Future of On-Line Shopping

I would like to gather some people's thoughts about what the future
holds for on-line shopping when such issues surrounding internet
privacy are so controversial right now.

I look forward to your responses.

Christa

The volume of goods being purchased via the Internet is rising.
However, while certain consumers know what they want and feel
comfortable making an instant purchase, many have questions about
product pricing, availability and quality. Increasingly, the latter
group is turning to online comparison-shopping sites for help when
making a purchase decision.
Convenience is a big attraction of these sites. A user can find
information about a variety of products and companies. BizRate.com,
for example, says it works with more than 40,000 sellers and has
information on more than 30 million products. The high volume of
products is one reason why Jupiter Research found the number of
individuals using the BizRate.com site increased from 11.3 million in
December 2002 to 12.6 million in December 2003.

Yet companies such as BizRate.com, Pricegrabber.com, NexTag and
Shopping.com go beyond simply connecting potential customers to
desired products. These sites feature up-to-date, side-by-side feature
comparisons; written evaluations from individuals who have used
different products; availability information, such as who sells an
item and whether or not it is in stock; and pricing comparisons,
including any shipping charges.

Reviews and Reports

The sites try to function like Consumer Reports and provide
information about product performance and reliability. As a result,
the online comparison-shopping sites feature reviews written by other
consumers. For instance, Shopping.com has approximately 2 million
reviews on its network.
However, the Internet's anonymity presents potential problems with
these reviews: In hopes of boosting its sales , a company could have
an employee, relative or distributor contribute a glowing product
review, which might influence potential purchasers. "We do get a few
positive reviews from biased sources, but the bigger problem comes
from disgruntled employees writing negative reviews," said Helen
Grace, who oversees reviews in Shopping.com's Home and Gardens
section.

As a result, many comparison sites have been forced to put some checks
and balances in place. If Pricegrabber.com finds that a company has
doctored a review, it permanently bans the firm from its site.
In addition to collecting information about various types of products,
the sites feature links to vendors and retailers, so shoppers are
whisked away to e-commerce locations that can take their orders.
"Because the consumers prequalify themselves, online shopping sites
generate a large number of qualified sales leads," said Patti
Freeman-Evans, an industry analyst at Jupiter Research.

Retailers Working in Collaboration
Consequently, retailers are working closely with online
comparison-shopping sites. "At first, many retailers thought that the
comparison-shopping sites presented them with competition, but now
they view them as another distribution channel," said Ross Rubin,
senior analyst at market research firm eMarketer.

The high success rate translates into top advertising charges, and
that has attracted a growing number of competitors. In 2003, Google
entered this space with its Froogle service, and Microsoft (Nasdaq:
MSFT) and Yahoo (Nasdaq: YHOO) have been improving their online
comparison-shopping services ever since. Online retailers, such as
Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) , have been
developing their own online comparison systems. Meanwhile, large
retailers are starting to offer such services so consumers will stay
on their sites rather than go somewhere else to make a purchase.
As the balance of power shifts in the online marketplace, sites are
struggling to differentiate their services from one another, and a few
have been shifting their focus. "A lot of the sites started off
concentrating on providing consumers with the lowest-cost item,"
eMarketer's Rubin told TechNewsWorld. "Then the vendors discovered
that the consumers were more interested in quality and reliability;
only one out of every four purchases is based solely on price."

Distribution agreements have been another area gaining attention: The
Neiman-Marcus Group works only with BizRate. Since most sites try to
sign up as many retailers and distributors as possible, such special
arrangements are becoming rare.

Timeliness and Presentation

Timeliness of data is another area of emphasis. Getting data from
suppliers is fairly straightforward, but companies are examining how
to use information they collect more effectively. In monitoring user
experiences, sites can consolidate significant amounts of data about
consumer brand preferences, price patterns and buying tendencies. Some
are thinking about selling that data to retailers, who always want to
gain more insight into which features are most important to their
consumers.
Another area of emphasis is presenting product data in a more
user-friendly and effective manner. "Pricegrabber.com has a feature
where the system automatically notifies me when a product's price
drops to a certain level," said Greg Lantz, a Riverside, California,
native who uses the site to find the components needed to build
computers from scratch.

As the competitive landscape intensifies, dividing lines between this
market segment and related technologies, such as portals, might blur.
"The key to success with online shopping is traffic," noted
eMarketer's Rubin. "Folks like Google and Yahoo have plenty of it. So
while online comparison-shopping has a great deal of potential, there
is a question about whether it will remain a stand-alone business or
become a service bundled in a portal."

Referance:
http://www.technewsworld.com/perl/story/33131.html

For more Details :
http://www.nlcpi.org/books/pdf/Briefly_Aug01.pdf
http://onlineethics.org/privacy/scene.html

By :
Tareq Qasem
Amman-Jordan