July 29, 2014

Exclusive Deep Dive Into Facebook's "Buy Button" - Part II/III

This is a multi-part post:

  • Part I/II - Introducing 'Buy on Facebook' (here)
  • Part II/III - Tour: Completing a transaction and post transaction flow (you are here)
  • Part III/III - What does this mean? (coming soon)

Welcome to part 2 of a 3 part series - Tour: Completing a transaction and post transaction flow using Facebook's Buy button.

Let's jump right into a real-world tour of the new Facebook Buy Button.  For any online transaction, you can break it into the following lifecycle:

  • Discovery - How do I find what I want to buy?
  • Item page - How do I learn more about the item I may want to buy?
  • Checkout process (payment, bill to, ship to, confirm) - You know the drill.
  • Post checkout / post transaction interaction - Where's my order, can I cancel, returns, refunds, feedback, etc. 

In this post, we are going to focus on the mobile experience because it is clear that Facebook has created a great 'mobile first' experience.  After the tour, we'll look at some of  the same pages in the desktop experience so you can see that experience as well.  

A couple of notes: This tour is going to be image heavy - to keep the post readable, I'll be using smaller images, you can click on any of them to 'pop them out' and see any details you are interested in.  Also, these are live images taken off of an iPhone 5S and purchased through my live personal Facebook account of a publicly available experience.  There are no mock-ups in this post.  My credit card information has been blacked out in a couple of the screen captures.

Product Discovery

Your transactional sites like Amazon and eBay are largely driven by search, browse and recommendation discovery engines.  In a Facebook context, it is quite different, you spend the bulk of your time on your newsfeed which shows what your friends are doing.  In fact I believe this is why the first attempts at Facebook commerce failed (activity was buried in a Page/Tab area) and leveraging the newsfeed is how current success stories are working (Lolly Wolly Doodle).

That's exactly how the Facebook Buy Button works - you see an item in your newsfeed:

1_fb_buy

This is a watch for sale by ModifyWatches.com.  As you can see on the right hand side under the product image, there is now a Buy Button.  In this example, I searched for modify watches, found their page and saw the listings on their Page feed.  But as you'll see later, I could have just as easily seen a friend 'share' this or a 'sponsored story' to have it spread virally to my friend's newsfeeds, my fans newsfeeds or my friend of friend, etc.

Once you find an item that's interesting to you, you want to learn more about it.  When you click on the Buy Button you are taken to what I call the item page experience.

Item page

Once you click the 'Buy' Button, you are not taken straight to a checkout process, you are able to learn about the product.  In this screen shot, you can see that there is a mobile-friendly carousel that has 5 images of the watch I am looking at.  Like a Facebook photo album, you can easily flick through these on your phone:

2_fb_buy

(product image 1)

3_fb_buy

(product image 2)

4_fb_buy

(product image 3)

6_fb_buy

(product image 4)

7_fb_buy

(product image 5)

Note that using your phones normal pinch/spread to zoom you can zoom in on the images, just like you would expect it to work.

Below the product image area is a text area for Product Description that abbreviates the description, but allows you to 'show more'.  Here's a look at the description of this watch (some is clipped but you get the idea):

8_fb_buy

There are also links to terms of use (specific to the merchant and you can find them all here) that are actually linked to over on the merchant's website.

9_fb_buy

You can also see Facebook's 'Sales Policy' for purchases made via the Buy Button - full page is here (https://www.facebook.com/payments_terms/commerce_salespolicy)

10_fb_buy

Lower on the page, we can contact the seller (we'll show this later in the post checkout section) if you have any questions.

Now that we've learned about the product detail experience, we press the Checkout button and begin the checkout process.

Checkout process

Before we checkout, I wanted to point out that I already have an active Facebook payment account.  I've used it for Facebook games and Facebook gifts and have stored two credit cards there.  I imagine if you did not have an account the flow would be a little bit different, I'll highlight that as we go.  Here's the first step of checkout: 

11_fb_buy

Here we see that the Checkout is going to have a top portion that keeps track of our purchase (product price, shipping, tax, total) and the bottom part of the page is asking for shipping address.

