shopping was named Times magazine world top 50 website in 2008, only to eventually close in 2018. In 2005,
PriceGrabber PriceGrabber.com is a price-comparison shopping site and distributed content commerce service founded in 1999 by former CEOs Kamran Pourzanjani and Tamim Mourad. The company partners with merchants, retailers, and sellers to provide information o ...
was acquired by
Experian Experian is an American–Irish multinational data analytics and consumer credit reporting company. Experian collects and aggregates information on over 1 billion people and businesses including 235 million individual U.S. consumers and more t ...
for $485 million, negotiated by then-CEO and founder of the company,
Kamran Pourzanjani Kamran Pourzanjani is an entrepreneur and an early angel investor based in Los Angeles, California. He co-founded and was formerly the CEO of PriceGrabber, a comparison shopping site started in 1999 with less than $1.5 million in angel funding. In ...
, along with Tamim Mourad, in 1999. Around 2010, the price comparison websites found their way to
emerging markets An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
. Especially
South-East Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical south-eastern region of Asia, consisting of the regions that are situated south of mainland ...
has been a place for many new comparison websites. It started in 2010 with CompareXpress in
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
, and in the following years companies like Baoxian (
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
),
Jirnexu Jirnexu Sdn Bhd (Jirnexu) is a Southeast Asian financial technology startup headquartered in Kuala Lumpur, Malaysia. The company provides technology to help financial institutions manage different stages of the customer journey: marketing, acqui ...
(
Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
), and AskHanuman (
Thailand Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is bo ...
) followed. Meanwhile, in developed markets, Google was accused of promoting Froogle and its replacement, the paid-placement-only
Google Shopping Google Shopping, formerly Google Product Search, Google Products and Froogle, is a Google service created by Craig Nevill-Manning which allows users to search for products on online shopping websites and compare prices between different vendor ...
, over competitors in its search results, driving down traffic to other sites and driving some out of business. The
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
began an investigation in 2010, which concluded in July 2017 with a €2.42 billion fine against the parent company Alphabet, and an order to change its practices within 90 days.


Comparison shopping agent

In the early development stage from 1995 to 2000, comparison shopping agents included not only price comparison but also rating and review services for online vendors and products. Altogether, there were three broad categories of comparison shopping services. Later, through mergers and acquisitions, many services were consolidated.


Services

Through 1998 and 1999, various firms developed technology that searched retailers websites for prices and stored them in a central database. Users could then search for a product, and see a list of retailers and prices for that product. Advertisers did not pay to be listed but paid for every click on a price.
Streetprices StreetPrices was founded in October 1997, making it the third price comparison service A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot, aggregator or comparison sh ...
, founded in 1997, has been a very early company in this space; it invented price graphs and email alerts in 1998.


Technology

Price comparison sites can collect data directly from merchants. Retailers who want to list their products on the website then supply their own lists of products and prices, and these are matched against the original database. This is done by a mixture of
information extraction Information extraction (IE) is the task of automatically extracting structured information from unstructured and/or semi-structured machine-readable documents and other electronically represented sources. In most of the cases this activity concer ...
, fuzzy logic and human labour. Comparison sites can also collect data through a data feed file. Merchants provide information electronically in a set format. This data is then imported by the comparison website. Some third party businesses are providing consolidation of data feeds so that comparison sites do not have to import from many different merchants. Affiliate networks aggregate data feeds from many merchants and provide them to the price comparison sites. Many of the popular shopping websites provide direct affiliation to the customer who wants to become affiliate partner. They provide their own API to the affiliate partner to show their products with specifications to the affiliate partner's website. This enables price comparison sites to monetize the products contained in the feeds by earning commissions on click through traffic. Other price comparison sites have deals with merchants and aggregate feeds using their own technology. In recent years, many ''off the shelf'' software solutions have been developed that allow website owners to take price comparison websites' inventory data to place retailer prices (context adverts) on their blog or content the only website. In return, the content website owners receive a small share of the revenue earned by the price comparison website. This is often referred to as the
revenue share Revenue sharing is the distribution of revenue, the total amount of income generated by the sale of goods and services among the stakeholders or contributors. It should not be confused with profit shares, in which scheme only the profit is share ...
business model. Another approach is to
crawl Crawl, The Crawl, or crawling may refer to: Biology * Crawling (human), any of several types of human quadrupedal gait * Limbless locomotion, the movement of limbless animals over the ground * Undulatory locomotion, a type of motion characteriz ...
the web for prices. This means the comparison service scans retail web pages to retrieve the prices, instead of relying on the retailers to supply them. This method is also sometimes called 'scraping' information. Some, mostly smaller, independent sites solely use this method, to get prices directly from the websites that it is using for the comparison. Yet another approach to collect data is through
crowdsourcing Crowdsourcing involves a large group of dispersed participants contributing or producing goods or services—including ideas, votes, micro-tasks, and finances—for payment or as volunteers. Contemporary crowdsourcing often involves digita ...
. This lets the price comparison engine collect data from almost any source without the complexities of building a crawler or the logistics of setting up data feeds at the expense of lower coverage comprehensiveness. Sites that use this method rely on visitors contributing pricing data. Unlike discussion forums, which also collect visitor input, price comparison sites that use this method combine data with related inputs and add it to the main database though collaborative filtering, artificial intelligence, or human labor. Data contributors may be rewarded for the effort through prizes, cash, or other social incentives. However, some combination of these two approaches is most frequently used. Some search engines are starting to blend information from standard feeds with information from sites where product stock-keeping units (SKUs) are unavailable. Empirical projects that assessed the functionality and performance of page-wise SSC engines (AKA bots) exist. These studies demonstrate that no best or parsimonious shopping bot exists with respect to price advantage.


