Decline of Comparison Shopping Engines

Comparison shopping or ability to compare prices was (and to a large extent continues to be) one of the greatest innovations since the advent of internet shopping. Why? Because it put shoppers in control of the single most important shopping insight - ability to find the best price. So, understandably, comparison shopping engines (CSEs) were once a rage. But, they are constantly losing their clout with advent of new technologies and pressure from players like Google and Amazon. Here are some of the factors that are taking away CSE traffic:

Search engines are investing on their own shopping platforms - Google and Bing continue to evolve their own product search platforms. In addition to standard product information, they are enriching product pages with content like product reviews, videos and related products. There is a clear conflict of interest when it comes to product related search results. And, guess who wins? It is definitely not CSEs.

Amazon marketplace - This may come in as a surprise since we are talking about comparison shopping. But, Amazon Product Ads drives more than 4% of CSE traffic and it is growing at a good pace. For most categories, traffic from Amazon is very high quality with high conversion rates.

Social Media and Mobile - All of us know how social and mobile technologies are changing our lives. They impact all aspects of digital landscape and online shopping is no different. This is just the beginning - traffic from social and mobile platforms will explode in the next 5 years.

Ability to comparison shop on online retail sites - This is slowly becoming the new hygiene factor for online retail sites. Most of the big retailers already offer this feature. But, I highly doubt that shoppers can be fooled for too long. It is not difficult to discover that almost all prices from competitor sites are either higher or within 98% of the price listed on the site offering this feature.

It is clear that comparison shopping engines are under a lot of pressure trying to keep their market share. But, there are some bright spots as well. The second generation CSEs are fairing much better and continue to grow at the expense of their older counterparts. In the next post, we'll discuss how CSEs have evolved and what newer entrants are doing to grow their traffic.