12_fb_buy

After filling out the ship to information, the next 'card' in the one page UI is payment info. You can see that it remembers my credit card.

13_fb_buy

14_fb_buy

Here (above) you can see where I can pick from 2 cards in the system already, or I can add a new card.

15_fb_buy

Once I have chosen my shipping info and payment, I press the 'complete checkout' button (below the fold on this page).

16_fb_buy

Above you can see a purchase confirmation UX that has a normal summary of the transaction. The merchant has the ability to provide a customized message as well.  You can see here that I can continue on (close) or I can 'Share This Product'.

Post checkout items

After completing the transaction, I can review my Faceboook Buy Button purchases by going to my settings and choosing 'Purchases' as you see in the screen capture below:

27_fb_buy

In this next shot you can see my one purchase:

17_fb_buy

When I click into the purchase, I can see a summary and status of my order, also the order number.  The status of my order is "Not Shipped".

18_fb_buy

The following is lower on the page and allows you to cancel the order (it seems to be within a 4hr window) and also contact the seller.

20_fb_buy

From here, I am also able to "Contact the Seller".  Perhaps I want to know why my item hasn't shipped, or before I purchase, I have a question about the item.  This is the same UX.

 

19_fb_buy

You can see there are pre-set types of questions like "I want to know where my order is" and ~10 others.

Going back to the 'Post Checkout' process, if you recall there was a share option.  Once I share the item, it shows up on my newsfeed and is purchasable for all my friends to see.  This completes the 'social viral loop'.

21_fb_buy

 

 

Moving over to the desktop experience, this is what the shared item looks like on a desktop:

22_fb_buy

When I click Buy, this is the desktop 'item page experience'.  Here you can see it's more of a one page experience vs. a 'multi card' experience as we saw on mobile:

23_fb_buy

When I order on the desktop experience, there's a very well designed single page checkout:

24_fb_buy

Finally this is the order confirm page on desktop:

25_fb_buy

This is the purchase view (now with two of the same watch - one from the mobile and one desktop tour).  

26_fb_buy

In the next screen, I drilled into the second item to cancel it:

 

28_fb_buy

Here is the cancel order screen:

29_fb_buy

Once I cancel the item, it shows as canceled in my purchases view:

30_fb_buy

Then I was sent an email about the cancellation:

31_fb_buy

The next day, I received a notification that my item had shipped both through email and via the Facebook notification 

300_fb_buy

When I click through the notification I am taken to my Purchases/order summary page on Facebook and can track the package.  This package happens to have been sent with USPS.

Modify Watches had suggested '2 days to process' and 5-7 days to ship.  Much to my surprise two days later the package arrived:

500_fb_buy

With the arrival of the package, we have officially completed our tour of the Facebook Buy Button!

Up next: Analysis - what does this mean for e-commerce?

Now that we have seen the entire process from beginning to end, in the next post we'll pontificate on the implications.


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July 28, 2014

Exclusive Deep Dive Into Facebook's "Buy Button" - Part I/III

This is a multi-part post:

  • Part I/II - Introducing 'Buy on Facebook' (you are here)
  • Part II/III - Tour: Completing a transaction and post transaction flow (here)
  • Part III/III - What does this mean?

Welcome to part 1 of a 3 part series - Introducing 'Buy on Facebook'.

On July 17th, 2014, Facebook announced via blog post they are testing a new feature/ad unit that allows a consumer to buy directly from a retailer and not have to leave Facebook.  We believe this new feature has serious implications for the world of e-commerce so in this series of posts we are going to not only do a deep retailer/seller oriented tour of the new feature and put it through its paces, but we're also going to provide some background on the history of Facebook's e-commerce pursuits.

An update on Facebook

In talking to about retailers about Facebook, I find many vastly under-estimate the scale that Facebook has achieved since their IPO.  Everyone remembers when Facebook hit 1b active users, but there are a lot of interesting facts (these are from their Q2 results which were just announced July 23, 2014) you may not realize:

  • Facebook's Ad revenue is greater than Time Warner and Viacom - combined.
  • 62% of Facebook's revenue is from mobile.
  • Facebook has over 1.5m advertisers.
  • Did you know that Facebook acquired Instagram and is closing on WhatsApp (very popular chat app with > 100m users)?
  • Facebook's search engine is handling 1b queries/month.
  • The average Facebook user spends 40mins/day on Facebook.
  • Across the entire Facebook network, they touch 2.2b people on a regular basis - there are 7b people on the planet.
  • The last bullet, said another way: "One-fifth of the world's population now logs into Facebook at least once a month" (-Wall Street Journal).

