Price Comparison Tools

>> Hi. Let's talk about price comparison tools. 

For many customers, price is an important consideration when making a purchase. It is one of the most visible characteristics of a product and is especially important for expensive products, such as appliances, furniture, and automobiles, in which prices can vary substantially from one retailer to another. 

As we discussed earlier, before the rise of digital tools, the price of a product was often not known until the consumer was actually at the retail location and saw the price on the shelf. 

The Internet changed all of this by making prices much more visible and by allowing customers to see the price of a product before entering a store. 

Today, customers have even more power, as there are now a number of price comparison tools that allow customers the ease to compare prices across a number of retailers, both physical and also online. Many of these tools are also available on a mobile platform. So customers cannot online compare prices before going to a store, they can also compare prices while shopping at a store. Here are some examples of some popular price comparison tools. 

First of all, Google Shopping. 

This is the world's largest and most comprehensive price comparison tool. 

Users just type in the name of a product and a list of competing retailers appears. 

Although the focus is on the prices offered by various online retailers, there is usually some price information about a few local, physical retailers. 

In addition to prices, this website also provides user reviews of these various retailers as well as reviews of the product itself. 

This tool is available in about 25 different countries, including the US, India, Russia, and Brazil. Second, the second example is a price search tool called PriceBaba. 

This price tool is based in India and focuses on helping customers find the lowest price for mobile phones in various Indian cities. 

In addition to focusing on a single product category, this tool also focuses on making price comparisons for physical stores because only a small percentage of Indian consumers actually shop online. The third example is called Red Laser. This price comparison tool is designed specifically for mobile devices and is available for a free download on all of the major smartphone platforms. This portable tool allows in-store shoppers to obtain comparison prices for a wide variety of products by simply scanning the barcode using the app's built-in scanner. Within a few seconds, prices of competing retailers, both online and also physical, appear on your phone's screen. We'll discuss Red Laser in more detail as parts of our hands-on exercise for this module. 

Now that we have some examples, let's define what this concept really is. 

A price comparison tool is essentially a digital platform that provides shoppers with the ability to easily compare prices across a set of retailers that can be both online as well as physical retailers. Some price comparison tools focus on a single product category while others cover a much wider range of products. 

These tools are typically free to use and are increasingly becoming more common on mobile devices, such as smartphones. Now that we have the definition, let's take a bit of a deeper dive into some interesting questions. There are lots of questions we could ask about price comparison tools. I want to focus on three basic questions. 

First of all, what features do these tools typically offer? 

Well, nearly all price comparison tools offer information about comparative prices across a number of retailers, again, both physical and online. 

In addition, many provide information about shipping costs, retailer and their product reviews, and also provide a set of product photos so you can see what the product looks like. Thus, these tools contain a substantial amount of useful information. 

Second, how do they work? 

Nearly all price comparison tools are free to use. They usually earn money through advertising. 

In addition, many of these tools, such as Google Shopping, vendors pay a fee to have their products listed. Most of these tools are quite easy to use. You just simply type in the name of a product or scan a product using its barcode. 

The price data for these sites can come from a variety of different sources, including information supplied by retailers, a scanning of a retailer's web page, or through crowd sourcing in which users submit price information to the website. Our third question, do these tools really save customers money? That's a good question. 

Well, the limited research that has been done thus far suggest that, on average, customers who use these tools pay somewhat lower prices than those who don't. 

However, research has also found that none of these tools are perfect. 

All of them contain a fairly large number of errors, such as incorrectly listed prices. 

Also, the price that is featured on these tools may not actually be the lowest price. So the customers should exercise caution when using them.