The internet has given us access to an almost limitless amount of information, but as consumers we need the tools to filter that information into something that’s useful for us. This is what has driven the rise in popularity of comparison websites, which now dominate not only search engine results pages but also the ad breaks on TV, which are rarely free from meerkats, opera singers, Skeletor, James Corden and other things that drive us to distraction.
Comparison websites have been around almost as long as eCommerce has existed, with the first going online in 1995. It was called BargainFinder and was followed by others like Jango, Junglee and NexTag, which started in 1999 and is one of the oldest comparison sites still in use.
The popularity of comparison sites – and the number of them in existence – has exploded in recent years, making it possible to get a price comparison for almost any kind of transaction you might be planning to take, whether it’s booking a hotel, buying car insurance or simply working out which supermarket you need to go to in order to get the cheapest chicken.
Price wars at the supermarkets
The weekly food shop is something that we all have to do, and the price of it has been rising sharply in the last 12 months because of increasing food prices. In April 2017 it was revealed that the cost of an average household shopping bill had gone up by £21.31 since the start of the year, while spending on food being sold in promotions had fallen to an 11-year low as supermarkets look to tempt us with lower regular prices rather than one-off eye-catching deals.
Sainsbury’s kickstarted this move last year when it announced that it would phase out ‘buy one get one free’ deals. Food commercial director Paul Mills-Hicks said: “Customer shopping habits have changed significantly in recent years, with people shopping more frequently, often seeking to buy what they need at that moment. Our customers have told us that multi-buy promotions don’t meet their shopping needs today, are often confusing and create challenges at home in terms of storage and waste.”
This change in buying habits shows that consumers are getting smarter and thinking more about where they can get the most shopping done for their money. Some of this comes from increased awareness and media coverage about wastage and the kinds of tricks that supermarkets use to part us from our cash, but the rise of supermarket comparison websites at this time is clearly another factor.
Compare the supermarket
We’re increasingly savvy shoppers and are also turning to the internet to do our big shop more frequently, with Mintel predicting UK online grocery spend for 2017 to be £11.1 billion, up from £9.6 billion last year. Some of that may be down to the prices, but the appeal of supermarket shopping in your pyjamas is clear, especially when it comes to peak times, while the arrival of Amazon into the market and Tesco’s new same-day delivery option are only likely to increase the popularity of the online option.
Another advantage of staying at home is the ability to be more strategic about your shopping, taking your time to do the research needed to make sure you are getting the best value. This is where supermarket comparison sites like mySupermarket come into the picture. mySupermarket has been around since 2006 and offers comparisons of Tesco, Asda, Waitrose, Ocado, Aldi, Morrisons, Iceland, M&S and Sainsbury’s.
It even goes further than that for some products, offering prices from Superdrug, Boots, Amazon, Poundland and Poundstretcher and its headline promise is that you can compare and save 30% on your shopping on its website or app. Its ubiquity is such that an online search for ‘cheapest chicken’ (or almost any other staple grocery product) brings up mySupermarket before any actual supermarket website.
The problem with this situation for the supermarkets themselves is clear. They rely on their customers being loyal and buying everything they need from that one place; that is the whole purpose of a supermarket and a driving force behind recent ad campaigns. It’s in their interest for customers to use their websites to do their shopping as that’s where they can do as much upselling as possible and of course not be tempted away by a cheaper basket of products.
So the challenge in terms of search rankings is clear. Not only are the supermarkets competing against each other in key grocery search terms, they are also competing against the comparison sites. This doesn’t necessarily mean simply outspending them on advertising, it also means being smarter about how the money is spent, using a reactive approach to trigger the right spend at the right time from the right audience.
Comparison in the supermarkets
Another factor to take into consideration with the rise of supermarket comparison sites is that people aren’t just using them in the comfort of their own homes. mySupermarket and its competitors have apps and mobile sites that allow consumers to perform online comparisons whilst doing their offline shopping. This is a kind of ‘showrooming’ and means that you can be in Sainsbury’s intending to buy some camembert and can check to see if it’s going to be cheaper at Tesco.
This could be enough to make you decide to abandon your whole shop at Sainsbury’s, so it puts a lot of power literally in the palms of consumers’ hands. Not all customers would make this effort, but enough are doing so to make the retailers think of ways to fight back. Data works both ways and supermarkets have been gathering our data for years through Nectar points and Clubcards and they could be close to using that data to determine how much we pay for our shopping.
A few years ago, B&Q trialled electronic price tags that changed depending on data gathered from customers’ mobile phones, advertising this as a way of rewarding loyal customers. While that didn’t catch on, electronic tags are becoming more common in France and Scandinavia. The days of ‘surge pricing’ in our supermarkets are still a possible rather than probable future, but the retail giants will be looking at all options to claw back some of the power from us.
For now though, supermarket comparison sites are making it easier for consumers to avoid falling for the usual tricks and tactics of the retailers. The supermarkets themselves will be monitoring the impact this is having on them and you can bet they will react if it is clearly having a negative effect. For now, the only obvious sign may be an escalation of the war for paid grocery search rankings, so supermarkets need to do what they can to gain an edge.
What do you think of supermarket comparison sites, and what can stores do to counter their influence? Let us know on social media @mporiumgroup.