Those are all impressive stats, but what's most impressive is illustrated by these to charts from their investor presentation:

First, this chart shows monthly active users (MAU) across GEOs over the last 2yrs:

Fb_maus_geos

Yep that's 1.3 BILLION monthly users and it has grown 14% y/y.  829m of those folks use Facebook DAILY!

Second, here's a look at mobile usage.

Fb_maus_mobile

Over 1b users access Facebook via mobile device, 654m daily and ~400m exclusively through mobile.  In May 2012, Facebook had a bit of a mobile panic - broad based mobile was growing faster than anyone thought and Facebook's solution wasn't as good as they wanted it.  In fact they had to warn investors during their IPO process about this risk. In that short timespan, not only has Facebook embraced mobile, they are essentially one of the few 'goto' apps on everyone's home screen be it iOS or Android.  

Facebook has solved mobile - e-commerce has NOT and why that matters.

This is a good time to bring up an important point about e-commerce.  Our industry is in a bit of a corner because we have not solved mobile.  Retailers have been investing millions and tens of millions of dollars in improving their mobile sites, creating innovative mobile apps and the problem persists.  The datapoint I watch most closely these days as desktop usage and mobile usage are set to 'cross lines' (mobile on a huge increase, desktop flat, but declining as a % because of the incremental new usage created from mobile) is desktop vs. mobile conversion rate. 

When we look at our data at ChannelAdvisor (see our SSS backgrounder here) the data really tells the story:

  • Desktop conversion rate (this is across thousands of customers, and fluctuates over the span of a year, so this is an average): 3%
  • Smartphone conversion rate: .8%

This data is echoed by companies like Branding Brand, Monetate and all the SEMs that publish data.

At the same time, Internet Retailer calculates Amazon's mobile conversion rate is north of 10%.

The reason why is simple - on the smartphone form factor, nobody wants to enter their bill to, ship to and payment information.  Heck, most don't even want to enter a login!

This creates a big problem for all retailers in e-commerce, because as mobile traffic surges, they are effectively losing share to those mobile apps (eBay and Amazon are the top 2) that don't require data entry.

This is also a problem for the advertising platforms, because retail is one of the biggest advertisers, as mobile grows, as an industry retailers are see a decrease of 70% of the efficacy of ads (driven by conversion rate) on mobile platforms.  For example, on Google Adwords, they are willing to pay $.45 for desktop clicks, but only $.15 for mobile clicks.

Bottom line: as an industry we have to solve this problem.

Some believe that the solution is to figure out the multi-device attribution problem. For example, if a consumer sees an ad on their phone, then browses on their tablet and buys on their desktop, only the desktop gets 'credit' today.  While I believe there is 'some of that going on', I think the obvious low hanging fruit is to solve the data entry problem.

This is becoming such a big headwind for everyone, that I think a) it is one of the drivers of Facebook adding this Buy Botton  b) we will see all the popular ad platforms (facebook, twitter, google, etc.) look to solve the problem and c) even the device makers and OS providers should/could get involved (Apple, Google, Samsung, Moto, Microsoft/Nokia, etc.).

Keep this in mind as we go through the tour - has Facebook solved the mobile conversion problem with Facebook Buy Button?

