Alan Mitchell: Shopping search engines are at Model T Ford level

Its an unspoken assumption that while marketing is an organised, centralised, professional activity that relies on big budgets, its consumer counterpart shopping is an amateur activity undertaken by isolated individuals without organised, professional help or funding.

It’s an unspoken assumption that while marketing is an organised, centralised, professional activity that relies on big budgets, its consumer counterpart – “shopping” – is an amateur activity undertaken by isolated individuals without organised, professional help or funding.

There is only one reason for this assumption, however. Consumers cannot afford, or are unwilling to pay for, professional services that help them go to market. But what happens if the cost of providing such a service fell so low that it became affordable?

That’s exactly what’s happening. By allowing individuals to specify exactly what they are interested in, search helps them gather relevant information far more quickly than was even conceivable ten years ago. Or take price comparison. If it costs £1,000 to thoroughly research a market, gathering comprehensive, up-to-date information on everything that is available is beyond the pocket of the ordinary consumer. However, by sharing the results of such research among 10,000 people, price comparison services bring this cost down to just 10p per person. Or lower.

Together, search and comparison are revolutionising consumers’ costs of obtaining the information they need to make better shopping decisions. They represent a tipping point in the history of marketing: the emergence of professional services that help consumers go to market.

But this is just the beginning. The services we see now are mere Model Ts – crude working prototypes – of a massive new industry.

The Model T was a miracle in its time. With it, in the course of a decade Henry Ford slashed the costs of making a motor car by 90%, making it an affordable mass market item for the first time.

By today’s standards, however, the Model T was an awful product. It didn’t have a starter motor, so many people broke their wrists hand-cranking it to get it going. Its tyres were glorified bicycle wheels that were highly prone to puncture. If this happened, you needed the tools and skills of a mechanic to fix the problem. The vehicle had virtually no suspension, its seats were covered wooden planks and windscreens and hoods were optional extras.

But none of this mattered at the time because the Model T was such an advance on what went before. The bad bits merely opened up a huge agenda for innovation and improvement.

Today’s shopping services are at a similar stage. They lack many features that would make them truly helpful. Often, the range of products compared is limited. They assume perfect knowledge on the part of the shopper, and provide little or no advice. They offer little opportunity to customise the service to fit different priorities. What about “speed of delivery” or “reliability and quality” as a priority rather than just price? And often their business models are less than 100% upfront. For example, products may be ranked according to the amount of commission paid by the seller rather than the best deal for the buyer.

So here’s a prediction. Over the next five years or so, this industry will mature rapidly as these glitches and drawbacks get competed out.

Take Twenga, a fast-growing “shopping search engine” from France which recently launched in the UK with £1.87m backing from 3i. Thanks to its crawler technology, Twenga offers the widest selection on the market (9 million products from 7,000 online retailers) while attempting to merge search and comparison.

Its business model is different. Like Google, it ranks search results “naturally” according to its own algorithms (including factors such as quality of information provided) and does not charge retailers for clicks on these results. Like Google, it carries ads from affiliate sellers in a clearly marked area distinguishing “advertising” from “editorial”. Its search facility allows users to specify attributes they are interested in such as brand, shop, budget, colour, size and memory. It also lists “most popular products”, has a special area for promotions and special offers, and offers a separate “price drop” service, where it e-mails you if a retailer reduces the price of an identified item.

Meanwhile, it’s working on an expert review aggregation service – identifying expert reviews on specialist websites by key words and aggregating key extracts on its own site. Perhaps surprisingly, its most popular categories are not the usual suspects like electricals, but “softer” categories such as fashion and furniture. “Comparison sites have not evolved a lot,” says Twenga director Bastien Duclaux. “We need to bring additional value to the shopper.”

Twenga is just one of many innovations with the potential to change the shape of shopping. Not all of them are coming from obvious sources. In the state education system for example, the Training and Development Agency for Schools (TDAS), assisted by concierge business TEN, is pioneering a new service that encourages headteachers to ask questions relating to their job. Researchers then go away and find the best possible answer. So what? you might ask.

The core insight of the new service, called The Key, is while it may be expensive to answer a question the first time, the cost of answering the same question a second or third time soon plummets. An “on-demand” information service driven by users’ questions in a narrowly focused area quickly generates a rich, up-to-date and low-cost “living” knowledge base of all the questions users are ever likely to ask. It won’t be long before the same concept is applied to specialist shopping categories from digital cameras onwards.

Twenga, The Key, social search, codified, “reviewed” peer reviews and so on. Combined, the implications of these developments are huge. A new type of shopping channel is emerging. It has the potential to displace retailers – both online and offline – as the shopper’s trusted first port of call when going to market. It will evolve to be a highly efficient communication channel for brands, providing them with the opportunity to communicate with exactly the right people, about the right things, at the right time.

And, because it is continually driven by the input of new information from the shopper (searches, queries, preferences and so on) it will also be a growing source of market information. Duclaux is only half joking when he says: “We could become the Nielsen of shopping.” This week, he notes, women’s parkas and Dr Martens Jenna high leg boots are in particularly hot demand.

For most companies, emerging shopper services are strategically much more important than Facebook or MySpace. Shame they’re not as sexy.

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