Bots Can Dominate E-Commerce, if They Don’t Bungle

What could be a more welcome antidote to the vast chaos of electronic commerce than the “shopping bot”? Those robotic software agents can instantly compare prices for thousands of items on hundreds of sites--a consumer’s friend if ever there was one.

And if bot makers are smart, this is just the beginning. To your benefit and mine, bots could supplant Amazon.com and other leading online merchants as the kings of e-commerce. (Auction leader EBay, cognizant of this prospect, recently threatened to block auction bot AuctionWatch.com from searching its site.)

Before I explain how such a shift could come about, consider why bot makers appear more likely to botch one of the biggest e-commerce opportunities imaginable.

For a Web tool that’s been around close to two years--an Internet eternity--it’s hard to imagine a clunkier, less reliable example. Search results range from wild overreaching (Excite’s bot yielded 169 choices for “iMac,” most of marginal relevance) to pathetic inadequacy (Lycos couldn’t locate a single Apple desktop computer for sale).

Better results can be found by braving often-imponderable instructions for refining search terms. But if a reasonably experienced user like me takes 10 minutes to coax out a usable result, e-commerce neophytes would be lost.

And blatant conflicts of interest don’t inspire confidence. For example, in the Lycos search layout, the only obvious place for a keyword search for books turns out to peruse only Barnes&Noble.com;, a prime advertiser.

At best cumbersome, most shopping bots cover the spectrum between unusable and untrustworthy.

This is doubly frustrating because reliable, easy bots could reshape the contours of Web commerce for the better.

Right now, bots specialize in simple price comparisons, which tend to drive prices down and steer commodity buyers to e-tailers that can live on narrow profit margins.

“Why should I reward the inefficiency of a small retail store unless it provides special services?” said Jeffrey Tarter, editor of the industry newsletter Soft-letter.

Of course, the threat of homogenization is considered a primary evil of the Goliath merchandisers in the physical world. And the Wal-Martization of the Web does sound ominous, until you consider how often people pay too much for mainstream products from vendors that deliver lousy service.

This suggests shopping bots’ true potential: a way to force online merchants to compete aggressively on service and fulfillment. To play that role, bots will have to change from simple-minded penny-pinchers into engines of consumer advocacy.

Step 1 in the transformation: Provide real price comparisons, including tax, shipping and handling, which often turn a good deal into a poor one.

Bertelsmann’s DealPilot.com, which tracks books and CDs, is the first to offer such comparisons. The service also determines the lowest price on an overall order of several items. For example, a consumer might opt to pay slightly more for three books from a single seller, instead of buying each singly from different merchants, because lower mailing costs offset that premium.

Gus Venditto, editor in chief of Internet.com, which produces the Botspot.com Web site that tracks industry developments, remains skeptical that DealPilot always calculates such costs accurately. But in the long run, he expects all the successful bots to offer such comparisons reliably.

DealPilot searches also allow a high degree of specificity--a customer can narrow the search to, say, the English-language hardcover edition of a given book--thereby eliminating scores of irrelevant listings.

A search on DealPilot for “The Grapes of Wrath” displayed the 14 best offers for the Steinbeck classic. Compare that with a try on the “books” category on Excite Shopping, which delivered more than 250 results, including vitamins derived from grape-seed extract.

Step 2 for the shopping bots will involve a more difficult task in gaining consumer trust: assessing quality, not just price.

A few bots link to online reviews, but as with other aspects of the shopping process, the links can be hard to follow and the volume of data quickly overwhelms.

BizRate.com already compiles ratings of Web merchants. So why not attach such ratings--and ultimately, a compilation of product reviews--for every search in an easily digestible, at-a-glance format?

That approach is coming.

“Expect to see merchant ratings added to the shopping bot categories, as well as product reviews,” said Ken Cassar, a bot expert with Jupiter Communications.

Step 3--admittedly a more difficult one--will be to add “e-wallet” functions that handle credit and shipping information so that customers can avoid the maddening process of entering that data for each merchant.

To be sure, the likes of Microsoft Corp. and VeriSign, a leader in Web security schemes, have failed to create a universal e-wallet acceptable to merchants and trusted by consumers, Venditto points out. But Yahoo and others have already put limited wallet systems in place for selected merchants, and universality may not be a prerequisite for success.

Ultimately, this combination--reliable search tools, realistic price comparisons, guidance on product and merchant quality, and universal order processing--offers such compelling advantages that the portals and independents that operate bots will surely go for it.

If the bots, which make money from advertising and transaction fees paid by the merchants, succeed, they would evolve from single-purchase tools to full-fledged brands that could dominate e-commerce. Consumers would gain confident, simple access to the best deals from many online merchants. And small e-tailers with superior performance would stand a better chance of competing against the likes of Amazon.com.

So if the technical challenge can be met, what might scuttle this vision of consumer heaven? Online war with the biggest merchants.

For decades, of course, major merchandisers have devised complexities--such as subtle styling differences in cars, refrigerators and even software--to create different models or versions that complicate comparison shopping and undermine price wars. Even the best bots could be bamboozled into an endless spin of comparisons to sort out such manipulative complexities.

Merchants don’t want to be mere fulfillers of orders, Cassar of Jupiter Communications notes. “They want to own the customer relationship.”

If merchandisers view bots as a threat rather than a helpful conduit to customers, open warfare could ensue. Merchants can try to block the bots legally or technologically, as EBay recently promised.

But e-tailers should be careful. That kind of war would be bloody for both sides, mostly because the biggest casualty could be consumer confidence in the Web.

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Times staff writer Charles Piller can be reached at charles.piller@latimes.com.