A brief history of Facebook's e-commerce efforts and payments

Retailers have been interested in advertising to Facebook's audience since the company started allowing advertising.  Today most retailers leverage programs like sponsored posts, retargeted display ads and fan/like programs.  Beyond that, Facebook and e-commerce have had a couple of false starts that it helps to look at for perspective on this latest effort:

  • 2007-2009- Facebook Beacon - This was a feature that was broad in reach, but for e-commerce essentially shared your activity on various sites like Overstock.com back to Facebook.  The key feature was the ability for the retailer to say: "Joe just purchased a new couch" to your newsfeed.  The problem with this feature was that it was well before Facebook had the powerful sharing options you have today and frequently you would do something like buy your wife a birthday gift to find that it had been shared (thus spoiling the surprise).  There's a good summary here.
  • 2007 - Facebook Fan Pages (aka Facebook Pages) - This creates an area where a retailer/brand can have a presence on Facebook and share updates with their fans, and offer a variety of other functionality.  It has been quite popular.
  • 2007+ - Facebook Page Stores (aka F-Commerce) - From 2007-2009 there was an explosion of companies (Payvment, all of the platform providers, StoreFrontSocial and literally hundreds more). There was a lot of venture capital poured into this concept and a lot of hype.  The name F-Commerce (for Facebook commerce) was attached to this concept.  The problem with this concept was discovery.  A consumer had to go through a complex trail of a) finding a fan page/brand, b) liking it, c) finding the store in a tab and then d) going through a traditional e-commerce experience.  The whole experience was inherently not social and not surprisingly failed.  Many industry pundits, like Sucharita Mulpuru @ Forrester, have suggested that Facebook/social will never drive commerce on the heels of that failure.  There are copious accounts of why this failed such as here and here.
  • 2009 - Facebook Like button - The Like button has been wildly popular and is present on pretty much every retail site today.  It allows the consumer to essentially like a product and have it recommended to their friends.  
  • 2012+ - Comment Commerce - Leave it to an entrepreneur to figure it out.  Brandi Temple, CEO of Lolly Wolly Doodle (details here) had a problem.  She had excess inventory and wanted to sell it. So she would post the items to Facebook where she had a bit of a following for her girls apparel line.  The key to her success is that folks that wanted to buy the items would leave a comment such as "Buy size 2".  Now imagine your friend does this and you see: "Sally just commented 'Buy size 2' on Lolly Wolly Doodle item X". You would be curious and go explore - thus the 'social viral loop' is achieved.  Using this system frequently called comment commerce, Lolly Wolly Doodle built a > $11m business in 2013 that is growing north of 100% y/y.  Why did this work when f-commerce failed?  One word: newsfeed.
  • Q1 2014 - Facebook Call to Action Buttons - In early  2014, Facebook rolled out a new feature on newsfeed ads called 'Call to Action Buttons'.  There is a whole family of these action buttons (learn more here).  For example, on mobile, there's a 'install now' button for apps (pictured below) and most importantly for e-commerce, you can 'shop now' (also illustrated):

400_fb_buy_shop_now_button

(above -> desktop 'shop now' Facebook Action Button)

Fb_install_now

(above -> mobile experience, "Install Now" Facebook Action Button)

Can Facebook and E-Commerce 'work'?

That's a lot of history and the reason I bring it up is in the world of e-commerce we spend a lot of time talking about this.  In my experience, you have two camps:

  1. Those that have tried F-commerce and the like and proclaimed that Facebook will never 'work with' e-commerce.
  2. The other camp that believes that Facebook and e-commerce will eventually stop flirting and get married.

Personally, what I've always believed and said is:

  • With an audience over 1b as a retailer it would be foolish to ignore Facebook and/or count them out as a potentially large e-commerce channel.
  • Stores in tabs was doomed to fail.
  • But shopping for many can be an inherently social behavior.  Product reviews are a good example where we've seen a lot of value at the intersection of e-commerce and social.
  • I've been watching the comment commerce trend closely and you can't argue with the success firms like Lolly Wolly Doodle are seeing there.  There is real, material GMV to be had if you can figure out social commerce. 
  • Facebook is one of < 10 companies that have really figured mobile/smartphone out.

Up next: The Tour!

With that background and history, part 2 will walk through the complete Facebook Buy Button user experience (UX).  As we do that, keep in mind two key questions:

  1. Can Facebook's Buy Button solve retail's mobile conversion problem?
  2. Can the Facebook Buy Button be the solution to the 'will Facebook + E-Commerce' work?

 

This blog post was written by Scot Wingo, CEO of ChannelAdvisor.


