Consumer FuturesPrice comparison websites: consumer perceptions and experiences A report by RS Consulting forConsumer Futures2Consumer FuturesConsumer FuturesConsumer 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 United Kingdom, for energy consumers across Great Britain and for water consumers in Scotland. It maintains the powers, responsibilities and duties of Consumer Focus.In April 2014 Consumer Futures will become part of the Citizens Advice service.3Price comparison websites: consumer perceptions and experiencesForewordPrice comparison websites (PCWs) have mushroomed over recent years and are now seen by many as a tool of consumer empowerment. They are slowly beginning to shift traditional asymmetries in information and power between a consumer and a supplier. The price comparison intermediaries market continues to evolve and now alongside more established PCWs, which focus primarily on information giving and advice, a new generation of services that build on the price comparison model is emerging. These include collective switching sites, group purchasing, mobile apps or more sophisticated consumption data analysers. The growth of the price comparison tool market is undoubtedly fueled by consumer demand for third party services which can:save them time and money when navigating through the maze of deals and the complexity of products and services on the markettake the hassle of switching, for example switching energy suppliershelp them to understand their consumption needs, and potentially lead to changes in consumption behavior. The growing importance of the price comparison tool market was recognised in the UK Governments consumer empowerment strategy Better Choice, Better Deals: Consumers powering growthwhere, for example, price comparison websites are seen as key tools to help consumers make better and more informed choices. The UK Governments midata initiative, which aims to give consumers access to core consumption and transaction data, is set to power a new breed of comparison tools that can ofer bespoke comparisons to the consumer based on their specic requirements and their actual use of a service. However, despite the rapid development of the price comparison tool market, little is known about:consumer attitudes, knowledge and experiences of using PCWsthe reasons behind popularity of some services compared to othersconsumer appetite for a new generation of intermediary services which are emerging on the market. For example anecdotal evidence suggests consumers tend to use PCWs for car or home insurance, but fewer use them for other markets. OFT researchfound that consumers trust price comparison websites for energy, travel and insurance, but regard them as less reliable for other nancial products, mobile phones and media.Ofgem researchindicated that consumers were less aware of energy price comparison websites which could help them to choose an energy supplier or tarif, or help them to switch in comparison to generalist ones which ofer information on a range of consumer goods and services.4Consumer FuturesSimilarly, there is limited understanding of consumer perceptions of PCWs and their knowledge of how they operate, or awareness of quality assurance accreditation schemes for price comparison sites, such as Ofcomsand Ofgemsschemes.In order to address the information shortfall indentied above and to gain an insight into consumer experiences with the price comparison tools market Consumer Futures commissioned RS Consulting to carry out research to explore consumer awareness, trust and condence, user behaviour, accessibility and usability, and interest in take up of a new generation of services that build on the price comparison model.The research conrms that PCWs are a popular choice for consumers: 56 per cent declared they have used a PCW in the last two years52 per cent switched or purchased directly through a PCW.The research found that consumers use PCWs to:bargain hunt to get the best deal (85 per cent)compare prices (83 per cent)save money (79 per cent)identify providers 69 (per cent)to switch (67 per cent) either through the PCW or directly with the supplier52 per cent declared they have used PCWs to switch providers or purchase products. Our research indicates that the use of PCWs as a switching or purchasing portal has increased; a survey of online consumers for the OFTs Advertising of Prices market study published in December 2010 found that only 15 per cent of those surveyed purchased through a PCW.However, switching with the use of PCW as an intermediary portal remains dominated by car and home insurance, and energy markets. For example, 77 per cent of consumers used a PCW to switch car insurance and 37 per cent their energy supplier and home insurance. In comparison only 7 per cent have bought landline or mobile telephone services via a PCW, and only 3 per cent TV services. The low switching levels via PCWs for telecommunication utilities correspond to low consumer satisfaction with using PCWs for switching mobile or broadband via PCWs. Gas and electricity markets score more highly. Consumers point out that the renewal notice present in the insurance sector serves as a trigger to look for more competitive ofers and switch. This is unlike in the telecommunication sector, where consumers tend to haggle with retaining providers in order to achieve savings rather than switch. 5Price comparison websites: consumer perceptions and experiencesIn addition consumers cite contract terms, high costs of early termination rates, and limited choice of quality providers in their locations ofering good mobile coverage or high broadband speeds as reasons which prevent them from switching. It is evident from the ndings that PCWs enjoy a high level of consumer trust and satisfaction. For example 73 per cent of those using PCWs describe them as fairly reliable, while 52 per cent rate them as useful in helping to nd a good deal. However, despite high consumer trust the research indicates that some consumers rely on assumptions about the price they pay and the pricing details provided by PCWs, rather than accurate information when making their purchasing decisions. For example, our research shows that consumers are often not sure about ranking criteria, and are not clear about how suppliers included in the ranking are selected. Similarly some are confused by positioning of adverts and sponsored links next to research results which makes it difcult to determine whether the advertisement is part of the actual search, or not. In addition, consumers score PCWs performances as poor on clarity on whether the companies can inuence their ranking by paying (54 per cent). The research also identied consumer concerns about privacy. In particular consumers are hesitant to give their personal details such as telephone number and email address, as they fear these might be shared with third parties and may result in nuisance calls and other unsolicited marketing. Our research found that privacy concerns undermine consumer condence in using PCWs for switching and purchasing products and services, with 30 per cent of consumers declaring they do not want to give personal details to PCWs. Similar privacy concerns are also cited as one of the barriers to consumer engagement and take up of new generation of comparison services such as for example data analysers. In conclusion we reiterate our previous call for PCWs operators, as well as the new generation of comparison intermediaries to reassure consumers that their trust in price comparison services is well founded. That means ensuring independence, impartiality and transparency of information so that any commercial relationship between price comparison websites operators and suppliers are transparent to consumers and do not inuence the accuracy or consistency of the information provided.In particular we recommend that price comparison tool operators: ensure a clear distinction between sponsored or advertised links, and ranked search results based on consumer preferenceimprove clarity around ranking of results6Consumer Futuresensure prices displayed are accurate, up to date and comprehensive (ie if they include additional costs, such as a delivery charge or any compulsory extra charges)do not misrepresent their independencedo not post ctitious recommendations are open about suppliers who have paid for prominencehave clear privacy policies which give consumers an opportunity to opt out of data sharing.We also urge regulators to continue market supervision and enforcement, address problems with switching barriers, as well as raising awareness of accreditation schemes they run. With regard to the latter our research indicates that consumer awareness of accreditation schemes run by regulators is low, with only 16 per cent of consumers declaring knowledge of these. However, the ndings point out that many consumers would see the value in accreditation as a means of providing an extra level of reassurance and trust in the services provided by PCWs. Evidence suggests that accredited comparison tools are likely to perform better on a number of criteria. For example, Consumer Focus mystery shopping found that the degree of good performance was higher on accredited sites in comparison to non-accredited ones. Similarly preliminary ndings from the European Commissions 2012 ISP study found that comparison websites accredited or run by regulators scored higher in ve out of seven assessed criteria, including user-friendliness, market coverage of ofers, clarity of information on ofers and price.Accreditation is likely to increase in importance with the growing number of new generation comparison intermediaries ofering consumers more complex integrated services such as information and advice, switching services, personal data management, life management services (for example health or money management), or voice tools to express opinions and views. That is why it is vital that regulators investigate ways the existing accreditation schemes for price comparison tools can be more efective in aiding consumers in choosing quality assured price comparison websites operators. Perhaps one of the ideas to consider would be to development of a unied accreditation for price comparison services across the markets, or some kind of mark of trust which emerging innovative new services could use to distinguish their ofering, emphasise their genuineness and increase consumer trust. Marzena Lipman Policy Manager By Kate Downer, Aino Pietikinen and Charlotte Crichton with Sania Haq, Rhiannon Jones and Fiona Pannell Price comparison websites: consumer perceptions and experiencesFindings from qualitative and quantitative research Prepared for Consumer Futures This work has been conducted in accordance with ISO 20252,the international standard for market and social research Table of Contents 1.Executive summary ........................................................................................................................ i 1.1Background ........................................................................................................................... i 1.2Methodology ........................................................................................................................ i 1.3Purchasing and comparing prices for products and services .............................................. ii 1.4Use and usability of price comparison websites ................................................................. ii 1.5Consumer trust and understanding of price comparison websites operating models ..... v 1.6The future for price comparison websites ......................................................................... vi 1.7Conclusions ........................................................................................................................ vii 1.8Recommendations ............................................................................................................ viii 2.Background and objectives ........................................................................................................... 