Retail-focused shopping comparison sites made between £120m and £140m in UK revenue during 2005, according to E-consultancy's 2006 Shopping Comparison Engines Buyer's Guide published this week.
Shopping comparison sites such as Kelkoo and Pricerunner have experienced a surge in demand from web users, who are keen to compare products and prices to find the best deal.
The amount of traffic to shopping comparison sites is growing at a very healthy 30% year on year, yet market revenues outstrip this figure. Revenue growth of up to 500% has been reported by comparison engines, driving massive amounts of sales to merchant partners.
Companies that actively use price comparison engines typically spend around 3-5% of their marketing budget to drive new leads, but investment in shopping comparison is set to increase, in line with user growth and as new comparison engines come to market.
As well as retail, comparison engines are becoming increasingly popular in sectors such as travel, financial services and utilities, according to E-consultancy's research.
"More and more consumers are using comparison sites to research products and services so they can find the best value products and services, whether they are looking for the best priced iPod or the most suitable mortgage," said E-consultancy analyst Linus Gregoriadis.
"Online marketers across a range of sectors from retail to financial services realise that comparison sites are an important weapon in their armoury for driving online sales," he added. "Retailers want to partner with comparison engines which can help consumers make informed decisions because it means they will be closer to the point of purchase when they arrive at their websites."
E-consultancy editor Chris Lake said: "The recent purchase of the uSwitch by the US media conglomerate EW Scripps for £210m is the latest in a string of acquisitions within this market which underlines the growing importance of comparison sites in driving online sales."
ComScore Media Metrix estimated that there were 14.9 million unique visitors to shopping comparison websites in February 2006, compared to 11.5 million for the same month in 2005. The volume of traffic to comparison sites is growing twice as quickly as for online retail where the market has increased by 15% in the last year.
The UK's overall online population swelled its ranks by 7% last year, while broadband connections surpassed dial-up connections. Broadband users are known to spend more, and to spend longer online.
Key market trends and findings
• For retailers in some categories, for example electrical goods, income which can be attributed to shopping comparison sites can amount to 30% of total online sales.
• Growth is being driven by increased use of the internet as a research tool before purchase.
• For some financial services products, comparison sites (also known as aggregators) can account for up to 50% of their internet business. Price comparison for loans and credit cards is particularly popular among consumers, for obvious reasons. Up to a third of new online business for car insurers can be attributed to comparison sites (also known as aggregators).
About this report
This guide to shopping comparison engines (also referred to as "price comparison" engines or aggregators) is primarily aimed at retailers/merchants who want to increase their online sales. It contains profiles of 12 major shopping comparison engines as well as market research about industry growth and drivers or growth.
Which shopping comparison engines are featured in the buyer's guide?
Cheapflights, Ciao, Genie Group, Kelkoo, MoneyExpert.com, NexTag UK, Pangora, PriceGrabber, PriceRunner, Shopping.com, Smart Quotes, Zencudo.
Linus Gregoriadis, Analyst, E-consultancy
E: linus[.]e-consultancy.com T: 0207 681 4051 or 07956 564713
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