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July 21, 2014

UK Webinar: A Retailer’s Guide to Expanding to New Zealand

Thursday, 24 July 2014, 2 p.m. BST

Webinar - Trade MeCross-border trade (CBT) has become one of the most popular e-commerce trends over the last few years, and it seems that every retailer is searching for the next lucrative market and international opportunity for their business.

One territory you shouldn’t overlook is New Zealand, which is fast becoming a popular destination for UK retailers.

It’s not surprising that retailers are attracted to New Zealand as an e-commerce destination. Translation costs are avoided because the country is English-speaking, so listings merely need to be localised. Plus, selling in New Zealand can extend the life cycles of your products, since the Southern Hemisphere enters summer as the UK approaches winter. These are compelling reasons for expansion, but how exactly should retailers approach selling into this growing market?

To help guide you through the process, we’re joining forces with Trade Me, New Zealand’s leading online marketplace and home to 70% of the country’s domestic webpage impressions,[1] to offer UK retailers an overview of this emerging market and a chance to learn about the opportunities it offers online retailers.

Taking place on Thursday, 24 July at 2 p.m. BST, the webinar will feature Hamish Macdonald, Trade Me’s global development manager, and Lily Hsu, ChannelAdvisor business analyst. 

Topics discussed during this presentation will include:

  • A snapshot of New Zealand’s e-commerce market
  • The opportunity for UK retailers
  • Practicalities of expansion
  • How to get started

Sign up today to join this webinar!


[1] Nielsen Market Intelligence

 

July 18, 2014

eBay's Q2 2014 Results - A Seller-Oriented Deep Dive

Wednesday, July 16, 2014, eBay announced their Q2 2014 results.  The results were largely mixed at a corporate level: 

  • Overall Revenue - Met expectations coming in at $4.36b, in-line with expectations.
  • Payments - PayPal did very well and is growing much faster than e-commerce.  We don't cover payments here, but a couple of tidbits are toward the bottom of the post.  Essentially PayPal helped reverse the negative trends in the ticket and marketplace business.
  • Tickets - Tickets are still a tough area (StubHub vs. TicketMaster, etc.) and eBay is in defensive mode here.
  • Marketplaces - We'll dig into this one, but largely the MP segment under-performed growing at just 8% vs. e-commerce's 13% growth rate. eBay disclosed that June was 7%.  eBay's management cited the 'multiple bodyblows' of the data breach and Google SEO as the core reason.

 

Marketplace segment key metrics and analysis

Here is our dashboard of highlights

  Ebay_q2_results

There's a lot going on, here are the key things we're keeping an eye on:

  • GMV Growth - Overall y/y GMV growth was well below expectations primarily due to the data breach problem that eBay had starting in May.   This seems to have hit them on the international side (8% ex-FX growth vs. domestic at 10%) and resulted in overall growth of GMV at 8%.  From a benchmark perspective, this is 5%  below the 13% ComScore e-commerce growth rate.  Also, based on our SSS Amazon grew in Q2 at an average of 29.8% y/y.
  • Sold Item Growth - At eBay (compared to Amazon), this metric 'matters' more because it is more relevant and tends to track GMV unless AOVs increase/decrease materially (which is why we watch it).  Sold items came in at 9.5% a descrease from Q1's 11.4% and what you would expect given the GMV decline. The fact this was higher than the GMV growth rate, indicates a move towards lower ASPs which could reflect consumers buying lower priced items due to concerns stemming from the data breach.
  • Active users - This was the bright spot for the marketplace segment.  Active users grew to 148.9m - a 14% y/y growth rate which means 3.9m new buyers came to the platform in Q2.  This is the best signal of the future we have and it was great to see this metric coming in with good momentum.  