1 2.1About Consumer Focus ....................................................................................................... 1 2.2Background .......................................................................................................................... 1 2.3Objectives ............................................................................................................................ 4 3.Methodology ................................................................................................................................. 6 3.1Research design and target audience ................................................................................. 6 3.2Quantitative survey ............................................................................................................. 6 3.3Semi-structured usability hall tests ..................................................................................... 6 3.4Depth interviews ................................................................................................................. 7 4.Purchasing and comparing prices for products and services ....................................................... 8 4.1Using the internet ................................................................................................................ 8 4.2Awareness of price comparison websites ......................................................................... 13 4.3Proportion of people using PCWs ..................................................................................... 15 4.4How often price comparison sites are used ...................................................................... 17 4.5Price comparison websites used ....................................................................................... 17 4.6Consumers who dont use price comparison websites ..................................................... 23 5.Use and usability of price comparison websites ........................................................................ 27 5.1The user experience .......................................................................................................... 27 5.2Benefits of using PCWs ...................................................................................................... 34 5.3Ease of use and usability ................................................................................................... 37 5.4Switching behaviour .......................................................................................................... 39 5.5Non-user decision-making ................................................................................................. 42 6.Consumer trust and understanding of price comparison websites operating models ............. 48 6.1Trust and confidence in the information that PCWs provide ........................................... 48 6.2Understanding and trust in rankings ................................................................................. 49 6.3Verifying price comparison results .................................................................................... 51 6.4Concern about use of personal details and consumer privacy ......................................... 52 6.5Trust in PCWs as trading entities ....................................................................................... 54 6.6Knowledge and understanding of PCWs business models .............................................. 54 6.7Awareness and usage of accreditation schemes and accredited PCWs ........................... 58 7.The future for price comparison websites.................................................................................. 63 7.1Anticipated future use of PCWs ........................................................................................ 63 7.2Collective switching sites ................................................................................................... 63 7.3Data analyser service ......................................................................................................... 68 7.4Price comparison apps ...................................................................................................... 70 7.5Interest in an alternative price comparison service .......................................................... 72 8.Conclusions ................................................................................................................................. 75 8.1Awareness, perceptions and usage of price comparison sites ......................................... 75 8.2Trust placed in price comparison sites .............................................................................. 75 8.3Interest in alternative comparison models and services .................................................. 77 8.4Ways in which PCWs enable consumers to make more effective choices ....................... 78 8.5Ways in which PCWs inhibit effective choices .................................................................. 78 8.6Ensuring that PCWs enable effective decision-making: user experience and usability ... 79 8.7Ensuring that PCWs enable effective decision-making: accreditation ............................. 80 8.8Recommendations for the ways PCWs operate ................................................................ 80 8.9Recommendations for further research ............................................................................ 80 Appendix A: Methodology ................................................................................................................. 82 Research design .......................................................................................................................... 82 Target audience .......................................................................................................................... 82 Quantitative survey ..................................................................................................................... 82 Semi-structured usability hall tests ............................................................................................ 85 Depth interviews ......................................................................................................................... 88 Appendix B: Websites covered in consumer usability testing ........................................................... 91 Appendix C: Quantitative questionnaire ........................................................................................... 92 Appendix D: Hall test screener questionnaire ................................................................................. 123 Appendix E: Hall test questionnaire ................................................................................................. 134 Appendix F: Qualitative depth interview discussion guide ............................................................. 142 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 The Authors Kate Downer, Associate Director, specialises in public policy, third sector and decision-making research, and has led high-profile assignments for Consumer Focus, the Department for Work and Pensions (DWP) and many private sector clients. Kate has an MA in Modern and Medieval Languages from Cambridge University, and an MSc in Management and Business Research Methods from the Open University. Aino Pietikinen, Project Manager, specialises in public policy and third sector research. She has worked extensively for public and charity sector clients, including the Department for Education (DfE), DWP, Nesta (National Endowment for Science, Technology and the Arts) and the British Red Cross. Aino read Management at UMIST and Science, Technology and Innovation Management at Manchester Business School, University of Manchester. Charlotte Crichton, Senior Research Consultant specialises in technology, public and third sector research. She has worked on a number of studies for Consumer Focus and other client organisations including Macmillan Cancer Support, the British Library and DWP. Charlotte read Psychology at the University of Kent. Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 Glossary of terms Accreditation schemeVoluntary codes of conduct that price comparison websites can sign up to. These guarantee to consumers that the information they receive is accurate, reliable and comprehensive. Examples of these schemes include the Consumer Focus Confidence Code and Ofcom Price Comparison Accreditation Scheme Advertising bannerSee Banner Ad-trackingRecording, monitoring and reporting on the number of people who click on, or otherwise respond to an advertAffinity partnershipAffinity partnerships consist of two parties. The affinity group seeks to add value to its existing customers, members or donors by promoting products and services they dont currently sell, for example electricity. Meanwhile, the product supplier seeks to acquire new customers by using the strength of the affinity group organisations relationship with its customersAirline insolvencyWhen an airline collapses and fails to exist BannerA graphic image on a webpage used with the intention of being highly visible. Banners can contain links to other parts of the site, or they can be advertisements that take the website user to the advert suppliers own site, when somebody clicks on them The Big FourThe four price comparison websites with the greatest market share. They are moneysupermarket.com, gocompare.com, comparethemarket.com and confused.com. The Big Four operate across a range of sectors, including utilities, insurance, broadband internet and mobile phones BillmonitorAn online data analyser service that finds the mobile phone contract most suited to the users lifestyle and usage, based on data inputted directly by the