South-Western - Management  
The Revolution That Wasn't
Topic Online shopping
Key Words Online shopping, e-commerce, comparison websites, brand preferences
InfoTrac Reference A109706203
If your textbook came with an InfoTrac passcode, click here to login on InfoTrac.
News Story

Experts expected have long claimed that the Internet will empower consumers by offering an increasing number of choices at ever-decreasing prices. Comparison shopping site would display all available prices to consumers allowing comparison shopping.

Things didn't turn out as planned. Only a handful of comparison websites remain, and, unbeknown to most shoppers, most of them rig search results so that the best placements go to the highest bidders rather than the lowest price. Only 15% of online shoppers use shopping web sites, and most of them don't even bother sorting by price. Only 3% do so at Shopping.com. As shoppers become overwhelmed with all the choices, they rely on their brand preferences. More than 50% of the dollars spent online go to the top 30 retailers.

Finally, even if one out of ten shoppers referred by a comparison site buys a retailer's product, the retailer still owes ten referral fees, which ends up being an unprofitable business.

Questions
1.

Have you ever used a comparison bot? If yes, how helpful was it? If not, why not?

2.

Is the Internet going to help or hurt branding?

Source Victoria Murphy, "The Revolution That Wasn't," ," Forbes Global,Oct 27, 2003, p86.
Instructor Discussion Notes Discussion Notes
These notes are restricted to qualified instructors only. Register for free!

Return to the Electronic Commerce - Online Business Index

©2005  South-Western.  All Rights Reserved