Bagging bargains

Shopping online is nothing new, but a growing band of savvy consumers are tapping into a new breed of Internet services to get the best deals on everything from washing machines to lingerie.

Cash-back sites and so-called aggregators, which compare prices at the click of a mouse, are delivering a major boost to online shopping traffic.

The relative merits of shopping online as opposed to the high street are bountiful: consumers' top 10 reasons for shopping over the Internet include price competitiveness, more choice, avoiding crowds and ease of price comparison, according to a recent poll of 2,343 panel members of consumer group, Which?

Cost savings can be substantial. Five popular items - a flat-screen television, camera, camcorder, hi-fi and DVD recorder - can be snapped up online for more than 1,000 pounds less than at high street retail outlets, according to Which?

Finding the cheapest prices has never been easier since the rise of the aggregators - Kelkoo.co.uk, Shopping.com, Pricerunner.co.uk and the like.

These sites attract millions of consumers with the promise of searching the market to find them the cheapest deals on everything from car insurance to gas and electricity.

Although their impartiality is questionable - many levy varying levels of commission for "click-throughs", applications, quotes or product sales, giving them a vested interest in plugging one provider over another - they take much of the legwork out of scouring the market.

Now, comparison portals for consumers goods and services - electrical items, clothing, even holidays - is experiencing a similar boom as shoppers recognize the growing capability of aggregators, which can save users 15 to 20 percent on high street prices.

Kelkoo, owned by Yahoo and the largest online shopping aggregator in Europe, lists goods and services from 3,000 retailers, including Comet, John Lewis, Dixons, Argos, Next, Littlewoods, Dorothy Perkins and Burton to name a few.

It also lists "buy it now" prices from online auction giant eBay.co.uk and "new and used" prices from Amazon.co.uk.

Items are ranked based on how much commission Kelkoo receives from retailers, but users can opt for results to be sorted purely on price (which includes postage costs) or on the basis of other factors, such as popularity. Information is also available on returns policies and delivery options.

Its typical user is a "Middle Britain" 35 to 45-year-old professional and traffic hits a peak at around 4pm on Monday afternoons: smart shoppers are not only saving on cost, but are also freeing up their weekends for other pursuits, says managing director Bruce Fair.

Most commonly searched-for products include the Nintendo Wii games console, the Amy Winehouse "Back to Black" album and the Apple iPhone. Although electronics command the largest slice of business, product searches in other areas - fashion, health and beauty, home and garden, and sport - have seen a marked increase over the past year.

"While there's a slowdown in consumer confidence, there's still a huge channel shift from people moving from offline purchasing to online purchasing," says Fair.

Internet sales accounted for just 2 percent of total retail spending in 2002, but that figure is expected to rise to 40 percent by 2020, according to a study conducted by price comparison service uSwitch.com, the Centre for Economics and Business Research and market research firm YouGov.

Retailers are all too aware of this potential - and are increasingly marketing their wares on the worldwide Web.

Consumers, too, are getting in on the action, profiting from the upturn in online sales via websites that reward online shoppers with cash-back.

"Retailers are seeing a trend of consumers who aren't really listening to their marketing messages on the television or through letterboxes," says Paul Nikkel, co-founder of cash-back Web site Quidco.

"With cash-back sites they meet them half-way by giving them some of the money they would have used to bug them by other marketing methods: it's a far more powerful way of marketing."

The Website, launched almost three years ago, is believed to have been the first to give 100 percent of its affiliate kick-back to consumers.

It lists products from 1,500 retailers, including Boots, Tesco and Debenhams, and users earn cash-back of between three and 15 percent of the purchase price - anything from 5 pence for a bottle of washing-up liquid to more than 200 pounds on a set of table and chairs - from which Quidco takes a five pound cut per year from each user.

Cash-back totaling 681 pounds can be amassed on a random sample of 50 products and services used to measure inflation via the retail price index - the equivalent of a 10 percent saving, it says.

Since its formation, there has been an explosion in cash-back sites, and online shoppers now have around 80 to choose from in the UK. Others include Cashbackkings.com, Greasypalm.co.uk, Giveortake.com and Topcashback.co.uk.

"We brought together a group of like-minded people who said: 'Lets tap into this commission that gets paid to other sites and access it for ourselves," says Nikkel.

"It's still niche, but is becoming extremely popular. People are becoming more aware right now of the credit crunch and I think they're increasingly looking at how they can maximise the value of their transactions."

Over the Christmas period, some 165,000 people received cash back via the site, netting a collective 2.7 million pounds.

"You don't always earn a great deal, but it soon adds up," says member Carrie Hoffman, from Chelmsford in Essex.

Agencies

(China Daily 05/03/2008 page11)