user, or by the service accessing the user's online account (with their permission) Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 BroadbandSignals sent over a wide range of frequencies in high-capacity telecommunications, used for access to the internet and is sometimes known as high-speed internet Citizens Advice Bureau (CAB) An independent UK charity that gives free, confidential information and advice to help people with their money, legal, consumer and other problems Click-throughsIn this context, when consumers click on a supplier shown on a price comparison websites results page, and are taken either to the suppliers own website, to an area of the site where they are given more information about the supplier, or to a payment page Collective switching siteWebsites where people can register their household and act as a group to get the cheapest electricity and gas. These websites ask electricity and gas suppliers to quote their cheapest deal, and that deal is then made available to people who have registered with the siteCommissionA payment to a price comparison website that is directly related to the amount of goods sold through it to a site user Consumer Focus Confidence CodeA voluntary code of practice for online domestic price comparison services, that says the site will provide completely impartial and unbiased information Consumer watchdogAn official organisation that works to protect the rights and interests of people who buy things or use services Contractual tie-insOtherwise known as contracts. Mobile phone service providers can sell their mobile phone package to a user who enters into a long-term (generally lasting 12, 18 or 24 months) or short-term (also commonly referred to as a rolling contract or a 30-day contract) billing arrangement with a mobile network operator Data analyser serviceA new kind of price comparison tool where consumers give detailed data about their usage (e.g. of energy, mobile phone) to a third party, who then helps the consumer to find the best deal. One example is Billmonitor DealA result that shows in the quotes section of the price comparison website Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 Depth interviewA qualitative research technique used in market research which is usually a one-on-one interview between the researcher and interviewee Direct purchasingMaking a payment for a product or service via a price comparison website by using a click-through DownloadTo transfer (software, data, character sets, etc.) from a distant to a nearby computer, from a larger to a smaller computer, or from a computer to a peripheral device Drop-down menuA menu that appears on a computer screen when its title is selected and remains on display until dismissed Fibre-optic broadbandA broadband internet connection using fibre-optic cables to transfer data. Transfer is typically faster than via a telephone modem or dial-up connection Filter Routing within a website, that tailors the information presented or asked for, to the individual. Normally, filtering cuts down the amount of information that a user must see or provide HackingTo gain access to a computer file or network illegally or without authorisation Hall test A market research test where respondents are asked to go into a central location to answer questions or to test products or services HomepageThe opening or main page of a website, intended chiefly to greet visitors and provide information about the site or its owner Impartial resultsIn this context, results that appear in the quotes that have not been influenced by the service provider Internet Protocol (IP)The method by which data is sent from one computer to another over the internet Lapsed userInternet users who have used a price comparison website in the past, but not in the last two years Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 LinkAbbreviation for hyperlink. A word, phrase, picture, icon, or something similar on a website, on which a user may click to move to another part of the website, or to another website MenuA list of available options as displayed on a screen Mobile phone appSoftware that runs on mobile phones and smartphones that make it easier for people to access information services on the go. Apps often have more customisable features than websites Mobile phone package Also known as a data plan, this refers to the data usage allowances that come with direct debit phone tariffs and normally includes calling minutes, number of texts and internet download capacity. Mobile phone service providers offer different packages based on price and the volume of data that consumers want to access Next generation price comparison service Sites and services that provide new approaches for consumers to use in making price comparisons, whether online or offline. Examples of next generation price comparison services include those that analyse the users consumption data in detail, and those that allow consumers to act together as a group in negotiating with providers Ofcom (Office of communications)The independent regulator and competition authority for the UK communications industries. Ofcom regulates the TV and radio sectors, fixed line telecoms, mobiles, postal services, and the airwaves over which wireless devices operate Ofcom Price Comparison Accreditation SchemeA voluntary code of practice for online domestic price comparison services for providing completely impartial and unbiased informationOffice for National Statistics (ONS) The UKs largest independent producer of official statistics Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 Office of Fair Trading (OFT)A not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator. The OFT's goal is to make markets work well for consumers, ensuring vigorous competition between fair-dealing businesses and prohibiting unfair practices such as rogue trading, scams and cartels Ofgem (Office of Gas and Electricity Markets) The independent regulator and competition authority for the UK gas and electricity industries. Ofgem promotes competition, wherever appropriate, and regulates the monopoly companies that run the gas and electricity networksPackage When more than one service is bought from one supplier in order to get a better dealPay as you goA mobile phone for which credit is purchased in advance of service use. The purchased credit is used to pay for mobile phone services at the point the service is accessed or consumed Personal Digital Assistant (PDA) A palmtop computer used to store information such as addresses and telephone numbers, and for simple word processing and spreadsheet use, as well as for accessing the internet Price comparison websites (PCW)Online tools that consumers can use to assess the options available to them while shopping online, and to view different prices for specific products and services. The sites can help to simplify purchase decision-making by compiling and organising information from several sources in a way that allows consumers to understand easily the deals that are available to them Price-led rankingResults provided on a site are ranked in an order that is influenced by price, either low to high, or high to low Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 ProfileA social identity that an internet user establishes in online communities and websites. Often this requires users to provide their name and other personal information such as date of birth and address, as well as creating a username and password so that they can log in and find details saved from previous sessions Provider See Service provider Qualitative researchAn exploratory research technique used in market research, and in this study. Typically, this involves open-ended questions that form part of a discussion Quantitative researchA systematic, empirical study used in market research and in this study. Typically, quantitative research involves closed-ended questions within questionnaires QuotesThe results that the PCWs produce when they have completed the process of making a comparison. These normally contain information about the service offered RankTo give something a place within a grading system. In this context it refers to the position of a quote within the results Regulated marketThe provision of goods or services that is regulated by a government-appointed body. The regulation may cover the terms and conditions of supplying the goods and services and, in particular, the price allowed to be charged and/ or to whom they are distributed. It is common for a regulated market to control natural monopolies such as aspects of telecommunications, water, gas and electricity supply RegulatorSee regulatory body Regulatory bodyA public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity Search engineA website that collects and organises content from all over the internet. Those wishing to locate something would enter a query about what they would like to find and the engine provides links to content that matches what they want Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 Search resultsSee quotes Search toolsParts of a website that help users to search for a particular word or phrase within the website. This normally take the form of a box into which the user types a search term, with the site then producing links to the searched-for termService providerAn organisation that provides some kind of service or good to another organisation or individual in exchange for payment SmartphoneA mobile phone that is able to perform many of the functions of a computer, typically having a relatively large screen and an operating system that is capable of running general-purpose applications Social networking siteA website that allows subscribers to interact with one another, typically by requesting that others add them to their visible list of contacts, by forming or joining sub-groups based around shared interest, or publishing content so that a specified group of subscribers can access it StakeholderA person, group or organisation that has interest or concern in an organisation Street intercepts A market research technique where people are stopped in the street and asked to take part in a research exercise Supplier A company or body that enters into a contract with a customer to supply a service such as gas, electricity, broadband, insurance or telephone Switching supplierChanging from one supplier to another Tablet computerCommonly referred to as tablets, these are wireless portable personal computers that use a touchscreen or a stylus pen to access or process information. Most do not require a keyboard or a mouse. They are generally lightweight devices that allow for greater mobility Termination chargesThe charges that are applied when switching supplier before the end of the contractual period Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 TraderSee supplier Trading StandardsLocal authority departments in the UK which enforce a wide range of legislation. They investigate commercial organisations that trade outside the law or in unethical ways. They attempt to remedy breaches by advice or by formal enforcement action Usage data The amount of data sent or received from a mobile phone device, normally over the course of a month. Mobile phone packages normally have a set amount of data that can be sent or receivedWhich?A charity that engages in advocacy campaigns on various consumer protection issues and aims to promote informed consumer choice in the purchase of goods and services, by testing products, highlighting inferior products or services, raising awareness of consumer rights and offering independent advice. Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked:26.4.13 List of acronymsCABCitizens Advice Bureau CATIComputer-Assisted Telephone Interviewing ONSOffice for National StatisticsOFTOffice of Fair Trading PDA Personal Digital Assistant PCW Price Comparison Website RDDRandom Digit Dialing RIMRandom Iterative Method RIURegulated Industries Unit SEGSocio-Economic Grade i Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 1.Executive summary 1.1Background Price comparison websites (PCWs) are online tools that consumers can use to assess the options available to them while shopping online, and to view different prices for specific products and services. Along with increased penetration of fixed and mobile internet, smartphones and other portable internet devices, use of PCWs has become increasingly common among consumers. Previous research has highlighted various concerns about PCWs, such as the failure of some to provide adequate information about delivery costs, delivery times, taxes or availability; unclear information about the way search results are ranked; and lack of information about payments that traders can make in exchange for ranking placements and listings.1 However, to date there is little evidence of the user experience and usability of PCWs from the consumer perspective.Consumer Futures commissioned this research to explore consumer experiences of PCWs in terms of awareness, trust and confidence, user behaviour, accessibility and usability, and potential related concerns. The research will allow Consumer Futures to advise stakeholders on consumer concerns regarding the use of PCWs and, ultimately, to set best practice for such sites. Consumer Futures represents the interests of consumers across essential, regulated markets. It uses 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 United Kingdom, for energy consumers across Great Britain and for water consumers in Scotland. It maintains the powers, responsibilities and duties of Consumer Focus.In April 2014 Consumer Futures will, subject to Parliamentary consent, become part of the Citizens Advice service.1.2Methodology The research consisted of three elements: a nationally representative telephone survey of 2,000 consumers aged 18 years and older a consumer usability exercise with pre-selected PCWs, undertaken via 197 hall tests qualitative 30-minute face-to-face interviews among 63 consumers (who also took part in the usability study) to obtain a better understanding of attitudes to PCWs. The usability hall tests and depth interviews were carried out in five locations across Great Britain: Watford, Cardiff, Birmingham, Newcastle and Glasgow. They involved consumers who use the internet to some extent, and who are responsible for researching or buying at least one of the specified products. The products covered in the scope of the usability tests and depth interviews are fixed broadband, electricity, home insurance, travel insurance and mobile phones. 1 Civic Consulting (2011) Consumer market study on the functioning of e-commerce and Internet marketing and selling techniques in the retail of goods [Online]. Available from:http://ec.europa.eu/consumers/consumer_research/market_studies/docs/study_ecommerce_goods_en.pdf[Accessed:07.06.13] ; Consumer Focus (2013), Comparingcomparison sites, http://www.consumerfocus.org.uk/files/2013/01/Comparing-comparison-sites.pdf ii Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 1.3Purchasing and comparing prices for products and services The majority (84 per cent) of consumers use the internet. Most people (85 per cent of all consumers) are aware of PCWs, but awareness is understandably higher among internet users (93 per cent). Awareness is also significantly higher among internet users in England (94 per cent) than those in Scotland (87 per cent). Among those aware of PCWs, the majority (83 per cent) recall one or more of the Big Four sites without prompting. Very few consumers (less than one per cent) who are aware of PCWs, spontaneously name collective switching sites and next generation sites. While over half of all consumers (56 per cent) have used a PCW in some way to view prices, for other research, or to actually switch providers in the last two years, the proportion of users is much higher (71 per cent) among those aware of them.Fewer consumers in the socio-economic grades D and E use PCWs. A large majority of consumers (85 per cent), who have used a PCW in the last two years, have used one or more of the Big Four while few (eight per cent) have used only other sites. Younger consumers are more likely to use the Big Four PCWs than older groups. There is little evidence of loyalty to particular sites; our qualitative research suggests that consumers use sites that come to mind for them when they are shopping around, and the quantitative survey demonstrates that a large majority (83 per cent) of PCW users typically visit multiple sites as part of the process. Advertising is a key reason for remembering specific sites and for using them.Consumers who use PCWs do so to get what they perceive to be the best deals (85 per cent), compare prices (83 per cent) and, consequently, to save money (79 per cent). Around two-thirds of consumers (69 per cent) use them to identify providers for particular products or services, and a similar proportion (67 per cent) to switch providers.The most common product categories for using PCWs in the last two years are car insurance (81 per cent); home insurance (50 per cent) and gas or electricity deals (44 per cent). Fewer consumers have used a PCW to investigate travel insurance (32 per cent), mobile phone services, (21 per cent) or cable and satellite TV packages (13 per cent).A small proportion of all consumers (six per cent) are lapsed users of PCWs: they have used a PCW in the past but not in the last two years.Half of these lapsed users (50 per cent) have not used a PCW because they have not needed to compare products and 18 per cent have someone else using it for them. Some (15 per cent) felt they had have not got the best deal when using a PCW in the past.Less than half (44 per cent) of consumers who do not use the internet are aware that websites exist that can help people to compare prices for products and services. A minority of non-users of the internet (21 per cent) have asked others to use PCWs on their behalf.1.4Use and usability of price comparison websites The usability exercises and interviews identify various issues that consumers face in using PCWs. Unclear signposting in menus and sub-menus confuses consumers and makes navigation difficult. Text in small font sizes is also confusing, and causes consumers to worry that they have missed something important, or that disagreeable information might be hidden from them. Additionally, links that are unrecognisable, such as text that contains a hyperlink but does not make this evident, can mean that consumers dont know where to click next in order to proceed. Consumers appreciate having explanations for technical terms that they might be unfamiliar with, but some still struggle to use these explanations. iii Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 A few consumers also worry about adverts that are positioned next to results, because this can make it difficult to identify whether the advertisement is actually part of the search results. Some users also express concern about sites that encourage creating a personal user account, or logging in via social media sites, and say that this would deter them from using that PCW in the future.Both the quantitative survey and qualitative research show that a key reason for negative experiences with a PCW is the lack of opportunity to customise or tailor the search. Around a quarter of the consumers in the hall tests place the ability to customise their search among their personal top three factors influencing choice of PCW. Many become frustrated if the search is inflexible and does not allow them to change the search criteria to reflect their personal situation. They may also become irritated when answering questions requiring specific information, which they dont have to hand, or when it is not clear why the information is needed at such an early stage or how it will be used. Other elements that frustrate consumers include sites not allowing the user to progress until they have provided all information required (information they may not have to hand), not allowing the user to add additional explanation (for example, if their situation does not correspond directly to one of the options in a drop-down menu), and returning to previous pages several times because incorrect or incomplete data has been provided.Most people are willing to enter their postcode, because they do not perceive this information to be overly personal in nature. However, consumers are more hesitant about providing their telephone number and email address. Out of the two, they are least comfortable with providing telephone numbers because they expect to receive sales calls as a consequence of doing so. The majority of consumers are clear that they would not provide their bank details or more sensitive financial information regarding their income when using a PCW. In comparing the deals that PCWs offer, users prefer to be presented with a reasonably high volume of information. It is important, though, that this information is clearly structured. This allows users to feel confident about what they are buying, and to easily compare the different options and their features.Price is the most important factor in the comparison process, with nine out of 10 consumers in the hall tests mentioning price as one of the three most important factors influencing their personal decision. Generally, however, consumers do not necessarily choose the cheapest deal: rather, they compare prices in the context of the overall deal and the information as a whole. Consequently, the information provided about the deal (ie the product description and features) is also very important, with two-thirds of consumers placing this among the top three factors considered. Being a well-known brand is also a key consideration, with around six in 10 consumers in hall tests mentioning familiarity with, or the reputation of, the product provider as one of the top three factors they consider when making a decision.The main perceived