Ease of instant access to products sold online attracts tens of millions of people to online stores every month. The Internet, with its own brand of “deal basement,” is attracting all kinds of opportunists – good and bad – to take advantage of the multi-billion dollar online retail industry. Distinguishing a fraudulent artist from a real merchant is one of the biggest challenges facing an online shopper today. To counter this, online shoppers are getting smarter in their online habits and are demanding more from their online experience.

Online shopping market

Despite ongoing concerns about fraudulent merchants, as well as identity and credit card theft, consumers still flock to the internet to search and buy products. There is a string of research pointing to the rise of online shopping. According to eMarketer, 85% of online shoppers will also be online buyers this year. JupiterResearch reports that US online retail sales will grow 16 percent in 2007 to $116 billion and over the next five years to $171 billion. And it’s not just the younger generation who are savvy on the Internet. A joint study by market researchers ThirdAge Inc and JWT Boom, US Third Ages – adults over 45 love to shop online. In fact, 73% of respondents considered shopping as their most important online activity.

Millions also use the internet to search for products before they go to local stores. A recent study by Accenture (May 2007) reports that 68% of survey respondents compare prices online. In January 2005, a survey by ShopLocal.com reported that 88.7% of consumers regularly or occasionally check products online before going to a local retailer to purchase. Armed with product information found online, informed consumers push local merchants to new levels of customer service and competitive pricing. This, however, is a topic for another time.

Back to today’s topic. Let’s take a look at these clever online shoppers. What trends are they setting? Where do they go online to search for the best products/services and the best prices? Who do they trust online?

It’s so easy

From the “box” in the corner of your living room, you can now visit hundreds of thousands of stores, anytime day or night, to compare products and prices. Just sit back and think about it for a moment. This kind of research is not even remotely possible in the world of bricks and mortar. Talk about power to the consumer.

The problem facing the Ottawa shopper today is how do you find the online stores that have the product you are looking for? The majority of consumers are familiar with search engines, such as Google and Yahoo. Most of this majority will use these search engines to find products online. Search engines accounted for a quarter of all visits to US shopping and classifieds sites in May 2007, according to Hitwise data, of which Google accounted for 15.6% of visits. The problem with these engines is that they look for every website that mentions the product in any way, shape and form – often fetching millions from information sites, blogs, organizations, and merchants – among those that are fake and real.

Herein lies the problem. There is already a lot of “spam” on the Internet for the shopper to effectively search for products using a general search engine. Along with this comes a new category of search engines focused on product search, comparison shopping sites. Established in the mid-1990s, the oldest of these sites for general purpose shopping and the largest, among them shopping.com, shopzilla.com, and pricegrabber.com, attract tens of millions of visitors each month. Smart shoppers are increasingly using these product-only search engines to easily find merchants who will sell a particular product online.

Setting the trend among today’s savvy online shoppers are those who use a growing selection of niche comparison shopping sites, such as HealthPricer for health products and kayak.com for travel. The trend was set by giants Expedia and CNet, which are sites that provide specific tools and product information that shoppers need to make that major buying decision. We’ll talk more about this later.

Who is afraid of the big evil wolf?

Online trust is a concern. Despite their best efforts to gather merchants and products in one place, most generic comparison shopping sites struggle with two areas of consumer concern – that of product naming conventions and denying fake merchants access to their sites.

There are no standard naming conventions for products on the Internet and as a result merchants specify the names of the products they see fit. General comparison shopping sites receive data feeds or crawl merchant sites for product data and transmit the exact naming conventions that merchants use to their sites. The result: shoppers are baffled by as many as 20 product names for a given search and have trouble comparing prices.

By Adam

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