 

GMV Growth slowdown

For sellers, the biggest headline from Q2 is the slowdown in US GMV which was attributed primarily to the data breach during Q2.  eBay required all users to change their passwords which created a ton of friction and seems to have been tougher on the international business. Donahoe called out a couple of interesting tidbits on the call related around to this:

  • Top Rated Sellers (TRS) was 50% of GMV (conversely non-TRS was 50%) - this is a new high watermark since eBay has been discussing this datapoint.
  • 56% of transactions featured free shipping (44% did not) - another high watermark.
  • Cross-Border-Trade was 26% - this is a new high watermark, but it wasn't exactly clear if this includes PayPal or was a specific marketplace metric.
  • Fixed-price grew 19%
  • Auctions were a pain point, down 7%
  • Top-Rated sellers grew at 14% on a SSS basis according to eBay.
  • Competition -management did say that they are facing a fair amount of competition and specifically on pricing.  This was mentioned in the context of stubhub and marketplaces, so it wasn't clear if there was anything specific to marketplaces here.
  • Marketing - eBay cranked up marketing spend on the marketplace (Digital marketing such as SEM, display ads, etc.) 

 Finally, eBay mentioned that June GMV was up only 7% and July was recovering a bit, so this breach headwind could continue into Q3.

Why was ChannelAdvisor's SSS so much higher than eBay's?

We've been asked why our SSS sometimes doesn't track eBay's results and one reason is that our customers have for the most part moved off the auction format, so our data have a higher FP/Auction mix vs. eBay overall.  On top of that, ChannelAdvisor has reported a roughly 80/20 domestic/intl revenue mix in recent quarters whereas eBay is closer to 40/60 domestic/intl.  Also, we believe our customers have a strategic advantage due to our technology platform which we believe helps them to grow faster and more efficiently.

Action items for sellers from eBay's Q2

This was a really tough quarter for eBay and while we haven't seen Amazon's results for comparison, it's clear that overall the eBay marketplace is not growing as fast as e-commerce overall, therefore it is losing share.

If you are a seller, your action items from the Q are pretty clear:

  • A diversified strategy with many marketplaces and e-commerce channels is the best protection against any one channel having headwinds.
  • The 'quadrant' of fixed-price and TRS is where the growth is at eBay - the playing field is tilted heavily this way, so for most sellers it is worth the economic cost hit to be here.
  • Mobile and cross-border-trade (CBT) are big initiatives for eBay so you should try and make sure you are utilizing them by making sure your listings are mobile friendly and that you are experimenting with programs like eBay's Global Shipping Program (GSP) and the UK-based Click and Collect which appear to be growing much faster than eBay and e-commerce overall.

Next week we will cover the Amazon results on sister site Amazon Strategies.

Scot Wingo wrote this blog post. I am CEO of ChannelAdvisor.

July 15, 2014

eBay Q2 2014 results preview (seller oriented metrics)

Tomorrow (Wednesday 7/15/14),  eBay will announce Q2 2014 results after the market closes (~4:30pm ET).   In this post we preview the Q2 report and provide an overview of what we will be watching for from a seller's perspective.  

Last quarter, Amazon reported before eBay which was unusual, but due to their battle with Carl Icahn.  This quarter we are back to the normal sequence with eBay going first (7/15/14) and Amazon reporting 12 days later on 7/24/14 (Thursday of next week).

ComScore recently reported that US e-commerce grew at 11.8% y/y for the desktop which translates to 13.1% y/y with mobile included so that is the baseline for 2014 growth.  

eBay had a tough quarter with the double whammy of the data breach and Google Panda action.  

Our average Q2 SSS increase for eBay's GMV was 12.6% which is in-line with the comScore e-commerce number and above what Wall St is predicting (9/10%).   

eBay Q2 2014 Dashboard

As usual, before the results, we are publishing our dashboard so sellers/retailers can track the relevant pieces of the results:

Ebay_q2_preview_dashboard
  

What else are we looking for?

We'll be watching for these trends and any comments on these topics:

  • GMV growth for the marketplace (both US and intl) is under the microscope this Q from a Wall St. perspective because that is where any impact from the breach/Panda items is likely to be 'felt'.
  • Mobile - eBay hasn't done much new with their mobile strategy on the marketplace side of the house, it will be interesting to see if this strategic area is holding strong or starting to lose some steam.
  • Increased competition - Several Wall St. notes are out citing concerns over increased competition from Amazon, coupon sites, vertical sites, flash sites, and potential competition from the likes of Alibaba.  Everyone will be listening for any interesting comments here.

