Lengow’s Feed-Management Tool allows e-merchants to quickly and easily index their products catalogue on any e-commerce channels in the world : shopbots, marketplaces… As a matter of fact, once our clients’ product feeds are sent through these channels, they just have to optimize the feed daily in order to keep it up to date and improve their products’ SEO.

Marketplaces and Shopbot are the most commonly used e-commerce channels but have a completely different business model.

Some useful reminders:

The source feed is the file which links the merchant’s catalogue to the channels’ database. The feed includes all the required information related to the product sold : name, description, size, color, price, delivery, shipping costs, etc.

Shopbots provide customers with a list of classified offers sorted by ascending prices.  If a visitor clicks on one of the offers on the list he will be redirected to the merchant’s website. With shopbots, the transaction is processed on the merchant’s website. E-retailers pay shopbots on a CPC-basis which means that every time someone clicks on its offer the merchant will pay the shopbot a small commission for bringing in a visitor on its website. The commission depends on the product category and can vary from 0.10 up to 0.50 cts per click.

Note: although some shopbot will take a percentage on the final amount of the sale there are very few shopbots that still work that way.

Marketplaces provide visitors with a list of offers from multiple sellers. As opposed to shopbots, marketplaces take care of the entire buying experience. Thus, visitors are never redirected to the merchant’s website. As a result, marketplaces make money based on their third-party sellers’ performance (CPA) by charging a percentage (usually from 8 to 15%) of the final amount of the sale.

As a matter of fact, marketplaces’ commission rates can be more expensive than shopbots’s CPC ; however marketplaces offers a no-sale no-fee basis where sales are guaranteed. Whereas with shopbots, you will pay a few cents/click to attract new visitors on your website that you will still have to convert into clients. This traffic acquisition technique is much more random and can be even more expensive in the long run if your conversion rate is too low. Remember: take a moment to think about it before!

e.g. If your conversion rate reaches 2% (that means for 100 visitors on your website only 2 of them will actually buy something) your customer acquisition cost (called CAC) will be 50 times your cost per click (CPC) because on average,  you need to acquire 50 visitors to sell once.

Carefully optimizing your product feed is highly recommended for any e-commerce channels you choose.

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Google Shopping, the free comparison shopping engine of Google is about to evolve and to become a paid-for service from February 2013 in several countries including the United Kingdom, France, Japan, Italy, Spain, Netherlands, Brazil, Australia and Switzerland.  Already effective in the USA since last October, the new commercial model of Google Shopping will entail some adjustments for UK merchants.

This major change involves some adjustments for retailers who want to sell on Google Shopping. This change will begin on February 13^th and the transition will be completely effective by the end of Q2 2013. Even if it is progressive for retailers, it is important to get ready now to be operational on D-Day to offer the best experience possible to shoppers.

File layout

Like every CSE, Google asks for a specific layout for the integration of a merchant’s products within its engine. Even if this layout won’t change much, some changes remain (http://support.google.com/merchants/bin/answer.py?hl=en-GB&hlrm=en-GB&answer=2886491#FR). That’s why Lengow’s teams will ensure these modifications are integrated in the solution to make each feed adapted to Google’s expectations.

From a free model to a CPC model

The free model will be over from February 13^th. Google is becoming a paid-for service. Based on CPC bidding, merchants will manage their CPC campaigns product by product. The CPC will be directly controlled from the merchant center account and, in the short run, directly from Lengow via Google APIs.

This CPC will determine the indexing of retailer’s offers. It is therefore necessary to efficiently create campaigns and index bids.

Change of the management interface

With the new format, merchants will be able to manage their ads in AdWords (creating an AdWords account is necessary) while controlling information about their products via a Google Merchant Center account.  On the one hand, the management of campaigns and CPC will be done via the merchants’ Google Adwords account, as well as SEM campaigns. On the other hand, the product catalogue will be indexed via a Google Merchant Center account.

A new ads interface

Google wants to make the products results more obvious within its engine. The new commercial model of Google Shopping will consequently be based on Product Listing Ads.

With this PLA format, merchants will be charged on a Cost Per Action basis, they only pay for conversions. This means that e-retailers are therefore charged only if a shopper clicks on their ad and lands on their website: they only pay when Google directs a customer to their store*.

A thorough monitoring of campaigns will be necessary

Google makes its products search service change into a CPC model managed via Google Adwords. The search engine has demonstrated its ability to generate a lot of traffic for merchants. But from now on, it is necessary to efficiently control product indexing and campaigns to avoid high costs.

The consequences of such a change imply an increased workload for merchants who will have to spend time optimising their feeds. They have to make sure that their products feeds are working efficiently and are up-to-date. Indeed, the PLA format requires the most complete and relevant product information possible. But feed optimisations might quickly become a tedious and time-consuming task. That’s why Lengow supports online merchants in the Google Shopping transition thanks to the optimisation of their feeds and the indexing of their product catalogues on the CSE. Lengow provides merchants with highly optimised feeds and helps them provide shoppers with the most relevant offers on Google Shopping.

