Shoppers turn to net for bargains

London: Shopping online is nothing new, but a growing band of savvy consumers is tapping into a new breed of internet services to get the best deals on everything from washing machines to lingerie.

Cash-back sites and so-called aggregators, which compare prices at the click of a mouse, are delivering a major boost to online shopping traffic.

The merits of shopping online as opposed to the high street are bountiful: consumers' top 10 reasons for shopping over the internet include price competitiveness, more choice, avoiding crowds and ease of price comparison, according to a recent poll of 2,343 panel members of consumer group Which?

Cost savings can be substantial. Five popular items - a flat-screen TV, camera, camcorder, hi-fi and DVD recorder - can be snapped up online for more than £1,000 less than at high street retail outlets, according to Which?

Finding the cheapest prices has never been easier since the rise of the aggregators - Kelkoo.co.uk, Shopping.com and the like.

These sites attract millions of consumers with the promise of searching the market to find them the cheapest deals on everything from car insurance to gas and electricity.

Although their impartiality is questionable - many levy varying levels of commission for "click-throughs", applications, quotes or product sales, giving them a vested interest in plugging one provider over another - they take much of the legwork out of scouring the market.

Boom

Now, comparison portals for consumers goods and services - electrical items, clothing, even holidays - are experiencing a similar boom as shoppers recognise the growing capability of aggregators, which can save users 15 to 20 per cent on high street prices.

Kelkoo, owned by Yahoo and the largest online shopping aggregator in Europe, lists goods and services from 3,000 retailers, including Comet, John Lewis, Dixons, Argos, Next, Littlewoods, Dorothy Perkins and Burton to name a few.

It also lists "buy it now" prices from online auction giant eBay.co.uk and "new and used" prices from Amazon.co.uk.

Items are ranked based on how much commission Kelkoo receives from retailers, but users can opt for results to be sorted purely on price (which includes postage costs) or on the basis of other factors, such as popularity. Information is also available on returns policies and delivery options.

Its typical user is a "Middle Britain" 35 to 45-year-old professional and traffic hits a peak at around 4pm on Monday afternoons: smart shoppers are not only saving on cost, but are also freeing up their weekends for other pursuits, says managing director Bruce Fair.

Most commonly searched-for products include the Nintendo Wii games console, the Amy Winehouse Back to Black album and the iPhone. Although electronics command the largest slice of business, product searches in other areas - fashion, health and beauty, home and garden, and sport - have seen a marked increase over the past year.

"While there's a slowdown in consumer confidence, there's still a huge channel shift from people moving from offline purchasing to online purchasing," says Fair.

Internet sales accounted for just two per cent of total retail spending in 2002, but that figure is expected to rise to 40 per cent by 2020, according to a study conducted by price comparison service uSwitch.com, the Centre for Economics and Business Research and market research firm YouGov.

Retailers are all too aware of this potential - and are increasingly marketing their wares on the web.

Upturn

Consumers, too, are getting in on the action, profiting from the upturn in online sales via websites that reward online shoppers with cash-back.

"Retailers are seeing a trend of consumers who aren't really listening to their marketing messages on the television or through letterboxes," says Paul Nikkel, co-founder of cash-back Web site Quidco.

"With cash-back sites they meet them half-way by giving them some of the money they would have used to bug them by other marketing methods: it's a far more powerful way of marketing."

The website, launched almost three years ago, is believed to have been the first to give 100 per cent of its affiliate kick-back to consumers.

It lists products from 1,500 retailers, including Boots, Tesco and Debenhams, and users earn cash-back of between three and 15 per cent of the purchase price - anything from five pence for a bottle of washing-up liquid to more than £200 on a set of table and chairs - from which Quidco takes a £5 cut per year from each user.