After 6 months of blogging about comparison engines, I finally got around to talking to AOL Shopping/inStore. That it took me 6 months says a lot. Yes, it says I’m definitely a bit slow, but at the same time, I didn’t view AOL Shopping as much more than an affiliate of Shopzilla. The reason I think AOL inStore is important, though, is that AOL’s demographic is arguably the average Joe who isn’t as savvy as you or me…and that average Joe is contribting to the the strong increase in traffic the comparison engines are seeing this holiday season. Therefore, the way AOL inStore presents information to its users might provide a good view of how the other half shops online. Following is my interview with Hardeep Bindra, GM of AOL Shopping/inStore and Kathie Brockman from communications. I have to admit that I was definitely confused from the start of the interview, so think of this as more of an educational experience than anthing else….

Before you read the interview, I’d suggest checking out the site (click on some ads, browse through the categories and go down a couple levels, and perform a search or two) and reading some some snipets from AOL inStore’s product summary:

“The inStore mission is simple: to make shopping as essential and valuable to the online experience as using email. inStore brings the power of online search and the convenience of online shopping together to provide users with a unique value-added experience that helps them find and zeo in on – “pinpoint” – the exact items they want to purcahse at the prices they want to pay. The heart of inStore – Pinpoint Shopping – fills a gap in the market with a comprehensive, objective shopping search tool that engages the user through its unique “Rapport” feature and offers a more consumer-friendly approact to online shipping.

“Our research found that there are three distinct cateogies of online shoppers – searchers, browsers and impulse buyers – and that existing shopping experiences don’t adequately serve all three.”

“Our Response: inStore. For searchers, inStore is harnessing the success of the AOL Search service and using state-of-the-art search technology to make product searches more comprehensive and intuitive, with natural language search tools that help users quickly find what they’re looking for with fewer page loads. For browsers, inStore provides a convenient way to shop by category, both at favorite stores and by leading brands. For impules buyers, inStore works with the nation’s largest and most respected retailers to serve up timely, relevant offers and special events, both online and in the user’s local community.”

Now the interview:

What is AOL Pinpoint Shopping?
“inStore has browse functionality and features our merchant partners as well as providing the ability to do a keyword search. Pinpoint is the comparison shopping product that powers inStore.”

“The first level (and category level) is made up of merchant partners and then when you drill down, you bubble up products that are fed through the pinpoint shopping/shopzilla relationship. It’s sub-category specific. On the main page – the first level – if you clicked on one of the retailer placements, you‘re taken diretly to their websites.”

What shopping search or comparison engine technology does AOL own? What functionality is AOL providing?
What Shopzilla brings to the table is 29m product and 6m stores. It’s the merchant results and ratings. AOL brings the look and feel, the personality, the rapport functionality. When you type in ‘woman’s sweater‘, it has a whole dialogue, like shopping with a personal assistant. That’s the functionality AOL is providing.

In an InternetRetailer article this summer, the author said that AOL limits it’s retail partners to just 75? Can you explain? What is a retail partner?
“AOL is going to bring the best of breed partners to its users. Initially, in our previous model we had 250 [retail partners], and we scaled it down to those that were best of breed, well recognized, and created a positive brand association with AOL. We narrowed down to what our users showed an interest in and narrowed down to the top 10 or 5 of in a category. We’re still at 75 – the stores keep rotating and these are shown from a relevancy perspective.”

inStore seems like nothing more than a list of merchants who have paid to be listed…a directory (homepage, deals & steals). This seems to be a different strategy than Yahoo!, Google, and MSN have chosen. Can you explain – Is this part of AOL’s strategy to just bring the best of the web together and not necessarily develop its own technology?
“In a way, yes, it is true. Our forte has been bringing products and services to the audience and providing context to their experience. Our focus has been and will continue to be that guiding voice to our users for what they are looking for, what’s in, and make that as easy and recognizable as it is off line. We’re adding value from a context and from an advocacy perspective. We’re continually looking at relevancy. On the consumer side [we always ask], how can we make the experience better and more relevant, and tie it in with what users are seeing on the web. [Our users] don’t shop in a vacuum, we want to keep the relevancy aspect there. We’re not necessarily aligning with current industry standards, but we’re making ourselves more open to accepting data feeds.”

How is this a better experience for the merchants?
“A couple things: First, we understand who our user base is. When you go into the main page and category level, a person is not shown a bunch of results because we know our user base and understand its behavior. The tertiary results have the comparison engine listings.”

“Second, there is a CPC component to all the merchant listings. We’re meeting or beating [advertiser] targets. The group that manages those relationships is dynamic and continues to add placements and change things in real time. It’s a fluid partnerships where we provide suggestions and therefore provide a much better experience than [working through] a data feed, which can be more mechanical. We bring the human element in and adjust to maximize benefit for our partner.”

How does a merchant advertise?
“Each relationship has a slotting fee and a CPC fee.”

Are people searching or browsing? What do people click on?
“Pre-holidays, the focus is more on browsing – people come in and look at the promotions. As we get closer to holidays there are specific things people have in mind and people favor search. The promotions we do are different. We pop up top ten list and those drive clicks. We understand what users are looking for and prepare our programming for that.”

How are you marketing?
“It’s a combination of network wide internal [advertising] as well as outbound [advertising]. [For AOL users], the welcome screen – the fist thing that people see – is going to be a key proponent in driving traffic. We’re also doing email, PPC ads, and SEO/SEM campaigns.”