What Retailers Dont Tell Consumers

 
 
By Evan Schuman  |  Posted 2006-05-29 Email Print this article Print
 
 
 
 
 
 
 

Opinion: Some of the largest Web retailers use the same product-comparison database. But a comparison of those sites with each other—and with the full database—shows what they're choosing to keep from their customers.

Theory: The Web is the great equalizer and, given the opportunity to access comprehensive, accurate and unbiased information about products they want to buy, consumers will choose to buy the products that are best for them, given price, features and various other details. But is that really the case? Its clear that the larger retailers have an edge, with well-known brands and the relative comfort-food-security belief that theyll be around to stand behind the product later. Well, probably not, but at least they are seen as being more than some vendor that the customer has never heard of. So lets fine-tune the question. Do consumers have a strong preference to buying from a particular large retailer, even if they believe a better product exists elsewhere?
Were not talking brick-and-mortar here, where parking and location—especially in these high-gas-price days—can have a huge impact on convenience. Were talking one retailers online site compared with another, where they are all equally convenient. With the effort required to surf to another site so minimal, would any retailers customer be so loyal as to pass up more attractive product offers at another large, comfortable national retail brand? Joe Chin, CEO of Guidester, argues that they would. Guidester is a paid-search company that began life as Decidia. The companys core product is an extensive consumer product database finds for customers the most ideal product by asking an extensive series of questions about price sensitivity, feature preferences and other details.
Does e-commerce allow price and product quality to trump large marketing budgets? Click here to read more. The database works well—better than many others in this space—but any database is only as good as the data its based on. The more data included—assuming the recommendations are honest and intelligent—the better the results. And therein lies the intrigue. The vast majority of the consumers who have used Guidesters database have done so while visiting various retailers—including Circuit City, CompUSA, Buy.com, J&R Music World and Ritz Camera—and clicking something along the lines of "Need Help Deciding?" or "Product Finder." The problem is that every retailer insists that the database only consider products that that retailer sells. So if the full robust database at Guidester headquarters knows of an ideal product for a consumer, it wont show it unless it happens to be sold by that retailer. Chin gave eWEEK special limited-time access to the full database, which is generally not available to the public. In the television category, for example, the full Guidester database looks at 1,834 products. At the Circuit City Web site, however, the Guidester database for televisions is limited to 152 products. At Ritz Camera, its even worse, with the Guidester database for televisions only considering 56 products. Guidesters full database looks at products from 99 vendors. The Guidester version that Ritz Camera shows considers just 14 vendors. Another example: The full Guidester database shows 2,269 notebook computers, but the Circuit City Guidester database shows only 47 such products. From CEO Chins perspective, thats exactly the way consumers want it. His argument is that consumers who venture to, say, Circuit Citys site have a strong preference to make the purchase at Circuit City. Isnt it more likely that Circuit City visitors might have a slight preference for Circuit City, but just happened to visit that site first and will be equally comfortable buying from another household-name retailer site, especially if the consumer were able to get a better product at a better price? Chin says no, on the convenience and confusion rationale. Lets say that all the retailers permitted Chin to show the full database to visitors. A consumer looking for a camcorder, for example, will expect to be able to just click on the best one and purchase it. But if its not sold by the retailer whose site the consumer is visiting, the consumer will get a frustrating message, Chin argues, that directs him or her to find the product at some unspecified retailer. Not a good experience, he said. Ill begrudgingly concede that Chin makes a fair point, but as a longtime fan of ConsumerReports and other product-comparison sites, I still find it hard to believe that consumers actually prefer not knowing about products that are—for the sake of argument—more appropriate for their needs. Next Page: Do retailers really want their customers getting the best products?


 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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