Time was, small-business owner Evan Prytherch considered eBay (EBAY) capable of performing e-commerce magic. Prytherch would list his entire music-accessory inventory on the auction Web site and within days it all seemed to disappear. Sold.
But in recent years, much of that magic is gone, Prytherch says. Shoppers are simply not buying all the inventory anymore. Some items languish without a single bidder. Many shoppers opt for other sites including Amazon.com (AMZN), use sophisticated search engines such as Google (GOOG) and Yahoo! (YHOO), or head to store sites directly.
Now eBay is making the biggest effort in its 12-year history to recapture the magic—and bring back the buyers. The company is completely revamping its flagship site, making it easier for shoppers to find and purchase items and discover goods they never knew they had to have. "We are more focused on buyers than we have ever been before," says John Donahoe, president of eBay's Marketplaces, the division that oversees eBay's core shopping business. "What do they really want and need?" eBay Chief Executive Meg Whitman alluded to the changes during a June conference, but company executives outlined specifics in interviews with BusinessWeek this month.
Shopping Logistics
For starters, the site has a new photocentric view that recreates the feel of window shopping, but on the Web. A search for, say, a pair of needle-nose pliers returns a wall of thumbnail-size images of said tool for sale. Scrolling over the photos calls up larger images, complete with brief captions featuring the current price and minutes left in the auction. The new feature is being introduced on a category-by-category basis for existing users and all at once for many new registrants. The aim is for most changes to be available to the majority of users by the yearend shopping season.
EBay has also taken steps to better understand user intent. Depending on the shopping category, users will be able to search by item color, related brands, and relevant sizes. The new system recognizes more common user mistakes, such as brand-name misspellings, and seller shorthands, such as "sz" for size. It also returns results according to relevance—ensuring that, say, a search for Apple (AAPL) iPods yields actual Apple music players, and not pages of related accessories.
Another upgrade: eBay streamlined the checkout process so users see fewer pages before reaching order confirmation. Buyers can also use a small program, known as a bid assistant, to keep bidding on items up to a certain amount—eliminating the need to regularly monitor an auction for days, if not weeks. "Most consumers are just getting less patient to wait for things," says Jamie Iannone, vice-president of eBay's Marketplace Buyer Experience team. "We are trying to make it simpler, more personalized, and more relevant."
Fun and Easy
The company also wants to make shopping more fun. The site is launching a "Neighborhoods" feature that lets users join groups around particular interests. For example, there could be a Red Sox group on the site where users can chat about their favorite sports team and related Red Sox merchandise. Though no concrete plans have been announced, the company may also integrate technology from recent acquisition, StumbleUpon, to recommend items to users based on their shopping history and the shopping histories of other people like them.
In short, the company is leaving behind old eBay, where tiny pictures sit beside text deions often linking to even longer, wordier deions. EBay's old search system encouraged verbosity, and even misspellings, because item searches were matched to words in the abstracts. Now, sellers can tag items behind the scenes with all the words they think users may employ when looking for an item, without having to cram them all into the listing that the user sees. "We had never rearchitected the whole thing," says Iannone. "Now we have rebuilt our whole finding infrastructure
According to many eBay users, it's about time. "We would have liked to see this focus on the core marketplace for the last three or four years," says Scot Wingo, chief executive of ChannelAdvisor, which makes software that lets retailers automate selling on eBay, Amazon, Overstock.com (OSTK), and other e-commerce sites.
The dissatisfaction has shown up in eBay's results and stock price. Growth in the total value of all goods and services sold on eBay's shopping sites, a metric known as gross merchandise volume (GMV), has slowed steadily. In the second quarter, GMV grew 12% from the prior year. In 2005, year-over-year GMV growth often reached percentages in the high 30s and 40s. EBay's stock has declined 36% (BusinessWeek.com, 7/18/07) since the end of 2004.
Whitman has repeatedly said that reinvigorating the core shopping market was priority one (BusinessWeek.com, 6/15/07). But until recently, eBay appeared unprepared to change. For starters, systems weren't initially designed to handle massive user growth as well as the plethora of photos, videos, and other features that have become standard fare on large retailers' Web sites. eBay has "made significant investments in the technology," Donahoe says.
