eBay is huge. He has 170 million users who can choose from 1.1 billion products. By the number of offers it is the biggest seller on the Internet. But the other day, after the publication of the quarterly report, investors seem to have completely lost faith in the company. Sales from her every year grow less and less, and debt, on the contrary, increases, reaching $ 10 billion in October. The fact is that the online auction model failed and was not needed by anyone. Nobody will ever buy half of the goods put up for auction, and the site is wasting money on maintaining hundreds of millions of pages. In secret, the firm’s executives admitted that eBay hasn’t been making money from its auctions for a long time. Today, 88% of products on the site are sold with the tag "Buy It Now", that is, according to the scheme of any regular store. Of these products, 81% are new, never used.
And yet the site for several years can not get rid of the image of the seller of used goods, and gradually gives way to competitors. eBay is determined to fight, investing any money in development and fundamental changes. The confrontation with the main enemy, Amazon, can go so far that the main online auction itself goes under the hammer.
Amazon has “only” 400 million of goods, almost three times less than eBay, and yet they account for half a billion buyers. The audience involvement is higher, and Amazon has 183 million monthly visitors (compared to 96 million from eBay, 87 million from Wal-Mart and 62 million from Apple). eBay is still the second Internet store, but sites like Etsy are quickly catching up. The company fears that the process will soon become irreversible. And in recent months, she decided to show what she can do. We receive eBay packages to Pochtoy every day, and we notice changes on our own. Therefore, we hasten to tell.
Be in trend
The future of Internet services is in the hands (or rather, in the eyes and wallets) of young people. That is why Snapchat, which annually loses $ 515 million, is estimated at $ 25 billion: in a few years it will be one of the main platforms among new solvent customers. The management of eBay sees its problem in that the online auction did not become in demand among the “millenial” and “generation Z”. They simply ignore the site, and the purchases themselves are increasingly made on the links from the FB. Susie Deering, head of eBay marketing for the past two years, told about this in an interview:
The problem is not even that they have a distorted perception of eBay, the problem is that they have no perception. They don’t even remember us.
To prevent eBay from going to the dustbin of history, Susie sees two tasks for the company. First, distance yourself from Amazon, show that in some ways eBay can be better. Secondly, get rid of the image of the "auction-landfill" for used things. These tasks often conflict with each other. The more eBay tries to look like an ordinary online supermarket, the more often it is compared with the brainchild of Jeff Bezos. And on its own field, Amazon has never lost.
eBay vs Amazon
The stories of two major online shopping sites in the United States are linked from the time of their birth. In 1995, young programmer Pierre Omidyar over the weekend wrote code for a p2p trading platform, which he called AuctionWeb. He did not plan to earn money on it, but things started to turn out, and after three years the company, having renamed eBay, publicly placed its shares, making Pierre a billionaire.EBay headquarters in San Jose
Amazon started two months earlier: Jeff Bezos opened the site from his garage in 1994. Shares she also posted in front of eBay, in 1997. And if Omidyar conceived his website as a utopia, where every seller can find his buyer, then Amazon began to play the role of mediator from the very beginning. eBay did not help customers, it only connected them. The dishonest sellers were “fished out” by the users themselves - through ratings and reviews. At the dawn of the Internet, such a model seemed convenient and understandable, but when it turned into a big business, it turned out that it was easy to operate. Amazon, from the very beginning, was selling goods from its own warehouses. Employees could check whether the item was removed from the packaging, track the unscrupulous seller, refund the money to the unlucky buyer. eBay quickly got a base, because anyone could open an account there and start a business out of the blue. But by the early 2000s, Amazon had gained a reputation as a more stable and secure place to shop. And where customers go - go there and sellers.
In 1999, Amazon earned three times as much as eBay. At the same time, Time magazine recognized Bezos as the man of the year and put his photo on the cover. eBay earned hundreds of millions, but they criticized the online auction, saying that it doesn’t offer anything “its” and its business model can be easily copied. And so, in November 2000, Amazon Marketplace is coming out. A place where third-party firms can put up for sale new or used goods. In fact - the same eBay, but on a more solid and recognizable site.
Battle of David with Goliath
Over the past 17 years, Amazon Marketplace has grown many times. Personally, almost a quarter of all orders from the United States go to us at Pochtoy.com . And half of all sales in the world's largest web supermarket are not from personal stocks, but through the Marketplace. Over the year, 2 billion goods are bought in this way, and 10,000 sellers receive $ 132 billion in profits. This is an order of magnitude greater than that of the "auctioneer".
eBay, of course, remains a very rich company. At one time, she bought PayPal and Skype, got a stake in Craigslist, invested in dozens of successful online projects. She still has enough money. But the flagship site is gradually losing users. If Amazon Marketplace has about 1000 new sellers every day, then eBay has been treading around 20 million for several years. For some other store, this would be a dream figure, but for a site that wants to compete with one of the five richest companies on the planet, this is not physically enough. Amazon is worth about $ 500 billion, eBay in its current position - $ 40 billion. This is not the threefold difference, as before. Now, if you wish, Bezos can swallow a competitor and not even feel it.
Gunpowder in the old dog
eBay has been trying to catch up with Amazon for many years. The goal seems unattainable, but the company does not give up. In some aspects, it has advantages. For example, she has always been a leader in “targeted shopping”: when a customer comes to the site in search of a very, very specific thing. On eBay everything is on sale, without restrictions. Cities, celebrity autographs, air with someone's sneeze, luxury airplanes, brands, a slice of pizza with the face of Madonna and even girlish innocence . From here - interesting news stories and curiosity of buyers, evaluating what's new.
