Decline of Online Comparison Shopping Business

Being in an ecommerce business with direct responsibilities for online pricing, I found the below article extremely interesting. The article cites a decline in comparison shopping engines, such as PriceGrabber, Shopping.com, NexTag and MySimon due to three main reasons: declining price gaps between retailers, a change in Google's search ranking, and Amazon. I think the Amazon portion of this phenomenon is what's truly driving the decline. Amazon has built incredible price perception and it is just assumed by consumers that they will have the lowest prices, similar to Walmart in brick and mortar retail. In addition to this being a challenge for other ecommerce businesses, it could have negative impacts to Google's search marketing revenue as customers elect to skip the Google search bar and head directly to Amazon.

Amazon and Google, not to mention Apple, are already locked in battle across a variety of businesses: eBooks, digital music and tablets to name a few. If Google starts to see a hit in search revenue due to Amazon, I imagine the competition will only get more intense.

http://allthingsd.com/20130531/beyond-price-comparison-shopping-2-0-is-about-customer-experience/?refcat=commerce

• Pricing strategies are producing diminishing returns as the price ranges across competing vendors shrink to insignificance — an effect of pervasive and readily accessible pricing information. The shopping engines are becoming a victim of their own success.
• Google has dramatically changed how it treats shopping engine URLs. Now assigned “low-value-add” status, they are relegated to search-engine wasteland (third page of search results or worse). Adding insult to injury, Google places its own “Google Shopping” results right up on the first page of any product search, further limiting traffic that otherwise might have gone to the independent comparison shopping search engines.
• Amazon has made a massive expansion into virtually every area of consumer goods, offering a huge selection, “good-enough” pricing, personalized shopping recommendations and top-notch convenience tools like Amazon Prime. This powerful combination ensures that customers often begin and end their virtual shopping trips on the Amazon site because leaving to find a slightly lower price is just too much trouble.