ebay has been a bit on a rebound of late, as The New York Times recently noted. In the article, it notes that its mobile strategy has been a key driver for turning the tide. But it doesn’t really say why – we know that much direct commerce isn’t moving to mobile (estimated $10 million in total sales – though obviously mobile influenced shopping is growing much faster).
No, as this VC astutely observes, mobile helped reinvent the ebay experience. The desktop eBay website is a mess and difficult to navigate. However, on mobile, ebay reinvented the experience, made it super simple, and has gone deep into verticals (auto, fashion) to even better deliver a focused, simple, clean experience.
Now ebay beats AMZN to the punch by launching same day delivery in pilot in San Francisco. But 2 seconds of further digging reveals an interesting wrinkle: ebay is merely the platform and infrastructure for established retailers (Target, Best Buy, Macy’s, etc.). It’s not using power individual sellers (yet, anyway) to fulfill on these orders.
This is a HUGE move with big implications.
Certainly many retailers have liquidated excess inventory on ebay before, so the “frenemy” relationship has been in place for a while. However, if it scales this effort quickly, the most effective way to do this would be to launch with national retailers rather than individual sellers. Why?
While conceptually this is what ebay originated as – an online marketplace of individual sellers and buyers – the fact that it is aggregating retailers in this way makes it different. In the early days of ebay, individual sellers typically didn’t have any strong brand presence and relied on eBay for branding and traffic.
Now, we’re seeing established retail brands who already have direct consumer relationships share those relationships to eBay – which is huge.
What will happen is that either eBay over time is one of two things:
Finally, note that ebay deliberately moved to simplify its experience on by reinventing itself via mobile, and now it seeks to leverage the physical infrastructure and brand assortments of established retailers - so while conceptually it still resembles a marketplace, ebay is straying far from its roots of an online flea market and becoming more of a retail aggregator.
Contrast this to Amazon, which is moving to selling more and more things itself and complementing its assortment with individual sellers. Each is moving in the other's direction as AMZN seeks to dominate the end-to-end retail value chain while ebay is looking to other retailers to reinvent its business model.
No, as this VC astutely observes, mobile helped reinvent the ebay experience. The desktop eBay website is a mess and difficult to navigate. However, on mobile, ebay reinvented the experience, made it super simple, and has gone deep into verticals (auto, fashion) to even better deliver a focused, simple, clean experience.
Now ebay beats AMZN to the punch by launching same day delivery in pilot in San Francisco. But 2 seconds of further digging reveals an interesting wrinkle: ebay is merely the platform and infrastructure for established retailers (Target, Best Buy, Macy’s, etc.). It’s not using power individual sellers (yet, anyway) to fulfill on these orders.
This is a HUGE move with big implications.
Certainly many retailers have liquidated excess inventory on ebay before, so the “frenemy” relationship has been in place for a while. However, if it scales this effort quickly, the most effective way to do this would be to launch with national retailers rather than individual sellers. Why?
- National retailers have a national geographic footprint to fulfill on deliveries – otherwise it requires painstaking partnership conversations with dozens of retailers in every geography eBay seeks to enter
- Non-core eBay consumers – incrementally acquired customers – will be way more likely to buy from an established retailer than via individual sellers
While conceptually this is what ebay originated as – an online marketplace of individual sellers and buyers – the fact that it is aggregating retailers in this way makes it different. In the early days of ebay, individual sellers typically didn’t have any strong brand presence and relied on eBay for branding and traffic.
Now, we’re seeing established retail brands who already have direct consumer relationships share those relationships to eBay – which is huge.
What will happen is that either eBay over time is one of two things:
- eBay becomes the go to provider consumers – using the retailers who have bought into the platform to fulfill and leaving all the messy inventory, logistics and store management to the retailers – effectively only supporting the variable costs involved in couriers, or
- Retailers will revolt from eBay, but may not have other strategic options. There’s just no viable way for EVERY retailer to support same day delivery via the courier model. Instead, retailers will come under even more pressure (hard to imagine, but they will) to create incredible experiences on their own properties in order to attract consumers to the retailer experience, but then use eBay as a fulfillment method (i.e., options would include pick-up in-store, receive in 3-5 days via UPS or receive same day within two hours), but at least they’ll maintain the customer relationship directly.
Finally, note that ebay deliberately moved to simplify its experience on by reinventing itself via mobile, and now it seeks to leverage the physical infrastructure and brand assortments of established retailers - so while conceptually it still resembles a marketplace, ebay is straying far from its roots of an online flea market and becoming more of a retail aggregator.
Contrast this to Amazon, which is moving to selling more and more things itself and complementing its assortment with individual sellers. Each is moving in the other's direction as AMZN seeks to dominate the end-to-end retail value chain while ebay is looking to other retailers to reinvent its business model.
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