SmartShop Touts More Than Price

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Everyone loves a bargain, but SmartShop.com, a comparison-shopping service launching Thanksgiving Day, has built its site on the premise that people want more than just the lowest price when comparing products.


"Price is rarely the end-all point of comparison," said Benjamin Wayne, co-founder and CEO of SmartShop, San Jose, CA. "If a consumer is buying a Christmas present, price becomes secondary to availability, shipping time, gift-wrapping and so forth. If a buyer is not sure of the gift, the return policy becomes extremely important."


Jeff Moore, Internet analyst at The Strategis Group, Washington, agreed.


"To some, immediacy is of more value. To others - status, getting everything in one shipment or simple, good old quality," he said. "[SmartShop] is onto the right idea that price is not the whole ball game."


SmartShop will allow users to compare offerings based on a variety of criteria - including product availability, free shipping, return policies, customer service, rebates, warranties, gift wrapping, tax and credit cards accepted - and then execute the transaction without moving to another site.


The site initially will shop for books, videos, music, consumer electronics and toys, followed next month by the addition of computer hardware and software, gourmet foods, wine, clothing and sports equipment.


Merchants benefit as well as consumers, Wayne said, by having fewer abandoned shopping carts and by being able to better target customers.


All merchants - 300 to start, including Amazon.com, barnesandnoble.com, eToys.com, CDNow.com, buy.com and towerrecords.com - will be screened before receiving the SmartShop Seal of Approval. Merchants will be listed based on ratings from sources such as Gomez Advisors, Bizrate and the Better Business Bureau, in addition to internal ratings by SmartShop editors, who will be available to help consumers with searches.


Retailers or manufacturers do not pay for placement in the listing index. SmartShop will draw revenue from promotions that allow retailers to target anonymous demographic profiles, advertising on its site, affiliate relationships and by licensing its SmartEngine search tool to other sites.


"We don't make any money off consumers," said Wayne, adding that his company is looking to affiliate and partner with credit card companies, online services, content providers and retailers. He is looking for venture capital to support the privately funded company.


Jupiter Communications, New York, estimates holiday shoppers will spend $6 billion this season, roughly double the $3.1 billion spent in November and December last year. SmartShop's holiday debut comes in the wake of increased activity by comparison shopping services.


MySimon.com recently expanded its coverage to more than 1,700 sites. DealTime.com earlier this week launched DealAgent, a pricing tool that allows paying merchants to get an instant picture of what consumers are looking to purchase and what they are willing to pay. Merchants can use this aggregate data to price products for rapid sale, meet sales quotes or upload excess inventory.


SmartShop will use radio and outdoor ads to publicize its arrival. To encourage visits, it will pay for 2,500 purchases by site visitors selected at random this holiday season. A broadcast ad campaign is planned for early next year.


It is a start, said Moore, but the company must do more to avoid being lumped in with other shopping services.


"Through their marketing they have to make it crystal clear that they're providing the overall value of a company's goods and services and not just the price," he said. "I think it's an intelligent business model, but will succeed only if they can effectively build and project their brand image."
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