1. Marzena Lipman Policy Manager 5 February 2014
Consumers and comparison tools DG Sanco Multi-Stakeholder Group on Price Comparison Tools
Marzena Lipman
Policy Manager
5 February 2014

2. About Consumer Futures
Consumer Futures represents the interests of consumers across essential, regulated markets. We use compelling evidence, expert analysis and strong argument to put consumer interests at the heart of policy-making and market behaviour.
Consumer Futures is the statutory representative for consumers of postal services across the UK, for energy consumers across GB, and for water consumers in Scotland.

3. About Consumer Futures
We have carried out extensive research into price comparison tools

4. Price Comparison Tools (PCTs): the growing market trend
Proliferation of PCTs in the market which vary in terms of market segments and business models:
Generic versus sector specific (eg energy, finance, telecom)
Information only versus switching/purchasing sites
Different information sourcing (eg some have direct arrangements with suppliers, others scrape information from suppliers’ websites)
Different financing models (eg revenues from advertising, commission earned on completed switch/purchase or redirecting to suppliers’ sites, or ‘other’)

5. Price Comparison Tools (PCTs): the growing market trend (2)
Market innovation and the development of the ‘new breed’ of PCTs
Collective switching sites like the Big Switch
Group purchasing sites like Quidco, Groupon, Amazon Local
Data analyser services eg Billmonitor.com
Price comparison apps

6. Price Comparison Tools (PCTs): the growing market trend (3)‎
Compare car insurance, travel insurance, credit cards, savings accounts, current accounts and mortgages with Google. Start a new quote, retrieve previous ...

7. Growing consumer awareness and take up
85% of consumers are aware of price comparison websites (PCWs)
83% aware of the ‘Big Four’ (MoneySupermarket, Comparethemarket, Confused and GoCompare) versus 6% aware of other than the ‘Big Four’

8. Growing consumer awareness and take up (2)
The ‘Big Four’:

9. Growing consumer awareness and take up (3)
56% of consumers have used a PCW in the last two years, of which 85% used one of the ‘Big Four’ and 8% not one of the ‘Big Four’
52% of consumers who have used a PCW in the past two years have switched or purchased directly through a PCW

10. Products/services searched for via PCWs

11. Products/services switched using PCWs
52% of consumers in our quantitative survey said they had switched providers or purchased directly using a PCW

12. Growing consumer interest in alternative comparison models and services
In 2012 the Big Switch collective switching offer in the GB energy market initiated by Which? and the campaigning platform 38 degrees resulted in:
c 287k consumers registered their interest in the initiative
- of which c 151k went to provide the requisite information about their current energy tariff arrangements and consumption history
- of which c 37k have switched to the winning provider and achieved an average saving of £223

13. Why people use PCWs

14. Usability expectations
Most important features when using PCWs

15. Potential to empower consumers
Save consumers time and money navigating through a proliferation of deals on the market, and the complexity of products and services
Take the hassle of switching
Help consumers to understand their consumption needs, and potentially lead to changes in consumption behaviour

16. Consumer concerns
Issues of impartiality, reliability and accuracy of information
Effective remedies and redress
Enforcement of consumer protection regulations
Data protection
Accessibility and usability

17. Market challenges Availability of information Switching barriers
e.g. some suppliers
- do not want to be listed on PCWs
- decide to supply data to selected PCWs partners only
-put pressure on PCWs to exclude the offers of key competitors
Switching barriers
e.g. switching levels high in the insurance sector, but low in the telecom market)
Regulatory barriers
e.g. lack of a unified approach to the PCWs market by regulators, problems with regulation versus innovation

18. How are PCTs working? PCTs do well on some things…
And not so well on others…

19. How are PCTs working across sectors: Accuracy
How costs on supplier site compared to costs on price comparison site:
Was the supplier cost …?

20. How are PCTs working across sectors: Information Transparency
Did price comparison website supplier provide information on?

21. The level of consumer satisfaction

22. Ease of use

23. Useful in finding a good deal

24. Useful for switching suppliers

25. Whether PCWs are perceived to give a good deal?
Trust
Whether PCWs are perceived to give a good deal?

26. Consumer behaviour The need to verify PCWs results
Number of PCWs used before making a decision

27. Consumer behaviour The need to verify PCWs results
Reasons for looking at multiple PCWs

28. Understanding and trust in rankings
Consumers rely on assumptions about both the price they pay and the pricing details provided by PCWs
Many consumers lack clarity about the way results are ranked
Many consumers are not clear about how suppliers included in the ranking are selected
Some consumers are confused by positioning of adverts and sponsored links next to research results

29. Clarity about ranking criteria

30. Clarity about how suppliers are selected

31. Knowledge and understanding of PCWs business models

32. Clarity on whether suppliers can influence ranking by paying

33. Privacy concerns 30% do not switch through PCTs due to concerns
about their personal data
Will I get lots of unwanted calls and s from them or other companies?
Are they secure?
What do they do with my information? Will they sell my data to other companies?
Why do they need to know
detail information about me?

34. Regulators’ initiatives

35. Awareness of voluntary accreditation schemes

36. Whether accreditation schemes would influence choice of PCW in future

37. Who would be the most trusted to run an accreditation scheme?

38. Way forward
Address issues of accuracy and reliability of information of PCWs
Raising awareness of accreditation schemes
More effective advertising of collective switching sites and next generation PCWs
Address privacy concerns
Improve usability and accessibility
Improve access to data
Reduce switching barriers
More joint up approach of regulators

39. Thank you