benefits of PCWs are getting better deals and saving money. The majority of users think these sites make price comparisons easier and quicker to complete as they no longer need to ring numerous providers and provide the same details multiple times. It allows them to make an informed choice as they can easily compare deals in a structured manner. Some believe that the sites also show a wider range of product providers while others think they bring more freedom to do their research when it is convenient for them. Many also believe they are now more questioning of their deals since they can look at competitors offers. Indeed, most (83 per cent) PCW users visit more than one site in the comparison process. Their main reasons for using multiple sites are to make sure they get the best deal (61 per cent) or to compare or verify the comparison results (42 per cent). The comparison process often also continues offline, for instance with phone calls to current or alternative suppliers. iv Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Consumers expect PCWs to be accurate and reliable, as well as easy to use, with half of consumers (52 per cent) specifying getting accurate and reliable information as one of the three factors that is most important to them when they use a PCW. Generally, consumers are satisfied with the sites they have used. Over half (57 per cent) rate PCWs they have used in the past as excellent or very good in terms of ease of use, and half (52 per cent) think they have been useful in helping the user to find a good deal.Consumers are happy to switch insurance providers using PCWs. They believe there is little to gain from being loyal to their current provider, and also consider switching via PCWs to be fairly easy. Consumers have started to switch utilities providers more in recent years and to some extent, this is due to PCWs, since these sites are seen to have put more pressure on the companies by providing consumers with more information about competitors prices. Furthermore, some PCWs facilitate switching between providers, by making it easy to purchase products or services directly through the comparison sites and generally reducing the inconvenience and delays related to switching. Over half of consumers (52 per cent) have used PCWs to switch providers or purchase products directly, predominantly with car insurance (77 per cent of those who have used a PCW to switch). Over a third have switched electricity or gas, or home insurance (37 per cent of those who have switched respectively) via a PCW. The data suggests that PCWs facilitate supplier switching with utilities companies in particular: almost half (46 per cent) of people using PCWs for gas or electricity think they are excellent or very good and, on average, give them a score of 7.1 out of 10 on this measure.The main barrier to switching or purchasing directly via PCWs is that consumers want to speak to their current provider before switching, often to see how the land lies with their provider, or specifically to bargain. Almost two-thirds of consumers (63 per cent) give this reason. Some (27 per cent), however, simply prefer to purchase off-line. Half of all consumers (51 per cent) have not used a PCW in a regulated market (this includes non-users of PCWs) in the course of the last two years.2 These consumers feel they still make an active comparison. Nearly half of the non-users of PCWs (44 per cent) seek information and recommendations from friends, family or neighbours, almost a third (29 per cent) telephone a number of providers and around one quarter (26 per cent) rely on advertising. While the proportion who telephone providers is relatively stable across the different markets, likelihood of seeking others advice varies a little. While around half ask for recommendations about a TV service or mobile phone deal (53 per cent and 49 per cent respectively), slightly fewer consult friends, family or neighbours about deals on electricity or gas (42 per cent) or insurance (37 per cent). The main reason for not using PCWs is a preference to talk to someone in person (23 per cent of non-users). A minority have had a negative experience, or have negative perceptions of PCWs: 15 per cent are put off using sites because they think they are too complicated to use. The majority of consumers (87 per cent) who dont use PCWs are confident they are getting the best deal for their needs without one. When comparing themselves to PCW users, nearly two fifths of non-users (38 per cent) say they get a better deal offline, while almost a third (29 per cent) think they get the same deal as those using PCWs. 2 Of consumers who have used PCWs in the past two years, almost eight out of 10 (79 per cent) have used PCWs when investigating deals for products in regulated markets only. v Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 1.5Consumer trust and understanding of price comparison websites operating models The majority of consumers using PCWs (94 per cent) consider these sites to be either very (21 per cent) or fairly reliable (73 per cent). Consumers who have never used PCWs are more suspicious with one in 10 (11 per cent) mentioning spontaneously that they would not trust the results provided by these sites.Generally, consumers assume that comparison results are ranked by price and, consequently, they are often confused if ranking is based on other criteria, such as how much of a saving each search result offers them, when compared with their current deal. However, many consumers are interested in accessing alternative ranking criteria, as well as more filters, to limit the number of options they work through. Where results are ranked by price, consumers often distrust the cheapest results that appear at the top of the list. They seek value for money, rather than the cheapest deals, which will tend to be from less well-known (and less trusted) providers.Although consumers generally trust the PCWs that they use, many are in the habit of verifying results on other sites or on the phone, out of the instinctive belief that the sheer volume of information online makes fact-checking necessary. Findings from the qualitative research suggest this is because consumers have more concerns about buying through a middleman such as a PCW, rather than directly from the provider.Consumers are unsure about how PCWs operate and how they make a profit, with many never having considered this before discussing it during the research. Most consumers have never considered whether product providers pay PCWs to influence comparison results or positions in rankings. However, when asked directly, most consumers think this is possible. Half of consumers (51 per cent) in the quantitative research are either certain (23 per cent) or had suspected (28 per cent) that some providers can pay to get better rankings. Although nearly half of these consumers (43 per cent) say this has a strong (20 per cent) or slight (23 per cent) influence on their choice of PCW, most (56 per cent) say it does not influence them. This is simply because they are pragmatic: they say they understand that money will change hands behind the scenes without them being aware, and that they appreciate the site operators need to make money somehow. Among the consumers, who say they either knew or suspected that providers can pay to influence rankings, three-quarters think that at least half of providers do this (74 per cent). Awareness of voluntary accreditation schemes for PCWs is very low, with only 16 per cent of consumers who have used a PCW in the last two years aware of these schemes. Many of those who are aware of accreditation schemes say they influence their choice of website: four in 10 (36 per cent) say it does so a little, and one-third (34 per cent) that it has a strong influence on their choice. Among those not aware of voluntary accreditation schemes three-quarters (76 per cent) say that they would be either 'slightly' (38 per cent) or 'strongly' influenced (38 per cent) by these when choosing which PCW to use in the future. Consumers already place a high level of trust in PCWs, and they do not actively seek out accredited sites. However, they see accreditation as providing an extra level of reassurance, conferring legitimacy and instilling confidence and trust in the information generated by PCWs.The vast majority of consumers (84 per cent) who are not aware that independent accreditation schemes exist would trust some kind of independent body to run such a scheme. A third of these consumers (35 per cent) would most trust a regulator such as Ofgem, Ofcom or the Office for Fair Trading (OFT) to run this, and a further third (35 per cent) would place most trust in a consumer organisation, like Which? vi Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 1.6The future for price comparison websites The research tested a number of new forms of PCW, including collective switching sites, data analyser services and price comparison mobile apps.Collective switching intermediaries Collective switching intermediaries offer websites that allow consumers to register their interest in taking part in a group switch, and then combine registrants into a block of market share. The intermediary then looks to leverage the power of the group, by inviting electricity and gas providers to compete for the groups custom by offering a deal that would be available to all who have registered. The intermediary then relays the winning deal to all participants, alongside a comparison of how much they would stand to save, and manages the switching process for all who choose to accept the deal. Around one in 10 consumers are already aware that collective switching exists. Their initial reaction is often positive because collective switching promises savings. For some, collective switching also represents a way to make a stand against powerful energy companies, while others respond positively to the idea of community spirit. The concept also raises a number of reservations and questions in consumers minds. They are unsure about how exactly the scheme works and how binding registration is, and are unclear about whether they are obliged to accept the offer given. Some consumers react to collective switching more negatively. They worry that their personal data may be misused, and feel wary about sharing data or having to recruit other people. Some also worry that joining a collective undermines personal control. A few worry that the deal that is offered will not be sufficiently tailored to their own needs.Data analyser service Data analyser services analyse detailed data about consumers consumption patterns to recommend a deal that is suited to their usage profile. Just over half of consumers in the qualitative research say they would be quite likely or very likely to use a service like this. Consumers, who are positive about the concept of a data analyser service, like the fact that the tool does the comparison work for them and provides