Shopping search engines make it easy for people to research and buy products. They can also be a powerful and cost-effective customer acquisition channel for merchants.
A special report from the Search Engine Strategies conference, August 2-5, 2004, San Jose, CA.
Types of shopping search engines
"One of the benefits of shopping search engines is that they allow businesses to place their online stores in front of shoppers where they are already transacting," said Chris Bowler, Media Director and Search Practice Lead for iTraffic.
"Many shoppers might not know your brand," Bowler continued, "and it is unrealistic to think that people are always going to click on a keyword or banner ad. With shopping search engines, we see the potential for putting our products in front of consumers where they're already used to shopping - on their favorite shopping sites."
But shopping search engines are not a replacement for general search engines just yet, at least for the average consumer. "In a 2004 Forrester survey, approximately 18% of U.S. consumers mentioned shopping search in sites they visited to purchase products," said Laura Thieme, President and Founder of Bizresearch.
According to Bowler, there are three types of shopping search engines:
- Commission based
- Referral fees
- No-charge model
"With a commission-based site," Bowler explained, "the whole transaction is completely done on the original site. You pay a commission for every sale from the site. An example of this model is Amazon.com."
"On the other hand, with a referral fee model," he continued, "shoppers may search and view products at the shopping engines, but ultimately, they clicking over to the client site to complete the transaction. Then there is the no-charge model - Froogle is an example of the no-charge model."
What all of these models have in common is product feed, in which merchants provide the shopping search engines with the product inventory available on their sites. These are typically flat files, following the exact template and specifications that are provided by each search engine. The templates are fairly unique, and the specifications cannot typically be interchanged. "You really have to work on each template, one-by-one, and that really is the best way to get the most accurate listings on that search engine possible," said Bowler.
Data feed optimization and advertising
On some shopping search engines, search engine advertising appears in the search results before the product-page data. Merchants should always evaluate the time, expense, and ROI for ad buying and optimization.
"Coordinating shopping with search is where search engine marketers come in," said Misty Locke, President of Range Online Media. "If you recently saw a drop in your listings with Yahoo Shopping, it is because Overture listings are now coming up before the shopping feed."
However, Yahoo is currently doing a lot of testing for improvement. "They are changing now," said Locke, "and it is coming through optimization. So start optimizing your Yahoo feed. Here you can optimize to do better in the shopping portals than a company spending more than you."
Always review the costs for putting together a data feed and updating the feeds on a regular basis, which is something Froogle requires, said Thieme. "There is not a lot of incentive to pay someone to optimize a feed if you have a small product list or small rate of return," she explained. "Personally, I would rather pay Froogle a CPC (cost-per-click) basis. Then I can get in touch with someone on what to do when a product appear in search results, like I can with Shopping.com."
Shopping.com provides advertising opportunities. "If you are running a special promotion, like a special sale or free delivery, Shopping.com allows you to place banners, skyscrapers, etc. on top of your product feed to spike your activity even further," said Bowler.
Preparing your feeds for shopping search engines
With 18 million visitors a month, Amazon offers merchants a very broad reach. "Amazon is complex because the process is all done through Amazon, and we are on a commission," Bowler explained. "We pay 50% of gross order value, including shipping. We adjust for returns. We don't pay for returns but we pay a flat fee if one occurs. And we pay a modest monthly fee."
"To set up Amazon, you have to review about 29 documents and submit back to Amazon," continued Bowler. "It takes two to four months to do all the set up that is required - all of your legalese, your privacy policies, etc. needs to be included in your storefront, policies on returns and credits. They need content and images from you to create your storefront, all of your shipping options, any taxable rules (per state). Then you have to set up the product feed - your images, swatches, pricing, tax codes, and available inventory."
Once your feed has been completed, then the next major hurdle is having a dedicated person on your staff download your orders and begin the fulfillment process. "Amazon requires this to take place once a day," said Bowler. "You need to provide back what the order shipping information might be, so the customer can monitor the progress of the shipment. And you need to have someone create adjustments where there is a return, so you can post that back to Amazon and not get charged the full commission on the sale price."
Thieme provided some additional guidelines for preparing and monitoring your inventory on shopping search engines:
- Monitor search term relevancy. Most shopping search engines search title and descriptions for keyword matches, said Thieme.
- To accurately measure conversions, use a Web statistics/analytics tool. "You need to put real eyeballs on your statistics and not just have an automated tool do all the tracking work," she said.
- Merchandise does not need to be the least expensive product on a page. However, in order to compete, pricing should be in the same ballpark as other products. "I will pay the extra $20 for an iPod if I know that has good customer rating," said Thieme.
- Provide good customer service so you can receive good reviews and, thus, improve your rankings. Additionally, monitor your customer reviews as well as your competitors'.
- Make sure your data feed has quality product photos and product descriptions.
- Ensure rapid and accurate fulfillment.
Thieme also recommended having a user-friendly and search-friendly merchant site. "If your site has poor ROI, do not expect shopping search to improve your conversion rates," she said.
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