Leslie Walker and Kamran Pourzanjani
.com Columnist and CEO of PriceGrabber
Thursday, June 9, 2005
2:00 PM
.Com columnist Leslie Walker hosted a discussion about comparison shopping with Kamran Pourzanjani , chief executive of
In her column , Leslie stated that Internet shopping guides like PriceGrabber are suddenly hot properties. E.W. Scripps Company is buying Shopzilla , a rival of PriceGrabber's, for $525 million. EBay recently said it would fork over $620 million for Shopping.com . Lowermybills.com recently went for $330 million.
Yet most Americans still don't use Web shopping guides, which let people see product prices from competing merchant in one place. So why are these sites suddenly worth big bucks?
How do they work, anyway? Will they still help consumers make truly independent comparisons after their new owners take control? For that matter, will any Web shopping guides be able to survive as standalone companies -- or will they all be gobbled up by big players eager to grab a share of Internet commerce?
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Leslie Walker: Hello to everyone and a big welcome to Kamran Pourzanjani. Thanks for joining us today. We will be starting in a few minutes, so send us your questions now.
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Leslie Walker: Hi Kamran. Let's start with what everybody has been asking me today. Why are giant companies like eBay and Scripps paying so much to buy Web shopping guides? Can't eBay do the same thing on its own, or couldn't Scripps create a similar site fairly easily?
Kamran Pourzanjani: Hi Leslie. Comparison shopping sites have become a key online service and is being embraced by millions of shoppers. Companies like eBay and Scripps are realizing the importance and potential of comparison shopping and want a piece of the action. In terms of re-creating the service, we have been perfecting comparison shopping since 1999 as have some of the other players. During this time, a lot of technology has been developed and a lot of retailers, partners and users. I do not believe that it is easy to replicate these relationships in short order.
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Leslie Walker: Is there anything about PriceGrabber.com that is truly different from the Web's many other comparison shopping sites? Some say you specialize in consumer electronics. True?
Kamran Pourzanjani: We believe that there are numerous differentiators. First and foremost, we have consistently focused on user experience and innovation. Therefore, accuracy and transparency rank very high with us. There have been a lot of round-ups in the space by media and consistently find more comprehensive and accurate results at our site. We also have features that are quite unique to us. For example, our Storefronts product allows individuals and small merchants without websites to be listed. We also have empowering features, such as Shopping List and Product Condition. For example, on PriceGrabber if you are buying an ink cartridge, you will know exactly whether the cartridge is refurbished, refilled or a compatible generic product. In regard to consumer electronics, we are quite strong in this area as that is where we started, but we are currently in 21 different channels. Our strategy from inception was to add one channel at a time and focus on creating the most empowering comparison shopping experience within each channel. In the past few months, we have introduced comparison shopping search for Travel and Autos, which we believe deliver a compelling comparison shopping experience for the user.
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San Bruno, CA: How do the price guides handle the variances in shipping and handling policies?
How do current price guides handle sites with different currencies, or are they typically more limited in geographic scope?
Kamran Pourzanjani: I am glad you brought this up. We actually introduced a feature six years ago called Bottom Line Pricing, which provides the user with sales tax and shipping information based on the user's zip code and where the merchant is located. Though this feature has been emulated, it is quite difficult to get right. In fact, in a recent Wall Street Journal survey of the comparison shopping space, the Journal found that PriceGrabber was the only site in the round-up that got this data right. For our UK site, we present prices in British Pounds, and for our Canadian site, we present prices in Canadian dollars.
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Manassas, VA: I hear that when shopping online you have to be careful of 2 things.
1. Selling items that are NOT brand new, and 2. Restocking fees.
Do shopping websites mention these things?
Also, are you really getting a good deal when you consider adding shipping and handling?