The big drawback of eBay as a store was its lack of organization - the lack of sections with specific categories of goods. Now, trying to avoid falling sales, the marketplace is beginning to change. Content from 2015 has a context. The product is filtered by brands, colors and materials - for example, a new page with handbags or with calendars for Advent . The head of eBay, Devin Wenig, told investors that a special script is responsible for creating such pages. He finds the parameters by which products can be combined, and creates landing pages for them. Over the past year, eBay has created 180 million (!!!) of such pages. With the attraction of new customers, they are not helping yet, but they began to browse the store more often and “deeper”.
Another interesting feature that the site promises to present by the end of this year is called "Similar Topics." The eBay home page will show those products that customers viewed with similar search history. Such a thing is present on Amazon in the form of a section “buyers who bought this product also bought ...”, but David Wenning says that their algorithm will work even better.
Another novelty designed to revive the site - pages with "interests." Also expected this winter. Over time, evaluating the user's preferences, eBay will automatically be able to offer items from certain categories to customers. There are 250 such categories in total, starting from skiing and yoga and ending with dogs, the “Game of Thrones” or minimalism. Responsible for the selection of "interests" will be the machine learning algorithm, cluster analysis , which is already used by Twitter, Netflix and Spotify.
In September, eBay added a heart-shaped button to the site that can add products, brands, or merchants to a wish list. This put the site on a par with Facebook and Instagram, which this year are doing everything
to turn from social networks into marketplaces and get their users to fork out.
This summer, eBay has added a visual search tool. Buyers can take a picture of the thing they met on the street or in a supermarket, upload it to the site, and find the most similar product. In the spring, the site announced that it would synchronize prices with Amazon, Walmart and Best Buy. In other words, eBay guarantees customers that it will have no higher value than its competitors. Prior to this, only Amazon could have organized such a system. Since the beginning of the 2010s, the store has a powerful proprietary algorithm that analyzes prices on the Internet and ensures that buying at Amazon will be beneficial to the customer. Otherwise, the product is not shown in the search field, and the seller, who put it at a price above the market, is physically squeezed out of the site. eBay has become another company that has decided on such a move.
And, of course, eBay can compete with Amazon in terms of sales of used goods. Here, the cheapest refurbished devices are iPhones from $ 200 and MacBooks are $ 300- $ 500 cheaper than competitors. The store is convenient for sellers and shifts responsibility for the delivery to them, which helps to reduce prices for warehouse services. Devices that are cheap, on eBay are often more profitable: commissions are lower here than at Amazon, and unreliable sellers are cut off due to the rating and the level of "customer satisfaction". eBay is a much less formal platform than Amazon, and therefore it sells both very old products that are not found anywhere else, or new gadgets that have just appeared in the hands of resellers.
For eBay (quite rightly), the reputation of the “second-hand store” was fixed. Such an online second-hand. To get rid of it, the store runs a program for elite customers. For example, eBay Authenticate - designed to attract buyers of luxury bags. There are many cases when the purchased handbag does not fit, and you understand this only after several months, when the return period has already passed. Or - there is an opportunity not very legally to take a batch of elite accessories, but in the offline store you will be asked for documents ... And eBay accepts handbags, assesses them, checks that it is not fake, and puts it on a website in a special section . Anyone can send a handbag, 80% of the sale goes to the seller, the only condition is that the handbag must be from an exclusive brand. And with the price - preferably - not less than $ 500.
So far, 12 brands are available, but from January 1, 2018, if the program proves its effectiveness, it is planned to expand it. Also, eBay is going to start selling expensive jewelry and watches. In the same way: from sellers, only the product and the price reference point, and storage, verification, evaluation, photography and product listing is done by the eBay team. Laura Chambers, vice president of the company, says that there will be special premium packaging for luxury items, as well as a bag with the name of the brand and documents confirming that the product is real.
In the past, eBay has repeatedly pierced and sold fakes. The new program is designed to fix it. And - show top brands and wealthy customers that eBay now also does not hurt to bookmark. And if the buyer of a handbag or watch in eBay Authenticate sees that there is a counterfeit in front of him, the store promises to return him two times more than he paid.
The maximum program for eBay is to become a platform for luxury brands, and completely clear your reputation. Marketing Director Susie Deering explains:
When you begin to understand that people think of you only as an auction or as a flea market for used goods, you have to somehow change the topic of conversation. You have to say - “Hey, we are a great company. And look, by the way, how much cool is sold here. ” We still have enough strength to fight. It is only necessary that people think and talk about us. This is problem number one.
Now the company spends hundreds of millions of dollars to change its image. All US cities are hung with billboards, new algorithms group products into sections and change the look of the site, programs are launched for elite customers. eBay is committed to staying in the game. Therefore, there are two ways. Or in a few years the company surrenders, having spent its resources. Or - turns into one of the most prestigious sites for buying goods. Which option do you believe more?
You can bring goods from eBay, Amazon and other American stores to Russia from Pochtoy.com . With full insurance, including theft and damage. And at the lowest price - from $ 8.99. And if you register via this link and enter the GEEKTIMES promo code, you will receive $ 7 on your account for the delivery of any goods from the USA. We have customers who buy pants and socks, because it is cheaper to transport them from America than to take them in a store around the corner. Strange world.