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March 15, 2005Interview with NexTag Co-Founder Rafael Ortiz at SES NYC
I also get the feeling that, as much as any other shopping comparison company, NexTag "gets" things like blogs and RSS. Although they have not done anything with these tools on the consumer side, their employees were among the earliest adopters of the Organized Shopping Blog. They also moved quickly before my last-minute trip to Search Engine Strategies in New York, as my press contact was able to arrange a meeting with Rafael Ortiz, Co-Founder and Vice President of Marketing, who was on the Meet The Shopping Search Engines panel. Despite only being in town for one day, battling icky weather, and having to prepare for his session later that afternoon, Rafael found time to answer some questions after lunch, even missing the first part of the Shopping Search Tactics session. Here are the highlights: + + + Q: NexTag has been expanding into a lot of new categories lately. How do you decide on which categories to enter? A: We simply look at what consumers are spending money on, and where we can add value. So if you look at a category that consumers spend money on online today, and you rank them on the total dollar spend, and then you look at whether comparison shopping engines can add value, that pretty much tells the story. So if you look at the top of the consumer discretionary spending online, you have travel products. Surprisingly, comparison shopping for travel is a relatively new category. So we look at travel, we look at financial services like people comparing rates for auto insurance. Five years from now, we won't be having this kind of conversation. It will be assumed that comparison shopping engines need to address these categories. Comparison shopping today, in some respects, is at the same point e-tail was five years ago, when people debated if Amazon should get into all these additional categories, when there were product specialists like eToys just focusing on toys. I think what the Web has really proven is, if you can add value to the process, it is relatively easy to expand into other categories, and it makes a lot of sense. Q: When I think of NexTag, I think of the price comparison features -- price graphs, price alerts, etc. Have you consciously focused more on price features, or is it something that just evolved? A: Our overall principle is to give more relevant information to shoppers to make a better decision. So when we think about buying things, what's the first thing you want to be able to do? Well, first of all, you want to be able to find the product you are interested in, so it goes without saying you want to find something easily, and you want to easily compare the different sellers and the prices of those products. The prices of those products, as we now know, don't end with the retail price. The true price ends once you understand how much you are going to pay in tax, if there is any tax, and how much you are going to pay in shipping. And it is useful to have some context in terms of what the historical price has been. We think that helps the shopper make a better informed position. There are also non-price attributes that we focus on. If you look closely at that price history chart, you'll see that we also track the popularity of the product, in terms of the number of clicks out to stores, so it gives buyers some idea of the popularity of the product that they are looking at. We think there are many price attributes we can provide to make it a more efficient process. If you think about markets that are more sophisticated than comparison shopping today -- Wall Street comes to mind -- if you think about how traders are buying commodities, they have a tremendous amount of information to help them make buying and selling decisions. It is really not that inconceivable that comparison shopping for consumers will get to that kind of evolved state. Is it there today? No. Do buyers need big trading screens showing them what the market is doing for an iPod? No, they don't. But if you just take the general premise that more relevant information at your fingertips makes you a better shopper, I think there is a lot the industry can do to improve that whole process. Price is certainly a part of it, but it does not end there. Q: How does seasonality relate to what you do as a comparison shopping engine? A: There was a time when we looked at Q4 as really the quarter, but because of the types of comparison shopping that we do today, our seasonality is not quite as dramatic as, I think, others in the category. If you look at Q1, the quarter we are in now, we actually have some categories that are at, or near, their seasonal peaks. Q1 for travel is a very large quarter, so we have a lot of people doing comparison shopping for hotels and flights. Comparison shopping for certain financial products, such as refinancing and loans, anything to help them save on their tax payments, is very big at that time. Of course, consumer product sales are at a low point now and will peak in Q4. In the second quarter and Q3, in the summer-time months, real estate comparison shopping -- finding realtors, buying homes, selling homes -- will be at its peak. So what we do is look at what functionality we need to deliver in those peak times. If you look at Q4, holiday shopping, we focus on scale, being able to bring in datafeeds from thousands of additional retailers. If you look at what we focus on in the summer-time, we will be focused on trying to connect shoppers with as many of the right real estate agents as possible. It really depends. Q: Everyone talks about traffic and how many unique visitors they had in December. What other metrics do you feel are important... i.e. number of advertisers?... A: The retailer count, I think, is a little misleading. It is generally better to say, the more retailers that you have, the better, and so I think there is a real arms race to claim that you have the most retailers. What it ignores is whether you are really helping shoppers to comparison shop for what they spend money on. If you look at consumer discretionary spending, the vast majority of people spend their money on travel products, consumer goods, houses, and autos. So, specifically, what companies in comparison shopping talk about today is, "we have ten thousand, twenty thousand, a hundred thousand, a billion retailers." But they are really only looking within a certain slice of comparison shopping, consumer goods. If you define it as all of the other categories, then you are talking about all the hotel providers, the travel agencies, banks, auto dealers, etc. You could have a ton of retailers that just sell digital cameras and sound like you have a comprehensive site. But does your comparison shopping site have thirty thousand auto dealers? Five thousand banks? All the hotel chains? So we need to be able to talk about the breadth of categories that are addressed. + + + see also:
Interview with NexTag Co-Founder Rafael Ortiz at SES NYC
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