Kamran Pourzanjani: As stated previously, we go through great lengths to ensure that the product information is disclosed to the buyer. We think that this is very important and if any seller violates this requirement, we remove them from the site. We provide merchant information that highlights the seller's return policy. In terms of whether a deal is good or not, this is why we introduced the concept of the BottomLinePrice, so you are enabled to make the most informed decision. But, interestingly enough, often you find that informed buying online will result in great deals.
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Washington, D.C.: If you find a merchant you've never heard of through one of these guides, what guarantee is there that you'll receive the merchandise? And if you don't, what recourse do you have?
Kamran Pourzanjani: Over six years ago, we introduced user rating of merchants on our site so that people could benefit from the experience of others. We also police the merchants on our site and remove those who are less than scrupulous. With our Storefronts, we provide buyers with buyer protection insurance free-of-charge.
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Ashburn VA: As most onlines stores do price customization, do you think comparison-shopping sites give the true comparison ?
Leslie Walker: This is an excellent point. Many consumers aren't even aware that pricing can vary by customer on the Web, meaning merchants make different price offers to different customers for the same product. Kamran, how widespread do you think this practice is, and how does PriceGrabber deal with it?
Kamran Pourzanjani: We require our retailers to extend to our users the best prices that they offer on their websites. Also, given that we have 18 million monthly unique users, this tends to motivate retailers to present their best price given the competitiveness on the site with other retailers. One thing to note, by the way, is that we strictly require merchants to list the actual selling price excluding any manufacturer rebates, store coupons, etc. Some merchants on other comparison shopping sites will include a manufacturer rebate in their price to appear more competitive, and the user will see a higher price when they actually check-out on the retailer's website.
Leslie, in answer to your question, some merchants are trying to optimize pricing based on the user. However, this is why comparison shopping sites such as PriceGrabber add substantial value by presenting users with everything that they need to know to make the most informed purchase.
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Bethesda, MD: Where is the best place to find discount clothes online?
Leslie Walker: I doubt there is a "best place" because there are so many and tastes vary. But I like Bluefly.com, based in NYC and specializing in discount designer threads. For shoes, I like Zappos.com, though its prices aren't cheap. Kamran, any discount retailers come to mind?
Kamran Pourzanjani: The good news is that there are many clothing retailers online and this number is growing substantially, which was not the case a few years ago. You can find your favorite stores and go to them directly and check for deals or you can come to a site like ours where we present many products from many clothing retailers including BlueFly and Zappos. In general, what you want to do is to check for deals frequently as the places and prices change all the time.
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Los Angeles, CA: Given your status as a private company, how do you guys plan to compete with eBay, Yahoo, Google and other companies with sizable resources to become the hub of peoples' shopping needs?
Kamran Pourzanjani: We have actually been competing with large companies, including the ones that you mentioned, for a number of years. And we have continued to grow and thrive, because of our focus on innovation and user experience. We have built a loyal user base that has come to trust us with their purchase decision, and have helped us to grow through word-of-mouth over the years. Our users believe, as do I, that we have the best comparison shopping service and a track record of advocating the interests of shoppers. While some of our competitors are just now jumping on the bandwagon and have begun to shy away from pop-up advertising and use of spyware, we have NEVER utilized these tactics to drive revenues or growth at the expense of our users.
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Washington dc: What do you see as the "hot industries" in ecommerce?
Kamran Pourzanjani: If mergers and acquisitions is a barometer of what is "hot", then clearly based on last week's acquisitions, comparison shopping sizzles. Beyond that, we believe that any service that drives sales while providing a compelling service for the buyers and builds a community of loyal users will continue to thrive.
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Leslie Walker: Let's talk about the objectivity of Web shopping guides. Some of the Web's top comparison-shopping sites run silent auctions in the background in which Web retailers effectively bid for placement, stating how much they are willing to pay for each potential buyer who clicks on their ads. I know PriceGrabber has never done this, but others have, and don't do much disclosure on their sites.
Could this practice tarnish your industry as consumers start figuring it out?
