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Where next for eBay? Through the glass ceiling and a look back at the future - VinnyAndCo
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Where next for eBay? Through the glass ceiling and a look back at the future

Where next for eBay Through the glass ceiling and a look back at the future

Where next for eBay? Through the glass ceiling and a look back at the future

I will preface this by saying I love eBay. I’m an ex employee, I buy and I sell. Lots, on behalf of retailers or brands mainly. I have been on the platform for almost 10 years and really entrenched in it. I was asked yesterday the age old question, how does it compare to Amazon? Where next for eBay and it got me digging into some memory banks and lining them side by side and very quickly came to some conclusions – rightly or wrongly. I have identified where I believe the faults have been and I also think there are some opportunities for eBay too. Not as many as I would have thought though.

eBay still ranks highly as a place to extend your online brand selling strategy that is hard to rival. For some time it was well positioned and had few rivals – now its model is replicable and slightly exposed to risk of new entrants to an already crowded marketplace.

Amazon is in a class of its own and I’m no visionary but I believe they are positioned to be the Terminator 2 Skynet – all seeing eye. They have designed a strategy so far reaching that it is difficult to see how someone can catch them up. But this is about eBay and why I think they got some things wrong in comparison.

1.      Development strategies – eBay do not really make it simple to have a singular way to integrate to their platform. The API is not widely enough used and this makes them less sticky. They created an ecosystem of middleware providers globally, that they could have captured themselves were the approach to technology different. This is an ecosystem that Amazon own relative to their platform.

2.      In a world, where ownership of commodities of books and dvds etc, eBay have no clear strategy – where is the protection or vision on these categories, that have been for so long, great drivers of growth. What happens when car parts are printed using 3D? Risks here are in abundance and growing.

3.      No real USP – I will get lynched for this – but everything they do – everyone else does too and quicker and sometimes better. Look to many emerging marketplaces, they are carbon copies of eBay without the legacy issues – Allegro, Tmall etc … Where is the point of difference? Moving into refurb electronics – what do Amazon do? Certified refurbished programme – think about that branding for a second and line bother offerings side by side – I would pay the extra 10% for knowing how Amazon would treat me if there is a problem with my order.

4.      Mergers & Acquisitions – Amazon have built from within and killed poor products quickly. Just like Facebook. eBay don’t have that luxury as the approach taken has been to buy and sell technology to leverage what others are good at. There are no brilliant examples with longevity of this strategy working – why continue to pursue it. In fact, they divested some brilliant partners in PayPal and Magento over time.

Thinking about a singular end to end platform and how wide reaching this could have been, I fear this will come back to haunt them – in essence with these competing companies, they could never harmonise the approach they wanted. In other areas they have been too early to market – at one point, the best online community prior to social media, skype for in sales chat in 2005 again too early. They used to see the strength of the technology, but were sometimes, not wrong in the deployment but too early. This, to me, suggests, no clear roadmap to what a singular platform needed to look like – it has always been more like a transformer – robot in disguise.

5.      General Strategy – rather than move away from core business of the casual seller, there has always been the reluctance to shout from the rooftops about retail partnerships – some of it with merit. But this has failed in the long term – not from the customer point of view, but the number of retailers still not going through eBay or reluctant to. Again, the tech hasn’t made this easy, in fact the opposite, bear in mind the additional cost layer too, and what you have is a platform that delivers eyeballs and sales, but to the detriment of margin. If like Amazon, it was plug and play for retailers, the margin saving could be alleviated and this could become part of a simpler flow.

6.      Re-Organistaion – These changes have meant many, many re-orgs over the years and has resulted in huge costs which are being absorbed constantly. This coupled with the talent moving through departments too quickly, to gain any continuity. The retail world demands continuity, it is an industry based on relationships. I still call some of my old accounts from my account management days when I’m close by to meet for a beer and a chat – the conversations haven’t changed. The internal folks, have.

7.      Talent – Through this meander, eBay have moved talent too quickly – sometimes ambition will drive that. But other companies, like Google, prefer the meritocracy approach, where time earned in a role, is knowledge and value for customers. Plus there is accountability to a project. Finally and very simply, continuity and accountability across functions, should result in simpler, better processes and given the scale of the organisation, significant upswing. There have been some amazing people through the door- visionaries and there are some still there- they just need the right platform to realise that vision.

8.      Love of the brand – firstly, when I joined, you were taught, “people are good” – take a minute to absorb this. Your first mantra, is trust – they trade on this, always have and now it feels like the biggest noose around their neck. Customers no longer need the hand holding they once did when buying a second hand VCR player from Wyoming. Times have moved on. Their buyers love the platform – they also love to complain. It is now too easy and the metrics employed too robust and incredibly punitive. It is incredulous to think that a Toys R Us would intentionally delay parcels to a customer for any reason other than process error – allow them to fix it – solve the problem and remunerate the customer. Don’t force listing restrictions on retailers or good casual sellers alike who are trying to please customers who are the most demanding online customers of any platform – anywhere in the world. This sentiment alone needs to shift.

