Posted on January 30, 2009 | By lindstrom

Auction Sites on the Block?

E-commerce is growing exponentially, and e-tailing sites are mushrooming around the globe. The consumer is faced with an infinitely swelling array of choices and, in the process, is becoming confused by it all.

One outcome of this proliferation is the growing need for shopping assistance tools. As more classic e-commerce sites appear on the Internet, the need for tools to help consumers navigate their way through the maze of choices is growing.

Many people might think online auction sites would be the answer to this shopping dilemma. The auction at least defines market price according to consumer demand.

But the fact that more than 200 new auction sites appear daily on the Net makes it tough for most of these sites to generate the traffic and, consequently, the auction activity needed to ensure attractive offers. Because the race to capture consumers is spread among so many competitors, there is not enough interest on every site to stimulate the market and establish price. Moreover, with more than 20,000 auction sites available on the Net, comparing price and assessing each site’s selection and range have become baffling tasks for the individual.

While auction sites have garnered a lot of attention, a range of new online shopping concepts has quietly been born. The emergence of these tools indicates consumer confusion with the plethora of choices now available on the Net, and it signals that auction sites are not necessarily the only means of making shopping on the Net easier.

The new shopping agents assist with personal shopping. They are tools that virtually and continually roam aisles and riffle through racks, looking for items to fit the individual shopper’s tastes, needs and budget.

These always-online shopping browsers float on screen while shoppers surf from e-tailer to e-tailer. Examples of such sites are, NeoPlanet, and RUSure. They advise individual shoppers on the best brands, and they compare products and negotiate prices.

Is this our first glimpse of real infomediaries? These sites are able to do all the things we’d expect of them. As independent third parties, they track consumer habits and negotiate on behalf of the shopper.

The real benefit of these shopping agents is that, because they can roam the Net so comprehensively and investigate against consumer criteria so thoroughly, they are able to recommend solutions to the consumer that he or she may never have come up with alone.

These personal shopping tools establish consumer brand loyalty by demonstrating an understanding of the consumers for whom they work. And this is a factor that promises to influence the shopper more strongly than even price or selection.

Most Internet site competition is established on price. But when sites are forced to match prices, when they all claim to be the cheapest, the price competition concept dissolves. Without comparisons to be made, the meaning of “cheapest” disappears.

And that’s the stage at which auction sites now find themselves. It’s a stage that demands a change in the direction of their marketing principles if they want to avoid finding themselves on the auction block.

Posted in: Insights

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