The old eBay also lacked the organizational structure to innovate quickly. Teams were divided by specialty. Engineers for a project were housed in one area, while the marketing team involved in the same project could be on another floor, in a completely different building, or even on another campus. The company has since reorganized around projects, grouping engineers, marketers, and anyone else involved to ensure new features get to the testing phase faster. The company is also more willing to expose new features to user testing earlier in the process.
Satisfying All Customers
In many ways, eBay's biggest impediment to change is often the people demanding the change. The sheer number of eBay users has made its customer base extremely diverse—sellers range from large retailers with big warehouses to individuals simply cleaning out closets. Buyers include everyone from the convenience shopper in search of a particular item not found in local stores to the competitive bargain hunter. Often, changes begged for by one group are deplored by another.
Because it has to accommodate such varying tastes, eBay needs to be especially careful when changing the site's look and feel. In one area of the spectrum are the convenience buyers who prefer the get-it-and-go experience they find on Amazon, where goods have a set price, and by shopping via search engines. Many of eBay's new ease-of-use renovations are aimed at the convenience buyer. Another big group is traditional eBay shoppers—people who like happening on unique items, who crave deals, and who relish the thrill of winning an auction.
If eBay becomes too straightforward, it risks eliminating the serendipitous shopping experience the latter group craves. On the other hand, getting convenience shoppers to linger via social tools including Neighborhoods, won't be easy either. "At the end of the day, people don't want to chat about shopping," ChannelAdvisor's Wingo says. "If they are able to execute on the convenience factor—that will bring the buyers back."
Fresh Growth?
There's still a big question as to whether any of the changes will spur growth. Sellers have already begun moving merchandise to other off-eBay channels in search of new buyers. Prytherch says he now puts about 20% of his inventory on Amazon. He also has begun selling about 10% of his merchandise from his own Web site.
Still, Prytherch says his loyalty will always lie with the site that has the most buyers. So, should eBay successfully entice more shoppers, the sellers will soon follow. "We all want buyers, and we all want buyers to find our stuff," he says.
But in recent years, much of that magic is gone, Prytherch says. Shoppers are simply not buying all the inventory anymore. Some items languish without a single bidder. Many shoppers opt for other sites including Amazon.com (AMZN), use sophisticated search engines such as Google (GOOG) and Yahoo! (YHOO), or head to store sites directly.
Now eBay is making the biggest effort in its 12-year history to recapture the magic—and bring back the buyers. The company is completely revamping its flagship site, making it easier for shoppers to find and purchase items and discover goods they never knew they had to have. "We are more focused on buyers than we have ever been before," says John Donahoe, president of eBay's Marketplaces, the division that oversees eBay's core shopping business. "What do they really want and need?" eBay Chief Executive Meg Whitman alluded to the changes during a June conference, but company executives outlined specifics in interviews with BusinessWeek this month.
Shopping Logistics
For starters, the site has a new photocentric view that recreates the feel of window shopping, but on the Web. A search for, say, a pair of needle-nose pliers returns a wall of thumbnail-size images of said tool for sale. Scrolling over the photos calls up larger images, complete with brief captions featuring the current price and minutes left in the auction. The new feature is being introduced on a category-by-category basis for existing users and all at once for many new registrants. The aim is for most changes to be available to the majority of users by the yearend shopping season.
EBay has also taken steps to better understand user intent. Depending on the shopping category, users will be able to search by item color, related brands, and relevant sizes. The new system recognizes more common user mistakes, such as brand-name misspellings, and seller shorthands, such as "sz" for size. It also returns results according to relevance—ensuring that, say, a search for Apple (AAPL) iPods yields actual Apple music players, and not pages of related accessories.
Another upgrade: eBay streamlined the checkout process so users see fewer pages before reaching order confirmation. Buyers can also use a small program, known as a bid assistant, to keep bidding on items up to a certain amount—eliminating the need to regularly monitor an auction for days, if not weeks. "Most consumers are just getting less patient to wait for things," says Jamie Iannone, vice-president of eBay's Marketplace Buyer Experience team. "We are trying to make it simpler, more personalized, and more relevant."
