Personalisation threatens price comparison shopping

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By: Wise Marketer Staff |

Posted on August 24, 2007

One in three British consumers has stopped using price comparison web sites and a further 47% said they would not use them again after finding out the results are often biased according to which listed company is paying the most, according to the '2007 Online Shopping Report' commissioned by cashback cooperative Quidco.

As a result, the study found, consumers are tending to turn to different methods when they buy online.

Personalisation wanted most
More worryingly for marketers who are yet to embrace Web 2.0 methods, some 35% of the consumers surveyed said they no longer wish to be targeted by traditional online marketing, with 82% preferring brands to use highly-targeted communications after they have shown a specific interest in a product or service via impartial third-party web sites.

Seven out of ten consumers (70%) said they don't shop direct any more. Only 30% of online shoppers say they still go directly to well known, specific-brand web sites (such as Amazon), while the remaining 70% are loyal to starting the purchase process via an intermediary web site such as a search engine, cashback cooperative, or price comparison web site.

Loyalty by gender
The report also found that women are more branded-outlet loyal than men, but only 32% of women reported always going direct to well-known brands' web sites. According to Quidco director, Paul Nikkel, "British consumers are realising there are good deals to be had shopping online and are becoming increasingly sophisticated at finding them. Price comparison web sites have for fulfilled that role for a while, but as awareness of the potential for their results to be biased spreads, consumers are going to be looking elsewhere and marketers need to ensure they are featured in the right places."

And, despite much industry talk about web site design and usability, only 5% of consumers actually cared whether a web site is easy and quick to use, and only 23% are particularly bothered by security issues. In fact, what the British online shopper really wants is to "feel as though they are getting a combination of good customer service and price" (65%) from an impartial and unbiased source.

There is also a clear generational trend as younger consumers are more driven by price and service, while security is more important in the decision making process for older online shoppers.

Shifting loyalty
More than half (52%) of consumers said they are already aware of cashback cooperatives, and 33% of those said they actively use them for the majority of their online purchases. (A cashback cooperative transfers affiliate revenue from tracked online shopping transactions directly to its consumer members.)

Of those who had not yet heard of cashback cooperatives, 86% said they would use a service that enabled them to access branded sites to accumulate cashback and 57% said they would use them to make the majority of their online purchases, suggesting that online customer loyalty may be shifting from specific branded outlets to unbiased referrers.

Nikkel concluded: "Consumer loyalty to the impartial nature of cashback cooperatives is a powerful tool and, with such a large proportion of consumers using cashback cooperatives for the majority of their online purchases, brands not involved yet could lose out on significant sales."

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