The future of comparison shopping

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Includes: AABA, CNVR, GOOG, MSFT, SHOP-OLD
by: David Jackson

Sean O'Rourke, author of the Organized Shopping Blog, writes his thougths and questions on the future of comparison shopping. This is a must-read for anyone interested in Shopping.com, Google's Froogle, Yahoo Shopping, MSN Shopping, and ValueClick's entry into comparison shopping. Here are his thoughts in full:

1. I think we are in the early stages of shopping search, judging by how much visitor volume still comes via blunt keyword searching. As with other types of web searching, consumers are often using the wrong tools for the job, simply because they don’t know other tools exist.

2. In other words, many shopping searches today are the equivalent of hunt 'n' peck keyboarding, IMO.

3. Part of the problem is that the structured shopping web is relatively small compared to the rest of the unstructured shopping web. Part of the problem is usability: making tomorrow’s richer shopping searches as simple as today’s general keyword searches.

4. Small, specialized shopping search engines are quietly launching in several categories, using category-specific rules to bring structure to the larger unstructured marketplaces.

5. The problem is many of these niche engines do not have volume, and there is only so much "top of mind" real estate available for new tools. The general shopping comparison engines could acquire some of these smaller search tools and give them the necessary exposure.

6. The general shopping comparison engines are also expanding on their own into other markets, such as travel, autos, financial services, you name it. These services might not be category-leaders on their own, but longer-term could lead to interesting integration.

7. Sooner or later, Bill G. is going to realize that his shopping site will not be able to keep pace if this area gets hot, similar to the situation with general web search. Make or Buy?

8. Froogle has been identified as one of Google’s projects most likely to come out of beta soon. But the beta tag has been defined recently as a service that would be fine with one or two more major changes. Another major change or two in the works for Froogle?

9. The aggregation of merchants reviews and product reviews at Froogle could be the start of something big. The only reason this is still under the radar is because Froogle is so disorganized.

10. Yet, as most shopping sites try to aggregate more results, some job sites are looking to return less results, with social networking as a possible solution to application overload.

11. Other shopping sites like NetFlix are also trying to harness social networking. At least one of the major shopping comparison sites is said to be looking into this area.

12. Much of the buzz in shopping search is coming out of the travel sector.

13. Among the developments gaining momentum are desktop shopping search and shopping search toolbars. SideStep claims 7 million downloads of their travel toolbar, and SideStep-like tools are coming out of the woodwork, both for travel and other areas.

14. Once again, we get back to the problem of only so much real estate available, this time in the number of toolbars per browser, or applications per desktop.

15. I think all this leads us to an incredible amount of aggregation of technologies and/or companies in the next few years.

16. This aggregation should also provide more compelling experiences for the user… to the point where people will not need to do general web searches for an increasing number of products and services. One way or another, the tools will already be at their fingertips.

Sean posted these thoughts on a webmaster's discussion board. At the time of writing there have been no responses.

Full disclosure: at the time of writing I'm long SHOP.