9.      Lack of direction – where now for eBay – it is not a competitor of Amazon anymore. You now go to amazon to start almost 50% of all product searches – not google, not anywhere else , Amazon. You go to eBay for – discounted products. It’s on dangerous territory. It still has a place as a brilliant brand extension, but this is not it. Structured data is a plus – but this is how websites are supposed to be built.

10.  Shareholder value – This is a key difference where Amazon can absorb all of the shareholder income and use varying revenue streams (of which there are many) to drive the bottom line. Oh wait, they don’t “do profits”. Ebay have endured a tough time at the behest of shareholders, particularly of late and strategies have been driven around getting the EPS (earnings per share) number up and up. This is the same in the most, for any company that is not Amazon.

So what are the opportunities? eBay still has an enormous and enviable buying community. Mobile wise, they have an incredible ability to convert on mobile, again they adopted barcode scanning, listing by mobile early and it has been a real positive story for them. Where do they go from here?

Start by killing the feedback system the way it is – not slowly dripping it out, just take it out and it’s punitive measures too. Reward service and reward loyalty – customers don’t have to shop on 1 eBay store, but at least incentivise me to stay.

Broaden the categories – this is underway and the claim is that 100M new buyers will be brought to the platform this year. That is bold, big and necessary – you now need to surface the inventory to do this.

Stop selling mistrust and the wrong kind of safety, sell the reliability and robust nature in the way this is positioned in peoples minds. Full seller and buyer protection – WOW – there is zero risk to consumers. Consumers or retailers do not understand BBE – bad buyer experience, so reverse the thinking and focus on delivery of excellent buyer experience.

Allow greater marketing synergies for retailers at all sizes – a fundamental flaw is the in ability to capture these sales and allow a form of cross promotion. I don’t know who I buy off in many cases and would not really have the patience to go find them again. Feeds was a poor attempt to realise this and it failed – there will be a metric to show that it worked. But it failed – eBay is not a destination for many for curated retail – this works for the eBay enthusiasts but the first time shoppers to the platform will not relate. Get me to my product fast and let me checkout quick. The 100M new buyers coming will need a simple reason to come back.

Another element that ebay have done better than any other training course or company is create an absolute army of ecommerce people, where they do not exist any where else in society. In a world where the sharing economy is growing at huge rates and the lack of skills in ecommerce (en masse) is not available, there would seem to me to be a trade off. Maybe not for eBay but for those who toil every day in the 1 person in a bedroom style operation. Accessing these folks with their skill, passion and experience is one of the most valuable doors that eBay could open – let, your sellers, sell for everyone.

This might seem mad – but rebrand. eBay it as a thing, hasn’t taken off. eBay it, means – sell it..

B2B selling – again slow to market, but given the relationships in place, there is synergy along supply chain rationalisation and control that other market places cannot compete with. Their relationships are critical to this.

The ultimate way forward for them has got to be this:

1.      Partnership/Merger/BuyOut/SALE – the single biggest opportunity is for eBay to be purchased and partnered with. Google for a long time have been suggested as a realistic partner – search algorithms in sync, google pays a lot for advertising. eBay offers Google something it never had before – a credible ecommerce offering. The synergy is quite an interesting one too and simple when you look at data requirements that have been imposed on sellers in the last 2 years. Couple that with the Google analytics style dashboard in eBay seller dashboard and you have now started to build the profile of a powerful engine – a global engine, an engine that auto translates. An engine that could offer you discounted flights, that could compete with the sharing economy – think about this – your AirBNB house is $150 per night, or bid on it now on ebay for $90 – only 4 mins left. You can buy, cars/houses/ use stubhub to buy tickets and then gumtree and more to get rid of your old furniture. Suddenly, you plug into the Google home products and start seeing how your connected house could start giving you money back. Instructions such as “ how much would I get for my old mountain bike If I sell this today?”

a.      Build on the back of this the retail network that eBay has for nearly a decade tirelessly built. Allow retailers to become part of the connected home of the future.

b.      Use the retail network more effectively as drop off points/collection points and your in store customer services. Use the eBoogle (eBay/Google) mobile app to buy your groceries and claim your unused loyalty points. Then you realise, you have a wardrobe full of 2 seasons ago clothes, so you sell them from your wardrobe, using your app, who then tells you “congratulations, that just paid for your home heating bill”

Oh and the rebrand will be simple, sure aren’t the logos the same colour? Just saved a few mill there.

This combination of relationships will only come with a singular and bold strategy, coming from within eBay and Im sure if anyone in eBay reads this, they will suggest I’m full of shit or that my comments are without merit. In organsiations that large, it is always easy to disprove someone with a small % shift as the underlying revenue is great. But there is very little seismic or exciting poking its head out of San Jose in some time in my opinion.

Finally, this is not the death of eBay via Vincent O Brien, more a realisation that there are many risks to a still slumbering giant. I will continue to find ways to use this wonderful Willy Wonka of platforms to make my clients money and to understand how best to leverage the wonderful world of eBay.

For record, I gave back the gobstopper on the way out.. Now it is glass elevator time.

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