Fun and Easy
The company also wants to make shopping more fun. The site is launching a "Neighborhoods" feature that lets users join groups around particular interests. For example, there could be a Red Sox group on the site where users can chat about their favorite sports team and related Red Sox merchandise. Though no concrete plans have been announced, the company may also integrate technology from recent acquisition, StumbleUpon, to recommend items to users based on their shopping history and the shopping histories of other people like them.
In short, the company is leaving behind old eBay, where tiny pictures sit beside text deions often linking to even longer, wordier deions. EBay's old search system encouraged verbosity, and even misspellings, because item searches were matched to words in the abstracts. Now, sellers can tag items behind the scenes with all the words they think users may employ when looking for an item, without having to cram them all into the listing that the user sees. "We had never rearchitected the whole thing," says Iannone. "Now we have rebuilt our whole finding infrastructure
According to many eBay users, it's about time. "We would have liked to see this focus on the core marketplace for the last three or four years," says Scot Wingo, chief executive of ChannelAdvisor, which makes software that lets retailers automate selling on eBay, Amazon, Overstock.com (OSTK), and other e-commerce sites.
The dissatisfaction has shown up in eBay's results and stock price. Growth in the total value of all goods and services sold on eBay's shopping sites, a metric known as gross merchandise volume (GMV), has slowed steadily. In the second quarter, GMV grew 12% from the prior year. In 2005, year-over-year GMV growth often reached percentages in the high 30s and 40s. EBay's stock has declined 36% (BusinessWeek.com, 7/18/07) since the end of 2004.
Whitman has repeatedly said that reinvigorating the core shopping market was priority one (BusinessWeek.com, 6/15/07). But until recently, eBay appeared unprepared to change. For starters, systems weren't initially designed to handle massive user growth as well as the plethora of photos, videos, and other features that have become standard fare on large retailers' Web sites. eBay has "made significant investments in the technology," Donahoe says.
The old eBay also lacked the organizational structure to innovate quickly. Teams were divided by specialty. Engineers for a project were housed in one area, while the marketing team involved in the same project could be on another floor, in a completely different building, or even on another campus. The company has since reorganized around projects, grouping engineers, marketers, and anyone else involved to ensure new features get to the testing phase faster. The company is also more willing to expose new features to user testing earlier in the process.
Satisfying All Customers
In many ways, eBay's biggest impediment to change is often the people demanding the change. The sheer number of eBay users has made its customer base extremely diverse—sellers range from large retailers with big warehouses to individuals simply cleaning out closets. Buyers include everyone from the convenience shopper in search of a particular item not found in local stores to the competitive bargain hunter. Often, changes begged for by one group are deplored by another.
Because it has to accommodate such varying tastes, eBay needs to be especially careful when changing the site's look and feel. In one area of the spectrum are the convenience buyers who prefer the get-it-and-go experience they find on Amazon, where goods have a set price, and by shopping via search engines. Many of eBay's new ease-of-use renovations are aimed at the convenience buyer. Another big group is traditional eBay shoppers—people who like happening on unique items, who crave deals, and who relish the thrill of winning an auction.
If eBay becomes too straightforward, it risks eliminating the serendipitous shopping experience the latter group craves. On the other hand, getting convenience shoppers to linger via social tools including Neighborhoods, won't be easy either. "At the end of the day, people don't want to chat about shopping," ChannelAdvisor's Wingo says. "If they are able to execute on the convenience factor—that will bring the buyers back."
Fresh Growth?
There's still a big question as to whether any of the changes will spur growth. Sellers have already begun moving merchandise to other off-eBay channels in search of new buyers. Prytherch says he now puts about 20% of his inventory on Amazon. He also has begun selling about 10% of his merchandise from his own Web site.
Still, Prytherch says his loyalty will always lie with the site that has the most buyers. So, should eBay successfully entice more shoppers, the sellers will soon follow. "We all want buyers, and we all want buyers to find our stuff," he says.
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