A comparison shopping optimization model based on suppliers' pricing contexts

Consumers in the online shopping environment have had difficulties in selecting an optimal supplier. This is caused by the fact that current comparison shopping services have limitations in considering sup-plier's various pricing strategies. Current Comparison Shopping Model (CSM) including these limitations may enable online consumers to select a non-optimal supplier. To overcome these problems, we proposed a Comparison Shopping Optimization Model based on Suppliers' Pricing Contexts (CSOM-SPC), which gives online consumers effective price-sorted suppliers. Through illustrative experimentation and paired t-test, we show that CSOM-SPC provides more realistic and effective comparison prices compared with current CSM. As the years go by, market of online shopping malls also grows. It is also no exception in Korea. We can see such phenomena through the increases of online sales amount and number of online shopping malls in Korea as shown in Fig. 1. These imply that the competition among online shopping malls may be serious. The competition becomes visible by various pricing strategies. We can also see these trends through comparison shopping sites. Competition leads to various pricing strategies. Most shopping malls are introducing mileage or coupon as well as free delivery cost. As credit card becomes popular in B2C payment, credit card discount is also becoming more common. For every year, credit card is forming massive proportions of total sales amount, as shown in Fig. 2, in Korea. In addition, credit card in December 2007 increased 1.2%p compared with same month of last year while EFT decreased 0.6%p, e-Money decreased 0.1%p, and others decreased 0.5%p. We can guess that the payment ratio by credit card will grow larger. Danawa (www.danawa.co.kr) is one of most popular comparison shopping sites in Korea. It provides sale price-sorted shopping mall list with delivery cost and supplementary information including mileage, credit card commission, and coupon. Fig. 3 depicts an example of Samsung NT-Q1U/N101, a kind of UMPC (Ultra Mobile Personal Computer). Though comparison shopping sites have contributed to the reduction of consumers' search costs (Bakos, 1998), consumers have still had difficulties in selecting an optimal supplier from them. As you see in Fig. 3, comparison shopping sites don't take into account price discount effect from various pricing promotion of online shopping malls. It means that there may be a gap between the comparison price by current Comparison Shopping Model (CSM) and the price that consumers have to pay after visiting on-line shopping mall. It depicts that it is …