If you haven't searched eBay for a video game, book or DVD lately, you might have missed the new shopping experience in eBay's media category. eBay uses a Catalog approach similar to Amazon: eBay's search engine returns a list of products instead of product listings, and shoppers choose the exact product they are looking for.
eBay's Product page include a standard description and stock photo along with a feature similar to Amazon's "Buy Box" - called a "Savings Box" - that highlights just a few listings, with the rest of the listings appearing underneath. A "Group by condition" checkbox lets shoppers sort by item condition (Brand New, Like New, Very Good, Good, Acceptable).
This is an eBay Product page for the Mario Sonic Olympic game for the Nintendo Wii, and is an example of the type of technological innovation eBay believes is key to the turnaround of its Marketplaces business.
During Analyst Day last year, eBay CEO John Donahoe told Wall Street analysts eBay needed to revamp its technology, focusing on innovation. Mark Carges is the man charged with that mission. Carges is eBay's CTO and Senior Vice President of Global Platform for eBay Marketplaces, and he told analysts at the meeting that technology would drive strategy at eBay.
But has eBay lived up to its word? eBay is under pressure to improve - Donahoe told analysts that the eBay marketplace would grow faster than ecommerce in 2011 as a result of his turnaround efforts, yet it continues to have difficulty catching up with ecommerce growth rates.
Wall Street continues to wait. Deutsche Bank's Jeetil Patel recently described eBay's supply and demand as out of balance due in part to duplicative listings caused by changes to fees and moving Stores to core. He described eBay has having a "listings metaphor," rather than a product metaphor seen on sites like Amazon.com. eBay's expansion of catalog beyond the media category is designed to help its search engine handle the influx of listings on its site. A recent report from Citi analyst Mark Mahaney stated that the number of cataloged listings on eBay increased from 6% in 2008 to 20% in 2009. eBay plans to double the cataloged listings in 2010.
I asked eBay last week for a progress report on the technology innovations broadly outlined at last year's Analyst Day. Last week, eBay agreed to provide answers from Mark Carges by Tuesday afternoon, but instead, provided answers from eBay spokesperson Johnna Hoff. In part, she said "Our focus on the technology front has been strengthening eBay's foundation and taking steps to set the stage for future innovation. We have taken time to lay the groundwork, hiring a world-class tech team, building an experimentation platform, launching the Garden by eBay, and listening to customers. From that, we've driven early successes that eBay users have told us perform well." She cited eBay Top-rated sellers; More like this feature; and Mobile as examples, and said "there is much more to come." She declined to answer whether eBay planned to introduce a multi-item/multi-seller shopping cart.
There's no doubt that eBay has undergone some significant changes in the past two years. In addition to opening its platform to third-party developers and launching mobile apps, here are some of the changes you may notice when surfing the eBay website:
- Custom fashion shopping experience - link
- Daily Deals - link
- Fashion Vault - link
- Catalog - link
- Multi-SKU - link
- Visual browse on Fashion portal - link
- Diamond-ring builder - link
But whether all of these changes could be classified as technological innovations is debatable. A former high-level eBay employee who had visibility into eBay's technology platform and wished to remain anonymous said new features, such as Daily Deals and eBay's Fashion Vault and fashion portal, were merely "business deals" and were not examples of technological innovation. "eBay is changing the dynamic of sellers and inventory by reaching out to certain sellers. eBay has done a fairly good job in mobile, but overall, eBay is recognizing other people's innovations, and are not drivers of innovation themselves."
He questioned eBay's time spent replicating a more traditional online shopping experience through efforts such as catalog, stating that new inventory is not one of eBay's core strengths. Shoppers go to eBay for unusual items, he told AuctionBytes. "They're not being honest with themselves if they believe eBay is a starting point" for product searches on the Internet. eBay had told analysts last year that it aimed to be the starting place when consumers went to shop online, being able to provide new and used items in all formats: fixed-price, auction, classifieds and advertisements.
Aside from the catalog, it's difficult to determine whether eBay is making improvements to its search technology, and how, because eBay won't reveal much about its search algorithm.
eBay's Hoff said there are more than 80 million searches performed per day, more than 50,000 categories, in multiple formats. "Best Match is based on item relevance, price and the quality of the inventory and the seller. We are using - and continue to improve on - our predictive models to match buyers who need an item with sellers with the best inventory who offer the best experience."
Deutsche Bank's Patel said Best Match leaves it up to eBay to determine the sellers and the individual products that it wants to highlight from a results standpoint, and said, "It becomes difficult for that technology to keep up with the influx of inventory that's growing on site. You may end up with a worse customer experience potentially off of it. The only unfortunate part is, we'll find out over time whether there's changes to the platform."
Steve Taylor, an expert in search technology and creator of a software program designed to help collectors find items on eBay (one of the first members of the eBay Developer Program), said it's difficult for eBay to be everything to everybody. He pointed to niche sites like StampWants.com (now called BidStart.com), saying it offers a better search experience than that of eBay's stamps category because of its specialization.
Taylor believes eBay may have been testing catalog in collectible categories at one point, and said it does not work when applied to collectibles where quality of the item is important.
One change expected to foster innovation at eBay was the opening of its platform to third-party developers through eBay apps. However, many developers were attracted to the open-platform program because it offered a means to get in front of sellers, something that has been traditionally difficult to do in the eBay ecosystem.
One developer that says it is benefiting from the program is Outright, an eBay bookkeeping solution for sellers. Outright's Paul O'Brien said aside from the exposure his company gains from the program, it is the insight the company gains through access to information that is most beneficial. Going directly to the point of transaction, Outright is able to collect much richer data than from the payment processor, such as what item was sold and who the customers are, helpful information for business planning by the sellers who use Outright.
eBay offers users a peek at some of the projects it is working on with its new Garden that allows users to test new features and provide feedback to eBay. Three months ago, eBay Vice President of Engineering Dane Glasgow told AuctionBytes the Garden brings users directly into the innovation process at eBay by soliciting - and acting on - their input to improve features before eBay launches them.
A better glimpse into eBay's priorities, however, was the disclosure of eBay's Marketplace Goals late last week. The question of whether technology is driving strategy remains to be seen.
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