NexTag UK Grows Up Fast

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In a little more than six months of operation, NexTag UK has attracted 1 million unique users to its online comparison-shopping service in Britain and become one of the top five shopping sites in that market.


Visitors to www.nextag.co.uk can compare prices and products in categories such as consumer electronics, hotels, apparel, DVDs and home and garden. Merchants include Tesco, Active Hotels, PC World, Comet, Ebuyer, LX Direct, Dabs, Micro Direct and Misco.


The British site is run from NexTag's San Mateo, CA, headquarters, though a London office may open in the summer. It helps that NexTag's British site is modeled on the U.S. flagship.


"There's very little difference in feature and functionality," said Mark Bradley, NexTag vice president of product shopping. "But when you look at what we offer here -- ROI tracker -- it's not widely used there on a SKU-by-SKU basis."


A point of difference for NexTag UK is that the value added tax, or VAT, is added to merchants' prices. Also, the company claims to have normalized its currency and tax data for Europe's complicated markets.


Britain mirrors the U.S. e-commerce market in attitudes, but not scale. The UK has fewer online retailers, as stores easily serve a smaller and more densely populated country.


British merchants also are more attuned to conversion rates because there are fewer search engines with which to partner. The involvement is at a much higher executive level given that Britain lacks the longer history of U.S. comparison shopping.


And unlike in the United States, the cell phone category is a major one for Britons who tend to compare products and prices online. Searches on computers, consumer electronics, apparel/accessories and travel are popular, too.


Britons last year spent about $32 billion on e-commerce, according to Cybersource International. About 58.5 percent of the population, or 34.9 million Britons, had Internet access, according to September 2004 data from Nielsen//NetRatings.


Based on Forrester Research's estimate of the 20 percent to 25 percent of consumers who comparison-shop online in the United States, the British equivalent would be 12 million to 15 million people.


Founded in 1999 with a $13 million investment, NexTag in the United States claims 250 employees and consistent profitability over the past three years. It is distinguished by its True Price, Price History, Price Drops and Price Alerts offerings.


The U.S. NexTag site saw a 56 percent rise in December 2004 traffic to 12 million unique visitors versus the year-ago period. However, as with formidable competitors Shopping.com, Shopzilla.com, PriceGrabber.com, MSN Shopping and Yahoo Shopping, traffic falls after the holiday season.


According to Internet monitor Hitwise, NexTag's traffic share in the U.S. comparison-shopping market was 17.34 percent in February.


NexTag UK's biggest competitors are players like Yahoo Shopping, Shopping.com's DealTime UK, Kelkoo.com, PriceRunner and Ciao.com. Like many of its kind, NexTag sees Britain as a steppingstone for the larger European market. But Europe comes with its own challenges. Despite its youth in that region, NexTag is confident it is well equipped.


"I'd say it's the structuring of data," Bradley said. "Because when you look at the European market, being able to structure the data in individual categories is a strength for us. It creates conversion for our merchants."


Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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