Major websites


Business models

Price comparison sites typically do not charge users anything to use the site. Instead, they are monetized through payments from retailers who are listed on the site. Depending on the particular business model of the comparison shopping site, retailers either pay a flat fee to be included on the site, pay a fee each time a user clicks through to the retailer web site, or pay every time a user completes a specified action—for example, when they buy something or register with their e-mail address. Comparison shopping sites obtain large product data feeds covering many different retailers from affiliate networks such as LinkShare and Commission Junction. There are also companies that specialize in data feed consolidation for the purpose of price comparison and that charge users for accessing this data. When products from these feeds are displayed on their sites they earn money each time a visitor clicks through to the merchant's site and buys something. Search results may be sorted by the amount of payment received from the merchants listed on the website. large price comparison sites. In addition to comparing tangible goods, some sites compare prices of services, such as
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
, credit cards, phone bills, and money transfer.


Google Panda and price comparison

Like most websites, price comparison websites partly rely on search engines for visitors. The general nature of
shopping Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A typology of shopper types has been developed by scho ...
focused price comparison websites is that, since their content is provided by retail stores, content on price comparison websites is unlikely to be absolutely unique. The table style layout of a comparison website could be considered by Google as "Autogenerated Content and Roundup/Comparison Type of Pages". As of the 2011 updates to its search algorithm, known as
Google Panda Google Panda is a major change to Google's search results ranking algorithm that was first released in February 2011. The change aimed to lower the rank of "low-quality sites" or "thin sites", in particular " content farms", and return higher-qual ...
, Google seems to have started considering these comparison sites to be of low quality.


Niche players, fake test sites and fraud

Due to large affiliate network providers providing easily accessible information on large amounts of similar products from multiple vendors, in recent years small price comparison sites have been able to use technology that was previously only available to large price comparison sites. This technology includes software and plugins aimed to standardize the typical processes involving price and product comparison. Without much resources it became possible for amateurs to build seemingly professional websites, mostly using the popular
Wordpress WordPress (WP or WordPress.org) is a free and open-source content management system (CMS) written in hypertext preprocessor language and paired with a MySQL or MariaDB database with supported HTTPS. Features include a plugin architecture ...
CMS. These small sites often rely on Google for their visitors, which are monetized using affiliate networks like Amazon. The low content quality of typical niche sites, often bordering on spam and fraud, is a growing problem from the perspective of consumer protection and the quality of search engines. By playing the algorithm of search engine giant Google, it is possible to place low quality sites prominently in the search results. Until recently the phenomenon of fake test or comparison websites had escaped public attention. An analysis by testbericht.de discovered that 34,6% of German search traffic related to product tests on the first page of google leads to fake test sites. When a big German newspaper published a report about such a website and consumer protection organization sending out warning letters, observers started to note a sense of panic in the industry, with site owners changing or deleting the content in question. Amazon, being the biggest player in the affiliate market, declined to comment on the matter. Deceptive comparison sites give the impression of testing a product thoroughly. In reality, the tests are just an aggregation of freely available information, often leading to the most expensive products being recommended. This in turn increases the commission rate the site owners earn for the recommended products.


Google EU Court Case

In 2017, the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
fined Google €2.42BN for allegedly monopolising the comparison shopping engine (CSE) market.
Google Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
released a statement that the European Commission's assessment will be appealed. Google will review the formal decision, but expects that it will accrue the fine in the second quarter of 2017.


See also

*
Discovery shopping Discovery shopping (also known as discovery shopping search) is a type of online shopping that emphasizes the browsing aspects of the shopping experience. Discovery shopping search offers shoppers guided queries for more personalized results. The g ...
*
Gasoline price website A gasoline price website is a type of price comparison website that provides current fuel price information for different filling stations. Supported fuel types generally include gasoline, but may also include diesel, liquefied petroleum gas, ...
*
Customer switching In marketing and microeconomics, customer switching or consumer switching describes "customers/consumers abandoning a product or service in favor of a competitor". Assuming constant price, product quality, product or service quality, counteracting t ...
*
Smartfinance Smartfinance is an independent financial comparison website for helping consumers in emerging markets to make the most of their money. The website enables consumers to compare prices on a range of products, including mortgages, credit cards, bank ...
*
Switchwise Switchwise.com.au was an electricity and gas price comparison service website for Australian consumers. The site enabled consumers to compare electricity and gas prices offered by 25 Australian energy suppliers. Consumers could switch their hom ...


Literature

* Doorenbos, B; Etzioni, O; Weld, D.
A scalable comparison-shopping agent for the World-Wide Web
', AGENTS '97 Proceedings of the first international conference on Autonomous agents CM New York, NY, USA 1997 * Clark, D.
Shopbots become agents for business change
', IEEE Computer, Vol. 33, Issue 2, 2000


References

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