a recommendation that is tailored to their usage profile. They think this is likely to save them money. However, even among the more interested consumers, there are concerns about privacy and, in particular, about sharing of personal and usage data with other product providers, without their knowledge or permission. They also have reservations about whether the tool considers contractual tie-ins.While under half of consumers say they are unlikely to use a data analyser service, the main barrier for consumers is their wish to protect personal and usage data, and preference for staying 'in control' of the research process. Some also feel that inputting usage data and using such a tool is time-consuming and inconvenient.Price comparison apps Some price comparison providers are beginning to develop mobile applications to allow people to access their services on the move. While most consumers, who own a smartphone use apps, they are unsure whether they would use dedicated price comparison apps in practice. Approximately half say they are 'very likely' or 'quite likely' to use a price comparison app. vii Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Consumers, who are positive about apps, are often heavy mobile internet users, and they value the convenience that apps offer. Those saying they are unlikely to use price comparison apps feel that comparing is something they cannot do on the go either because their mobile phone has a small screen that would make the process difficult, or because they prefer to make price comparisons when there are no distractions. Other, more minor, worries include privacy concerns around ad-tracking, not having the required information to hand at the time, and fear of what might happen to the data the user has entered if the handset is lost or stolen.Interest in an alternative price comparison service There is interest among consumers towards having an alternative comparison tool3 that would allow them to compare offers and get advice on best deals. In our quantitative study six out of 10 (60 per cent) say they would definitely use (25 per cent) or would consider using (35 per cent) such a service. Although it was made clear the service does not need to be online, appetite for an alternative price comparison service is markedly lower among those who have never used PWCs (28 per cent). Consumers show most interest in a comparison service for utilities or insurance (64 per cent) compared to TV services (40 per cent), broadband (54 per cent) and mobile phones (46 per cent).In terms of the format of this service, the two main preferences among those who would consider using it are for a telephone (32 per cent) or online service (30 per cent). Around a quarter (22 per cent) would prefer a face-to-face service.1.7ConclusionsFor a high proportion of consumers, PCWs form part of the usual decision-making process and, in particular, for insurance products, gas and electricity. Most consumers are aware of PCWs and the majority of these are able to name at least one of the Big Four PCWs. More than half of all consumers have actually used PCWs in the last two years. Advertising has a strong influence on the PCWs that consumers use, so it is unsurprising that the Big Four sites dominate also in usage.Consumers main concern about providing personal details is that doing so will result in unwanted communications. PCWs occupy a position of trust in consumers minds. Most feel that the information they access through price comparison websites is broadly reliable, and they address any concerns about reliability by consulting multiple PCWs, or by verifying information directly with providers.Internet and PCW users show interest in other kinds of price comparison service that would allow them to compare offers and get advice on the best deals available, and have a strong preference for these alternatives to be offered online. Consumers are interested in collective switching and data analyser services to some extent but there are questions about mechanics of how these would work in practice. The main concerns relate to how binding the commitment would be, and to issues of data privacy. 3 Consumers who participated in the quantitative survey were allocated a product or service category that they had previously confirmed they had bought or renewed in the previous two years, and asked, How likely are you to use a price comparison service which would allow you to compare the offers and get advice on the best deal available for [category]?This does not need to be an online service. They were asked to pick the most appropriate response from I would definitely use this, I would consider it, I would possibly consider it if recommended to me by someone I trust and I wouldnt consider it. viii Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Consumers are less likely to be interested in price comparison apps than in the other alternatives discussed. This disinterest is typically driven by a perceived lack of need to compare prices on the go. Non-users of PCWs show less interest in accessing these kinds of service.Most consumers perceive PCWs to be convenient, useful tools that work in their favour. They save consumers time and effort, helping them to take more effective action in making purchasing decisions, and ultimately to secure good deals on products and services. Many consumers feel that they are empowered by using PCWs and have more leverage over the providers they use compared to before these sites became mainstream.Some consumers struggle with sites particular physical features, such as confusing layouts and small fonts. Consumers also react negatively to sites that dont allow them to customise or tailor their search to the degree that they want to. On the other hand, PCW users prefer sites to provide a lot of information about the product or service that is being compared. While they want brief, straightforward questions to generate a fast comparison, they want to feel the sites cater to their situation. Many consumers have never thought about how PCWs make their money, but the majority are very ready to believe that providers can (and do) pay PCWs in order to influence comparison results.However, more than half of those who believe that this happens say that it would not influence their choice of PCW. Many admit that they dont mind how the sites make their money, as long as they see an improvement on their current providers offer. Following some guiding design principles would make PCWs more user-friendly:a simple, clear and visible system of menus a minimum font size for text clearly identifiable and clearly formatted buttons and other navigational tools readily accessible explanation of terms and other key information clearly identifiable advertising, where this is present on the site. Sites need to strike a balance between a fast fact-finding process and sufficiently detailed search that ensures consumers are confident that the product fits adequately with their needs. The results of the comparison need to show the consumer sufficient information about the deals, while keeping the content concise and simple. Key to this is the ranking of results, which must be clearly communicated. Some consumers voice a desire to manipulate the results by applying different filters. As many consumers estimate their current spend or usage, the sites could remind consumers that any comparisons, or anticipated savings, may not be fully accurate. Relatively few consumers who have used a PCW in recent years are aware of voluntary accreditation schemes, although their general view is that these schemes provide an additional form of reassurance and improve confidence on the information on PCWs. Consumers see bodies such as regulators, Which? and the Citizens Advice Bureau as being suitable organisations to represent their interests by accrediting sites. Consumers using an accredited PCW rarely notice accreditation; the genuine importance they attach to it may be more limited than they say it is. 1.8RecommendationsThis research highlights several ways in which PCWs could make changes to improve the user experience, and to allow consumers to make more effective decisions when making price comparisons. In summary, these are: ix Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 addressing transparency issues, including a clear distinction between sponsored or advertised links, and ranked search results addressing usability issues such as adding filtering options to enable more effective interpretation of search results improving clarity around ranking of results raising awareness of existing accreditation schemes, which is currently low more effective advertising of collective switching sites and next generation PCWs, where awareness is again currently low (although this is likely to be at least in part linked to next generation tools newness) addressing concerns related to privacy, particularly concerns about contact details being passed to third parties, and resulting in unsolicited communication. There is scope for further research to increase understanding of the way consumers view and act on accreditation of PCWs. This research shows that awareness is currently low, and that consumers rarely notice sites accreditation, despite many saying that they value it. Moreover, PCW users tendency to interpret deals as good and appropriate for me, without taking into account their own usage and consumption behaviour, could be seen to highlight the need for best practice in the way sites select and display available deals.More generally, further research would allow evaluation of the areas of best practice that this research has identified, where they were implemented.Additional research among non-users of PCWs would allow greater understanding of their reservations in engaging with price comparisons, whether online or offline. In our view, older consumers, in particular, are less willing than existing PCW users, to communicate or negotiate actively with the providers they use, and may not even be aware that this is possible. Consequently, some people miss out on the best deals systematically. Therefore, raising awareness of the cost implications and support needs of these consumers is important. 