Comparison Shopping - Definition, Importance & Example
What is Comparison Shopping?
Comparison shopping is the concept of comparing a product’s price, attributes, quality etc. with its peer brands before actually buying that product. The idea of comparison shopping includes researching about the product and comparing it with multiple peer brands on both online platform and brick and mortar stores to get the maximum value from a product at lowest possible price.
Importance of Comparison Shopping
Comparison shopping is now available through several channels where a consumer can gain information about any product/service he/she wishes to buy. There are the traditional newspaper advertisements, TV advertisements, friends/family reviews and modern methods including internet searches or experiencing the quality in virtual reality. Internet provides an excellent platform for comparison shoppers for pre purchase information about any product and thus has given rise to many companies which do not sell the actual products rather provides comparison platform to host multiple vendors and provide a comprehensive comparison between multiple products/services.
Customers looking for comparison shopping look for the following attributes for comparison.
1. Price & Brand
2. Qualitative Description
3. Technical Specifications
4. User Ratings & Feedback
5. Offers & Discounts
6. Time & Delivery
7. Return Policies
8. Payment Methods
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Examples of Comparison Shopping
Some examples of comparison shopping platforms are:
1. Trivago: This website provides a platform for various hotel booking vendors to advertise their offerings and at the same time it helps the consumers to browse through multiple options without actually visiting the individual vendor websites.
2. PolicyBazaar: A similar type of a web based company which provides detailed information about several financial products from different vendors.
Comparison shopping need not necessarily be on the online or web based mode. It is also largely done in the physical stores where actual order is made. Companies can use this ideology of comparison shopping to carefully place their brands in such a way that it highlights the differentiating factors as compared to the competitor brands.
Advantages of Comparison Shopping
There are several advantages of rising consumer awareness such as transparency in the system of purchasing and selling.
1. Comparison shopping empowers consumers to derive the best value for their money.
2. Predicts buying behavior of consumers using data mining and provides opportunities for new companies to produce the products by identifying gaps in consumer demand and available attributes.
3. Help in predicting the demand for products/services.
4. Making targeted advertisements for the consumers.
5. Comparison shopping provides valuable feedback platform and peer review.
But at the same time it is proving as a disadvantage for the physical retail stores. Earlier if a potential consumer entered a store to either buy or compare a product; it was highly likely that a purchase would be done either by impulse buying or through sales persons. The online platform has pulled this arena from the retail stores. Also in the online comparison shopping the consumer cannot actually feel the features of any product and focuses only on mentioned reviews and prices whereas in retail stores the features of a particular product can be experienced in reality.
Hence, this concludes the definition of Comparison Shopping along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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