Theory: The Web is the great equalizer and, given the opportunity to access comprehensive, accurate and unbiased information about products they want to buy, consumers will choose to buy the products that are best for them, given price, features and various other details.
But is that really the case? It's clear that the larger retailers have an edge, with well-known brands and the relative comfort-food-security belief that they'll be around to stand behind the product later. Well, probably not, but at least they are seen as being more than some vendor that the customer has never heard of.
So let's finetune the question. Do consumers have a strong preference to buying from a particular large retailer, even if they believe a better product exists elsewhere?
We're not talking brick-and-mortar here, where parking and location?especially in these high-gas-price days?can have a huge impact on convenience. We're talking one retailer's online site compared with another, where they are all equally convenient. With the effort required to surf to another site so minimal, would any retailer's customer be so loyal as to pass up more attractive product offers at another large comfortable national retail brand?
Joe Chin, CEO of Guidester Inc., argues that they would. Guidester is a paid-search company that began life as Decidia. Guidester's core product is an extensive consumer product database that walks customers through to the most ideal product by asking an extensive series of questions about price sensitivity, feature preferences and other details.
The database works well?better than many others in this space?but any database is only as good as the data it's based on. The more data included?assuming the recommendations are honest and intelligent?the better the results. And therein lies the intrigue.
The vast majority of the consumers who have used Guidester's database have done so while visiting various retailers?including Circuit City, CompUSA, Buy.com, J&R Music World and Ritz Camera?and clicking something along the lines of "Need Help Deciding?" or "Product Finder."
The problem is that every retailer insists that the database only consider products that that retailer sells. So if the full robust database at Guidester headquarters knows of an ideal product for a consumer, it won't show it unless it happens to be sold from that retailer.
Chin gave StorefrontBacktalk special limited time access to the full database, which is generally not available to the public.
In the television category, for example, the full Guidester database looks at 1,834 products. At CircuitCity, for example, the Guidester database for television is limited to 152 products.
At RitzCamera, it's even worse, with the Guidester database for televisions only considering 56 products. Guidester's full database looks at products from 99 different vendors. The Guidester version that RitzCamera shows only considers 14 vendors. Another example: the full Guidester database shows 2,269 notebook computers but the CircuitCity Guidester database shows only 47 such products.
From CEO Chin's perspective, that's exactly the way consumers want it. His argument is that consumers who venture to, say, CircuitCity's site have a strong preference to make the purchase at CircuitCity.
Isn't it more likely that CircuitCity visitors might have a slight preference for CircuitCity, but could also just have visited that site first and that consumer might be equally comfortable with buying from household-name retailer site, especially if the consumer was able to get a better product at a better price?
Chin says no, on the convenience and confusion rationale. Let's say that retailers all permitted Chin to show the full database to all visitors. If a better camcorder, for example, is shown, the consumers will expect to be able to click on it and purchase it.
But if it's not sold by that retailer, they'll get a frustrating message, Chin argues, that directs them to find the product at some unspecified other retailer. Not a good experience, he said.
I'll begrudgingly concede that Chin makes a fair point, but as a longtime fan of ConsumerReports and other product-comparison sites, I still find it hard to believe that consumers actually prefer not knowing about products that are?for the sake of argument?more appropriate for their needs.
Let's now get into the business realities of this situation. The retailers clearly do not want their customers getting the best products out there. Retailers are content with letting consumers choose the best products from the handful they're offering at the moment.
This raises a branding question for Chin. When I started looking into Guidester, I was impressed with the sophistication and the thinking?and the programming--that went into their database. But I found the results on various major retailers to be humorously disappointing.
For example, I visited TigerDirect, which was one of the sites that Guidester PR had suggested I hit. The test I did was searching for Camcorders. The first question asked?without further context--if I preferred to have the best technology. Sure, who wouldn't? Suddenly, that single answer reduced my choices to two models. I then answered that I considered myself a "novice or intermediate camcorder user." Boom! The system had narrowed down my options to the one ideal camcorder already. Not bloody likely.
I then tried the same camcorder search on CompUSA, which was another suggested site courtesy of Guidester PR. (I mention that they recommended it so that you don't think I sought out the weakest of their retailers. These were their showcase retailers.)
CompUSA lets me get to a third question, but when I said that I wanted to be able to create high-definition video, it gave me a window that said it had zero products that matched and asked me if I wanted to undo my answer. If I then agree and lie about my answer, why would anyone expect it?s recommendations to be on-target?
Consumers only see this E-Commerce database on various retail sites and if their experience is as, well, nauseatingly awful as the camcorder searches were, wouldn't that start to weaken Guidester's brand reputation? When that question was posed to Chin, he said he wasn't concerned and pointed to surveys?from unspecified sources?that showed how happy consumers were after using Guidester on various retail sites.
That may be true, along the lines that someone in the 1960s would be very satisfied with a mainframe computer, as long as that person didn't know about far more attractive computing options. Consumers today are starved for the kind of product-selection-assistance info that Guidester is selling and they are happy for whatever help they can get. That doesn't mean they wouldn't be a lot happier with far more information.
Retail E-Commerce execs need to have a lot more respect for their customers and for themselves. They need to respect their customers by giving them full access to unbiased data about the widest range of products possible, in the way that many car Web sites provide extensive unbiased comparison information about rival cars.
The retail E-Commerce execs need to respect themselves by showing that they know that they consistently choose the top products to sell and that a full comprehensive product comparison database will show that to be true. They may not offer the best products every time, but by treating their customers as adults, they will win more sales.
Amazon.com is a great example. People know that they are offering the identical books (and other items) as elsewhere, usually for more money. What?s a key difference? One fascinating difference are customer comments about products, including many that are not flattering to those products.
A company less enlightened than Amazon would have said, "There's no way we're going to use our Web space to show comments that criticize the very products we're trying to sell." But Amazon knew that by being fully open and transparent, it would make them more credible and sales would result.
If you want to get cinematic, think of the lessons that Macy's learned in Miracle on 34th Street. As a practical matter, consumers will likely flock to the retailer that offers the full unabridged product database that Guidester offers. Enlightened self-interest can be a wonderful thing.