1 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 2.Background and objectives This chapter provides an overview of the background to the research carried out for this report, explaining the rationale and context in which it was seen important. It also sets out the research objectives set as goals for this research.2.1About Consumer Futures Consumer Futures represents the interests of consumers across essential, regulated markets. It uses 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 United Kingdom, for energy consumers across Great Britain and for water consumers in Scotland. It maintains the powers, responsibilities and duties of Consumer Focus.In April 2014 Consumer Futures will, subject to Parliamentary consent, become part of the Citizens Advice service.2.2Background Global internet protocol (IP) traffic on public and private networks is expected to increase fourfold between 2011 and 20164, with around 45 per cent of the worlds population online by that time5. In the UK in 2012:seventy six per cent of households had fixed or mobile broadband access, and households had an average of three types of internet-enabled device following a doubling in ownership between August 2010 and February 2011, smartphone penetration was higher than in other European countries, and four in 10 adults (39 per cent) owned a smartphone one in 10 households (11 per cent) owned a tablet computer, and one in six (17 per cent) intended to purchase a tablet in the next year.Research by Civic Consulting (2011)6 and Ofcom (2011)7 has identified the UK as having one of the highest proportions of online shoppers in Europe. The former reported that 71 per cent of UK adults were frequent online shoppers, the latter that 82 per cent of UK consumers used their internet connection for shopping. Although in February 2012 shopping carried out online represented only 11 per cent of the UKs retail revenue8, the value of online retail sales had increased by 0.6bn from February 2011, compared with an increase of only 0.1bn in high street stores. 4 Cisco (2012) Cisco Visual Networking Index: Forecast and Methodology, 2011-2016 [Online]. Available from: http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-481360.pdf. [Accessed: 07.06.13] 5 Cisco (2012) Cisco's VNI Forecast Projects the Internet Will Be Four Times as Large in Four Years [Online]. Available from: http://newsroom.cisco.com/press-release-content?articleId=888280 [Accessed: 07.06.13] 6 Civic Consulting (2011) Consumer market study on the functioning of e-commerce and Internet marketing and selling techniques in the retail of goods [Online]. Available from: http://ec.europa.eu/consumers/consumer_research/market_studies/docs/study_ecommerce_goods_en.pdf[Accessed: 07.06.13] 7 Ofcom (2011) International Communications Market Report 2011 [Online]. Available from: http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr11/icmr/ICMR2011.pdf [Accessed: 07.06.13] 8 Ofcom (2012) International Communications Market Report 2012 [Online]. Available from: http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr12/CMR_UK_2012.pdf[Accessed: 07.06.13] 2 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 In addition to the general increase in broadband penetration discussed above, existing research identifies several reasons for the increase in online purchasing among UK consumers, including: the convenience of shopping from home9 consumers increased confidence in online shopping10

the ability to carry out fast price comparisons11 the ability to secure cheaper prices than in physical shops12

high rates of credit card ownership13 high levels of trust in online payments14 the historical prevalence of catalogue shopping15

the early launch of major online shopping services16. This anticipated continued growth in internet use and online shopping highlights the role of price comparison websites (PCWs); online tools that consumers can use to assess the options available to them while shopping online, and to view different prices for specific products and services. The sites can help to simplify purchase decision-making by compiling and organising information from several sources, in a way that allows consumers to understand easily the deals that are available to them. Research conducted by the Office of Fair Trading (OFT) in 201017 showed that more than eight in 10 consumers (81 per cent) had ever used a PCW, and that three-quarters (73 per cent) had used one in the last year18. Civic Consulting (2011) found that 81 per cent of consumers had used a PCW in the course of the previous year. This research, which compared 27 European countries, found that of these, the UK had the highest number of PCWs: 30 PCWs versus 22 sites in France and 19 in Germany.While PCWs have the same general purpose, there are differences in the way they function. Some are dedicated to a specific service area, such as energy, while others offer price comparisons across a wider range of services. The ability to tailor searches according to individual needs also differs, with some PCWs allowing greater customisation than others, based on personal profiling or consumption data. Price comparison sites also differ in the way they gather information and their approaches to revenue generation. 9 Civic Consulting (2011). 10 Ibid. 11 Ibid. 12 Ibid. 13 Ofcom (2011).14 Ibid.15 Ibid. 16 Ibid. 17 OFT (2010) The consumers view of the Advertising of Pricing: Final Report, Annexe H [Online]. Available from: http://www.oft.gov.uk/shared_oft/market-studies/AoP/Annexe-H.pdf [Accessed: 07.06.13] 18 Note that this research was carried out using Ipsos MORIs online access panel. The survey sample therefore didnt include members of the offline community. The under-representation of some demographic groups was controlled for by weighting the final data to match the socio-demographic profile of Great Britain. 3 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Some source information directly from providers by arrangement; others gather information independently from providers sites. Similarly, some rely on revenue from advertising, while others earn this on a commission basis, when consumers switch providers as a direct result of using the PCW. The impartiality and reliability of PCWs and the accuracy of the information they present to the user, have been highlighted in the recent research noted here, and are of particular concern to consumer bodies. Civic Consulting (2011) found that some PCWs did not provide adequate information about delivery costs, delivery times, taxes or availability, and that information about default ranking was sometimes not presented to users clearly, or with sufficient choice. The research also reports a lack of information about payments that traders could make in exchange for ranking placements and listings. Consumer Focus research published in 2013 reported the findings of a mystery shopping exercise carried out on a total of 99 UK PCWs19. The research found that PCWs are a useful platform for consumers to use in making basic searches, that they display a high proportion of relevant search details, and that they usually provide accurate information about products availability. However, a key finding of the study was that PCWs did not guarantee purchase savings: in fact this was true in only 21 per cent of cases. Moreover, the Consumer Focus research highlighted that not all PCWs allow users to make customised, personalised searches, and that some sites lack clarity on costs: many dont disclose booking fees or termination charges, for example, while others automatically add supplementary charges such as product insurance.A web sweep of 55 PCWs by the OFT in 2012 identified scope for improvements in the presentation of search results, in the identification of the businesses operating individual websites, and in privacy policies and complaints procedures20. To address concerns over accuracy and reliability of information, the OFT has written to 100 leading PCWs asking them to ensure they are providing clear information to consumers21. The energy regulator Ofgem has also launched an investigation of PCWs and switching sites, to ensure the information these sites provide to consumers is transparent and not misleading22.Research evidence exists, therefore, about the accuracy and reliability of the information that PCWs provide, and there is concern among consumer bodies about these sites. Evidence is more limited, however, about the experiences and perspectives of consumers themselves. Consequently, it is difficult to recommend strategies that consumers can apply, in order to use comparison sites wisely. Ofgem (2012) has found that consumers level of trust in PCWs differs by service sector, and is higher for energy, travel and insurance comparison sites than it is for mobile phones or other financial products23. This research also reported lower awareness among consumers of PCWs specialising in energy comparisons and switching. 19 Consumer Focus (2013) Comparing comparison sites: Price comparison website mystery shopping report [Online]. Available from: http://www.consumerfocus.org.uk/files/2013/01/Comparing-comparison-sites.pdf [Accessed 20.03.13] 20 OFT (2012) OFT advises price comparison websites how clearer information can improve consumer trust [Online]. Available from: http://www.oft.gov.uk/news-and-updates/press/2012/113-12 [Accessed: 20.03.13] 21 Ibid.22 Utility Week (2012) Ofgem launches probe into price comparison websites [Online]. Available from: http://www.utilityweek.co.uk/news/news_story.asp?id=197743&title=Ofgem+launches+probe+into+price +comparison+websites [Accessed: 07.06.13] 23 Ofgem (2012). Consumer engagement with the energy market: information needs and perceptions of Ofgem [Online]. Available from:http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/Consumer%20 4 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Since 2009, Consumer Focus has managed a voluntary accreditation scheme for domestic online energy price comparison services, known as the Confidence Code. The objective of the Confidence Code is to implement and maintain standards that inspire consumer trust in PCWs focused on the energy market. As a consumer watchdog, it needs to be able to advise consumers on the accuracy and reliability of price comparison websites. Understanding consumers perspectives on PCWs in more detail, and their experiences as users, will allow Consumer Focus and other bodies to be able to better advise them on how to use PCWs in the most beneficial way. A deeper understanding will also ensure that recommendations regarding improvements or changes to PCWs are truly reflective of consumers needs.2.3ObjectivesThe overall aim of this research is to explore consumer experiences of price comparison websites in terms of awareness, trust and confidence, user behaviour, accessibility and usability, and potential concerns. The research will allow Consumer Focus to advise stakeholders on consumer concerns regarding the use of price comparison websites, specifically websites covering the regulated markets and, ultimately, to set best practice for such sites. The research represents the views, experiences and understanding across the whole population, including not only heavy internet users and those who are most comfortable using the internet and online services, but those who dont use the internet at all, and those who have some experience of the internet, but none of PCWs. It looks at the consumer journey from the beginning to understand initial awareness, usage patterns and experiences of usability. This will provide insight into how and why consumers use PWCs, evidence which will prove useful in helping to assess and improve the websites functionality, ensuring that they are easy for consumers to navigate.The research also covers broader concepts such as trust in PCWs, their overall impact, and attitudes to new developments among price comparison models. These will help to contextualise findings and also identify further issues that may need to be addressed to make consumers feel more at ease.The specific research objectives are as follows:profile consumers to understand who are users and non-users of PCWs test consumer awareness of PCWsexplore how consumers find out about price comparison websitesassess why consumers use PCWs, what purpose they serve, and how often they use them assess levels of use across different service sectors find out the extent to which consumers consult PCWs when considering switching between service providers understand whether consumers verify results from PCWs in any way gauge perceived ease of PCW use assess perceived usefulness of PCWsassess consumer understanding of functionality, in terms of how information is sourced and how revenue is generated