Kamran Pourzanjani: Leslie, you are absolutely right -- we believe that this is a very bad practice and have never allowed such practices on PriceGrabber. We believe it to be against the interest of users on our site and counter-intuitive to why a shopper would want to use a comparison shopping service like ours. We believe that all listings should be transparent, clear and easy-to-understand. We fully disclose any advertising on our site to our users. Merchants cannot bid to show up higher on our list.
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Munich, Germany: As a sales and marketing professional, I was trained to guide the customer away from price issues and discuss the advantages of service and customer loyalty.
Seeing as how Internet shopping is an unstoppable force and comparison-shopping guides are becoming more prevalent, do you envision a consumer culture in the future that disregards vendor familiarity and focuses solely on price?
Leslie Walker: Personally, I don't consider the Internet that powerful, to strip retail all the way down to price alone. The Internet makes prices more transparent and is relentlessly pushing them down, but it's not the whole Web retail story. Consider Amazon.com. It illustrates how customer service remains important in electronic retailing. I often shop there because it is easy and convenient, even though I might save a few bucks if I took the trouble to hunt and peck on PriceGrabber or NexTag.
Kamran Pourzanjani: You will be happy to know that service and customer loyalty still have great impact. Price is certainly an important part of the purchase decision, however what we see on a daily basis is that our users often do not choose the retailers based on price alone. As an indication, you can imagine that if this was not the case, then only the lowest price seller would get all the sales - which is not the case. By the way, this is why we provide a significant amount of information beyond price, including information about the product (specifications, reviews, pictures, etc), as well as information about the seller and their offer (merchant rating, bottomlineprice, policies, etc) so that really the user is making the most informed value decision about what product they want to buy and who to buy it from.
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Leslie Walker:
San Francisco writes: San Francisco CA: If I'm shopping for a commodity (e.g. color printer), price is the deciding factor, and I don't care where I buy it, so I need a shopping service to search on my behalf. But if I find something particular that I like from an e-tailer, wouldn't I just skip the "search" step next time and go back to that particular site for personal items like clothing, decorative accessories, jewelry, etc.?
Leslie Walker: You make a good point, San Francisco. This is exactly why I shop a lot at Amazon.com. I know what they offer and that the price is relatively good. I want to buy those commodity goods with a few clicks as possible!
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KK London, UK: Do you think there is a business model to monetise price comparison sites on mobile technology? If so, how would you build the business model and why ?
Kamran Pourzanjani: We already provide our users with access to our site via WAP and PocketPC enabled devices - a service we've offered for several years. The business model is fairly similar, in that like a referral made from our website to a merchant's website, the user of our mobile application is connected via telephone to the merchant.
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Leslie Walker:
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Leslie Walker: We are running out of time and will be wrapping up momentarily. Thanks for the questions!
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Bethesda, MD: How much do merchants pay to get their items listed on PriceGrabber? Say I wanted to sell bicycle helmets online. What would I likely pay for each potential customer who clicked through from PriceGrabber to my Web site?
Kamran Pourzanjani: We provide sellers with two options for listing their products on PriceGrabber. For a merchant with a website, there is a referral fee (which varies depending on product category) for referrals made from PriceGrabber to the merchants website. The second option is through our Storefronts feature, whereby merchants/sellers that do not have websites can list their products for sale. The listing is free, however there is a nominal fee for completed transactions.
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Kamran Pourzanjani: We think that comparison shopping will continue to grow and become even more popular with shoppers. We fully intend to continue to be the consumers choice for comparison shopping and to empower shoppers to make the best purchase decision possible. As we have in the past, we will also continue to introduce new and innovative features as well as new categories.
Leslie, thank you for moderating this discussion. I've really enjoyed chatting with everyone and will hopefully have an opportunity to do so again in the future. Thank you.
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Leslie Walker: That's it for now. A big thanks Kamran Pourzanjani for joining us and taking your questions. Talk to everyone later!
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