Comparison sites 'hurting' retailers
Bricks and mortar retailers say popular price comparison websites are making competition for the consumer dollar tougher.
Price aggregator websites such as PriceSpy and PriceMe collect information from a variety of retailers to allow consumers to quickly and easily compare prices for a range of products.
The model has been around overseas for over a decade, but has only taken off in New Zealand in the last few years as retailers put greater emphasis on their online sales.
PriceMe had seen a doubling in visitor numbers year-on-year since its launch in 2007, marketing director and co-owner Chris Palmer said.
"We're up to 700,000 visits per month now. We expect to reach one million this December."
With no mainstream advertising, the company had relied on word of mouth to attract users.
He was aware of the perception that aggregators were increasing competition among retailers.
"Shoppers are really using it as a lever to bring prices down, but it really isn't our intention. We try to emphasise a wide range of information about retailers."
Coriolis Research director Tim Morris said New Zealand was still catching up in terms of online shopping, but that the model was one that appealed to consumers.
"New Zealanders have always loved a bargain and these sites offer just that."
By providing all the necessary information to consumers, the sites were making the market more efficient, he said.
"Fifteen years ago, if you wanted to buy something you would go down to your local Harvey Norman or Dick Smith and walk between shops. Now you just hop onto one of these aggregators and it's all there."
Prices were becoming more transparent, which meant consumers were making more informed decisions, he said.
"Sometimes the price differentials are astronomical, sometimes 50 per cent cheaper."
Director of independent Wellington-based computer retailer Atech Computers, Kidd Liang, thought price aggregators had made it difficult for physical retail shops to compete.
"People will just find things online and then buy them from shops based in Auckland. It is really killing the local retailer."
He said bricks and mortar retailers could offer better customer service and reliability about products, but retailers no longer had a choice about their online presence. "Everybody has to be online now."
Betta Electrical Group general manager Grant Sheridan said the sites were hurting retailers. "It has really made it a race to the bottom in terms of prices."
Sheridan said the aggregators placed emphasis entirely on lowest prices and forced retailers to drop their margins to top the lists. "It's just not sustainable for retailers."
Pricespy.co.nz and priceme.co.nz both collect data from retail websites and allow free access to users. PriceMe allows retailers to remove themselves from their comparison lists, while retailers have reported that PriceSpy refuses to do so.
Pricespy was unavailable for comment at the time of writing.