engagement%20with%20the%20energy%20market,%20information%20needs%20and%20perceptions%20of%20Ofgem.pdf [Accessed: 07.06.13] 5 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 test consumer understanding of rankings on search resultsunderstand consumers level of trust in PCWs, whether they have concerns about using these websites, and what these concerns are gauge consumer awareness of accreditation schemes for PCWs understand the impact of PCW use: whether this has influenced consumers shopping around and switching behaviour, and how assess consumer interest in a PCW service that would advise them on the best deal and manage the process on their behalfestablish whether consumers who are not heavy internet users would want to obtain the information from PCWs in any different ways (printed version, over the phone). 6 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 3.Methodology This chapter provides a short summary of the research methodology, including the methods used and achieved sample sizes. Full details about the research methodology can be found in Appendix A.3.1Research design and target audience In light of the number and nature of the aims and objectives of this research, a mixed methodology design was used. This consisted of three elements: a nationally representative telephone survey a consumer usability exercise with price comparison websites (PCWs), undertaken via hall tests qualitative face-to-face interviews among consumers (who also took part in the usability study) to obtain a better understanding of attitudes to PCWs. The quantitative survey involved a nationally representative sample ofGreat Britains 18-plus population. The usability hall tests and depth interviews were carried out among a more specific target audience, consisting of consumers who use the internet to some extent, and are responsible for researching or buying at least one of the specified products. The products covered in the scope of the usability tests and depth interviews are fixed broadband, electricity, home insurance, travel insurance and mobile phones. 3.2Quantitative survey The quantitative survey consisted of 2,000 structured interviews. The interviews were conducted using computer assisted telephone interviewing (CATI) using Random Digit Dialling (RDD). Of the telephone numbers called, 12.2 per cent were mobile telephone numbers and 9.2 per cent of the total interviews completed were on mobile telephone numbers. To ensure that the full range of age groups, gender, geographic locations and socio-economic grades (SEG) were captured, in line with the nationally representative population profile, a series of soft quotas were incorporated. The soft quotas were monitored continuously and the sample was stratified by geographic area to assist in the monitoring of interviews achieved.Interviews were carried out between February 22 and March 17, 2013, including evenings and weekends. On average, interviews lasted 20 minutes.To make the data representative by age, gender, region and SEG, the data was weighted using Random Iterative Method (RIM) weighting. Weights were calculated separately for age, gender, region and SEG. These weights were then applied to the data with each weight applied separately to each individual case.After weighting, the sample for Scotland and Wales contains significantly more consumers in socio-economic grade E, than for England. It is important to bear this in mind when comparing differences across nation/region as differences in Scotland and Wales may be heightened due to the increased number of consumers in socio-economic grade E. This is reflected in some of the quantitative survey findings in this report; significant differences observed in Scotland and Wales often correspond to significantly different data for socio-economic grade E. We highlight where these significant differences occur together.3.3Semi-structured usability hall tests A total of 197 consumer usability hall tests were conducted. The hall tests took place in five locations across Great Britain: Watford, Cardiff, Birmingham, Newcastle and Glasgow. 7 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 The hall tests consisted of a qualitative observational and interactive task, in which consumers were asked to search for a new deal using a PCW. Consumers were allocated to one of the following product categories: fixed broadband, electricity, home insurance, travel insurance or mobile phones. All consumers were responsible for researching and/ or paying for the product category which they were allocated to. After being allocated a product category, consumers were assigned one PCW, which they used to look for a new deal for their allocated product category. The websites tested included the Big Four, industry-specific and next generation comparison websites, along with other PCWs that cover multiple product categories. Due to the number of product categories that the Big Four cover, and in order to avoid biasing the results of the research towards these four sites, one product category was excluded from each of the Big Four.To ensure that the discussion could focus on PCWs usability (rather than the internet more generally), all consumers had some degree of direct experience and familiarity with the internet. All consumers taking part in the usability hall tests fell into one of the following three categories: heavy internet users (people who use the internet on a daily basis for at least two activities, and at least monthly for at least two of: managing finances, managing utilities, researching products and services, booking travel and online shopping) light internet users (people who use the internet, but dont match the description of heavy users, and have used a PCW before)non-users of PCWs (people who use the internet, but have not used a PCW before). The hall test entailed the consumer looking for a new deal for the allocated product category on the assigned PCW, before continuing to consider PCWs more generally.3.4Depth interviews After completing a usability hall test, 63 consumers took part in a 30 minute face-to-face depth interview. Recruitment to the depth interviews was dictated by the following quota criteria: age gender SEG internet user type (heavy user, light user or non-PCW user). The depth interviews investigated in more detail consumer awareness, usage, experiences and views on PCWs. 8 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 4.Purchasing and comparing prices for products and services This chapter describes how consumers use the internet in general, and more specifically in making purchase decisions. It describes the users of price comparison websites (PCWs) as well as those who dont use them. It explains which sites consumers are aware of, which ones they use and how often they use PCWs. It also provides insight into what they use these sites for.4.1Using the internet The majority (84 per cent) of consumers are internet users. Fewer women (80 per cent) use the internet than men (88 per cent).Access is highest among the 18-29 and 30-44 age groups, where almost all (99 per cent in each group) are internet users. Access levels fall as age increases, with two-thirds (68 per cent) of those aged 60-74 having internet access, and just over a quarter (28 per cent) of those aged 75 or older reporting that they use the internet.

Figure 4.1: Internet access 9 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Socio-economic grade E contains significantly more consumers who dont use the internet than other grades, with less than half (45 per cent) of them using the internet. This is linked to the high number of 60-74 year olds and those aged 75 or older who dont use the internet. Of the 109 consumers who are aged 60+ and are in social grade E, almost eight in 10 (78 per cent) dont use the internet. Figure 4.2: Internet access by socio-economic grade Significantly more consumers in Scotland (23 per cent) are non-users of the internet than in England (15 per cent), while the proportion of consumers in Wales who dont use the internet lies between the two (19 per cent). These data are in line with findings from Ofcoms (2011) communications survey24, which report that, in 2011, England had the greatest number of broadband connections followed by Wales and then Scotland. Consumers access the internet from a variety of settings. Eight in 10 (84 per cent) do so via a computer, laptop or tablet. These devices are used principally at home (80 per cent), though two-fifths (43 per cent) are accessing the internet via computers at work or at a place of education. Around a quarter of consumers (27 per cent) use friends or neighbours computers or tablets, while one-fifth (20 per cent) use public-access computers, such as those in libraries.Half of consumers (52 per cent) go online using a mobile device, such as a mobile phone, PDA or BlackBerry, and a quarter (24 per cent) using a TV set or games console. 24 Ofcom (2011) The Consumer Experience 2011 [Online]. Available from: http://stakeholders.ofcom.org.uk/binaries/research/consumer-experience/tce-11/research_report_of511a.pdf [Accessed: 07.06.13] 10 Date Last Edited: 4 July, 2013Checked By: KD, KA, APDate Checked: 26.4.13 Figure 4.3: How consumers access the internet The 84 per cent of consumers who use the internet is broadly reflective of 2011 data from the Office for National Statistics (ONS), which reports that 77 per cent of households had an internet connection at that time25. We should note that a small proportion of consumers (two per cent) in our survey only access the internet outside the home (at work or at university, for example), and that a handful (less than one per cent) only access the internet using a mobile phone.A large majority of the consumers, who participated in our hall tests, had regular internet access, and almost all of those, who didnt have regular access, were aged 60 or above. What consumers use the internet for Consumers engag