Comparison shopping websites are popular among consumers, but how does it impact business?
The global online market provides the consumer with endless supplies of information regarding products and services. With so many options out there, it makes sense that comparison sites have become the go-to research tool for many online shoppers.
While these sites may appear to help customers find exactly what they’re looking for at bargain prices, what are they doing to the market as a whole? How is your industry being affected by these sites and their promises to customers? Can they actually be a benefit to you? How will your industry be affected in this growing comparative world?
The Pros and Cons of Consumer-Driven Comparison Sites
Any big influencer in a market will have pros and cons connected to it, but with comparison sites, these pros and cons may have a direct impact on the businesses they analyze.
One very positive mark for consumers is that these sites allow them to easily save large amounts of money by leading them to the cheapest price for the desired outcome. They do this by often having access to smaller companies that are perhaps not as well known but offer similar options for considerably less. These sites also save the consumer an abundance on time since, with just a few clicks, they are able to see hundreds of different quotes for any given good or service.
However, consumers do face negative side effects of comparison site usage as well. Many of these consumer sites charge fees to be listed on their site based on the type of product available. Not all companies want to pay for listings, so in reality consumers may not be seeing every possible option available to them. Customers are also losing the direct contact with companies. Because of this, there may be options available to them that aren’t listed, which would not be made available through a comparison site. When a consumer speaks directly with a business, and not through a third party, there is a different level of dedication given, which leads to better service.
Which Businesses Can Thrive Through Comparison Sites?
These comparison sites can be an amazing opportunity for businesses if approached correctly. This is especially true for smaller businesses for whom change and adaptability are an essential key to success.
Comparison sites offer small businesses boundless loads of information about the current marketplace in their industry. This allows them to stay on top of current trends, pricing changes, or even customer preferences in any given industry. Being able to spot the strengths and weaknesses of your competitors will give your company a leg up.
Additionally, the type of customer who visits a comparison site will, for the most part, be someone who has already decided on buying. This is great news for small businesses who depend on every single sale, and who will thrive on smaller comparison sites dedicated to their industry.
Which Businesses Will Feel Negative Effects?
Since comparison sites strive to provide consumers with the lowest possible prices, larger companies with set standards and limited capacity for fast change will undoubtedly suffer. Customer preferences and expectations are in constant states of transition. Because of this, bigger business will be at a disadvantage, particularly with comparison sites which offer their users consistent updates regarding price changes and trends. Comparison sites also naturally drive the price down due to competitive pricing.
The insurance industry is one example of failures due to comparison site services. Many of these sites will not include pricey additions such as cancellation policy or adjustment fees in their prices, leading consumers to take on contracts which may not be in their best interests, and eventually ending with negative opinions of the insurance company who unfortunately may not have had any direct contact with the consumer to begin with. Because larger businesses do not have constant watchful eyes on these sites, errors are bound to occur.
Ultimately, consumers will continue to use comparison sites that give them access to hundreds of offers at the click of a button. They will continue to grow in popularity and influence over the global online market. Because of this, it is up to businesses to closely monitor how their product and others are appearing in this consumer arena and make the changes accordingly. Industries with the right capacity for adaptability will thrive, while those who hold fast to their ways, without considering current trends and customer preferences, will steadily fall.