Price comparison sites give consumers the edge in the retail war
Have you ever been wandering around your local Harvey Norman or JB HiFi and wished you could compare the price of that new LCD TV the salesperson has been pushing you into? Of course you have -- we've all been in that situation!
Now, with an internet enabled phone, such as the new iPhone 3G, in your pocket and a price comparison search engine, like Shopbot, you can easily see whether you're getting ripped off or not.
Comparison shopping sites aren't new, but have been improving quickly, and now provide a quick and accurate summary of what different vendors are happy to charge you for the exact same product.
The concept is simple. You enter the name of the item, press 'search', and the comparison engine presents you with a list of products that match your request.
Like with most web based products, there are many different sites that offer a price comparison engine, including the big players like Google and Yahoo. You might remember Google's comparison engine from its former guise as 'Froogle'. Google subsequently re-branded Froogle to 'Google Product Search', a name that describes the product more accurately but is terribly plain. The site however hasn't been localised to the Australian marketplace, and, according to Google Australia's Will Easton, Head of Retail 'there's no specific timetable at this stage to launch Google Product Search in Australia.'
However, recent research conducted by Monash University's Australian Centre for Retail Studies reveals that half of all Australian shoppers research their purchases online before going to the store to buy, showing that there's clear demand for online price info. Australians also have a growing preference to use the Internet as an information source, with 25 per cent of the shoppers surveyed describing it as "the most crucial" source – more than TV, radio, brochures and catalogues combined.
Google's immediate lack of interest in a localised comparison engine has created a niche opportunity for players to enter the market in Australia. Sites such as StaticIce (which specialises in PC component pricing, but also covers consumer electronics), Getprice and ShopBot allow consumers to work out the best local price of an item before they buy.
To work out which comparison engine works best, we tried searching for a variety of common electronics products Australian consumers might search for. Where possible, we entered only product codes to determine best price and number of results.
We also searched eBay to see what members of the online auction giant were offering -- but we only selected 'Buy it Now' items and excluded shipping, as most websites quote prices ex-shipping.
Results varied widely between the sites we tested, and some sites specialise in specific product categories. For instance, StaticIce was best when searching for computer hardware, but eBay consistently gave more results for popular electronics. The variance in pricing was also substantial. For instance, the price of Grand Theft Auto IV for PS3 varied by over 10 percent across the sites we tested.
Of the sites we tested, only eBay has a dedicated iPhone app available in Australia, but US residents also have access to a clever iPhone app called Save Benjis which finds the best price for items in many different categories based on product name, manufacturer, or even barcode. We're hopeful this technology will come to Australia soon.
It's also worth noting that while the upfront price of items you find online might be substantially cheaper, most often the first price shown doesn't include delivery, which needs to be factored in to make a fair comparison.
Either way, researching your purchase before you buy makes good financial sense. Even if you do choose to buy at retail, having accurate competitor pricing information in hand can be a powerful bargaining tool at the cash register. If you do plan on bargaining on price at a local retailer, though, make sure you check that online retailers have a product in stock. "Bricks and mortar" retailers often avoid their fulfilling price match guarantees by claiming they will only match similar service level retailers that also have the product in stock.