If you want to sell on Google Shopping and benefit from an efficient solution that optimises your ads and allows you to target the right audience and convert, then contact the Lengow UK team at for further information.

 

*Source: Google

 

Comparison Shopping Engines (CSEs) have been present on the net for nearly 10 years and allow consumers to look for, compare and buy products at the best possible prices.

Dealing with these CSEs, which have various functions and different business models, can quickly become an overwhelming task. Here are a few tips on the best ways to choose a comparison shopping site on which to reference your products.

How CSEs Work

A comparison shopping site is a service which allows consumers to compare the prices of several products on the Internet.

Comparison shopping sites index products, which have been sent through by retailers, in order to display listings of the best prices of each product sought by a consumer.

CSEs generally benefit from substantial traffic, notably due to developed natural indexing which ensures a better visibility of merchants’ products. Thanks to this exposure, listing on comparison shopping sites has become an essential strategy for online retailers.

In order to distribute your products on CSEs, you must send them through your product catalogue, generally in CSV, TXT or XML format. The catalogue will then be automatically integrated by the CSE on a daily basis. Once the feed has been submitted, the retailer’s job is done.

In order for your product information to stand out as much as possible, it is important to include all basic information in your product catalogue: Title, Category, Price, Shipping costs, Image, URL and Availability.

For some categories, it is also necessary to add the EAN or MPN codes of your products. This type of information can be very important – the more information you include on your products, the more online shoppers will be interested in buying them.

The Different Business Models

There are currently 3 different business models which exist for CSEs, the most common of which is the PPC model (pay per click).

PPC – Pay per Click

PPC is the most popular business model today and is used by the majority of comparison shopping sites. It is a relatively simple model, where the retailer pays for each click carried out on the comparison shopping site which then redirects the consumer to your online shop.

For example, if an online shopper clicks on a product on a CSE and is then redirected to the retailer’s website, the retailer will pay £0.16 for instance, whether or not a purchase is made.

The average CPC (cost per click) which we have noticed is £0.19. This rate may vary depending on the product category. The cost tends to be higher for High-Tech products or holiday packages, for instance, than for niche markets such as electrical fans.

This CPC may seem high, but it is much lower than that of other e-marketing channels, such as sponsored links. If their campaigns are managed correctly, CSEs can become very profitable channels for online retailers.

CPA – Cost per Acquisition

There is also another model, derived from the one often used by most affiliate networks: CPA (percentage of turnover generated).

Each time a shopper visits an online retailer’s website from a comparison shopping site and then makes a purchase, a percentage of the turnover is given to the CSE.

This model has the advantage of being relatively risk-free for retailers, as they only pay the comparison shopping site if a sale is generated.

Free

The recent launch of a new free CSE has been extremely successful.

Google has put itself back on the CSE market with the launch of Google Shopping (or Google Product Search).
The advantage of this new comparison shopping site is that it is completely free for retailers. You can distribute your product catalogue without any costs involved.

How to choose the right CSE for your products

There are many comparison shopping sites in every country around the world, and it is important to carefully select the ones you would like to target. Here are a few criteria to take into account.

Budget

It is essential to set your monthly CSE budget per channel, as this budget can vary from one comparison shopping site to another. Big CSEs attract a lot of traffic and can thereby generate a significant number of clicks. As these clicks have a cost, the monthly budget can rapidly increase relative to the traffic.

Target

There are general comparison shopping sites where you can distribute any type of product without any worries, but there are also specialized CSEs as well.

These sites are specialized in a particular sector and have developed significantly in the past few years. They can be interesting to use for certain types of retailers.

It is therefore necessary to target these specialized CSEs so as to avoid selling your “fashion & beauty” products sites specialized in “gardening & DIY.”

The Importance of Optimization

Each comparison shopping site has its own algorithm, its own Quality Score which is important to know and to assimilate in order to index your products correctly.

As it is the case for SEO or SEM, it is essential to optimize your product information content correctly in order to stand out on each CSE.

Each product must have as much detailed information as possible to make it stand out: the availability, the shipping costs, the title, the photo and finally the price must be as accurate and reliable as possible.

Always Measure Your Profitability

It is essential to measure your ROI when distributing your products on comparison shopping sites. Like all PPC models, managing your budget and tracking your ROI is the only guarantee of a successful campaign.

Each retailer has his own way of calculating his ROI in relation to different factors.
It is essential to follow your campaigns carefully in order to identify the channels, categories or even the products which may impact your total profitability.

A daily automatic or manual follow-up is important in order to be able to deactivate products which have a poor conversion rate or profitability, if necessary.
This will allow you to save money and even make additional profit each month. Why leave products which will never sell on a comparison shopping site if they are costing you hundreds of Pounds in terms of clicks?

Conclusion

CSEs represent a sizeable channel which enables you to reach a wide audience. With effective optimization and traffic follow-up, you can take advantage of an important and profitable distribution channel!