Thursday, April 5, 2001

Portals and Affiliate Programs to Thrive

Forrester Research, Inc. predicts an imminent shakeout of shopping intermediaries -- sites that aggregate online merchant listings and products. Surviving intermediaries will evolve into eCommerce brokers that will generate 48% of online sales by 2005. Instead of offering shoppers little more than a list of links and a passive handoff to retailers, eCommerce brokers will take a more active role in online sales. They will support the marketing, merchandising, and customer service activities of merchants and guide customers through the buying process.

For the Report "eCommerce Brokers Arrive," Forrester interviewed 50 retailers about their relationships with portals, comparison-shopping engines, niche content sites, affiliate programs, and networks that run affiliate programs. "Retailers are too complacent, wasting time and money on partnerships with comparison-shopping and niche content sites that have no future," said Forrester Analyst Carrie A. Johnson. "There is a disconnect between what shoppers want and what retailers and intermediary sites deliver. Consumers want products, not content."

Online consumers head straight to the sources they know and trust when shopping: retailers and manufacturers; few bother with intermediary sites like mySimon.com. Retailers are also choosing the wrong partners to assist consumers throughout the buying process. "They must pick partners that have the scale, service, and speed needed to innovate for consumers. Comparison-shopping engines, product-review sites, and portal wannabes don't have what it takes, but affiliate programs and major portals like AOL, MSN, and Yahoo! do," said Johnson.

By 2005, portals will evolve into eCommerce brokers, which will provide a selling platform for retailers by enabling merchants to reach, convert, and provide service to more customers. They will also empower consumers with features and services to help consumers find and buy products by creating a one-stop-shopping experience with a complete set of integrated resources.

eCommerce brokers will help retailers anticipate customer behavior by mining user data from a network of sites. This will give retailers a broader view of future consumer buying behavior than they can realize on their own. It will allow retailers to fit the right product to the right person. For consumers, eCommerce brokers will provide service throughout the buying cycle with tools like comparison-shopping engines, merchant ratings, and wallets that are accepted at all of their partner merchants.