Stay tuned

Shortly after eBay announces, we will update the dashboard with the actuals to see how they did vs. their guidance, Wall St. expectations and the e-commerce baseline 13% growth rate.

Scot Wingo wrote this blog. He is CEO of ChannelAdvisor.  
 

July 10, 2014

June 2014 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search, CSE and other e-commerce channels

Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of thousands of retailers and billions in GMV.  Details on the SSS including background, methodology, disclaimers and the 2014 schedule can be found in this post.  

Today we are releasing June 2014 SSS data for eBay, Amazon,Google Search and Google Shopping/PLA.  ComScore recently reported that US e-commerce grew at 11.8% y/y for the desktop which translates to 13.1% y/y with mobile included so that is the baseline for 2014 growth.  

We have had a lot of questions from customers about FBA recently so this month we are releasing recurring details on FBA in the new Amazon details section.

Here are the result for June 2014, the last month of Q2:

June 2014 SSS Results 

  • Amazon - Amazon's June SSS came in at 34.4%, an increase compared to May's 28.1% .  The Amazon Fire Phone was announced in June and could have caused some knock-on effects.  We have Amazon details further down in the report.  
  • eBay -  eBay's June came in at 12.3% up from May's 11.5% indicating that eBay started to recover from the double whammy of the data breach and Google Panda problems from May. We have eBay details further down in the report that show what is going on with this marketplace.
  • Other 3PM -3PM continued strong growth in June coming in at 51.5%.  While this is a decrease from 78.3% recorded in May, this channels are a bit more volatile in m/m performance than larger more established channels.  @~51%, they are growing 3X e-commerce which is quite impressive and they are our fastest growing channel.
  • CSE - Comparison Shopping Engines came in at 6.7% for June up from May's .4%.
  • Search - Search came in at 20.4% for June, an increase from May's 11.7% y/y growth.  Later in the report we have more search details.

June was a strong month for e-commerce with every channel, except 'other 3PM,' accelerating nicely.

 SSS Chart 

The following chart details the SSS data for June 2013 through June 2014: (click to enlarge)

 

   7_14_sss_overall


eBay Details

eBay's SSS for May was 12.3%.  To get a feel for what is driving the marketplace's performance, here are the interior data points for the month:

  • eBay auctions - Down 19% y/y. 
  • eBay fixed-price - Up 18.4% y/y - an increase from May's 13%, which puts this key part of eBay growing faster than e-commerce again after the May dip.
  • eBay Motors  (parts and accessories) - P+A  was down again in June coming in at  10.5% compared to May's 15.2%.  This brings P+A's growth rate below e-commerce and is the slowest SSS we have recorded since February 2013's 6.8%

 Here are the TTM (trailing twelve month) trends on these eBay internals.  (click to enlarge)

     7_14_sss_ebay_details

Amazon Details

As mentioned in the introduction, we have had many requests for any details we can provide on Amazon, specifically around Fulfillment By Amazon (FBA).  One common misperception about FBA is that sellers have all of their SKUs in FBA or none of them - effectively outsourcing their entire warehouse operation to Amazon (or not).  In reality, most sellers have 10-20% of their SKUs in FBA and use it as a way to accelerate their 3PM sales by making their products prime-eligible and also improving their chances at owning the buy-box.

The other unknown very popular feature of FBA is the ability to fulfill for any channel (not just Amazon) from FBA.  As a seller, you have to hard-commit inventory to FBA by physically sending the inventory there.  It can be very hard to predict demand and even harder to predict demand by channel.

For example, let's say I have 1000 widgets and sell on a variety of channels.  Maybe I send 500 to Amazon and have 500 in my warehouse.  Much to my surprise, I sell out of the 500 in my warehouse and have 100 left at Amazon.  I can continue to sell on all my non-Amazon channels and use the 100 items in Amazon FBA to fulfill on these channels with Amazon Multi-Channel FBA. This feature in ChannelAdvisor is ~18months old so we now have a good set of data to include.

Today we are releasing two new datapoints around FBA:

  • Percent FBA - This measures the % of Amazon GMV through the ChannelAdvisor system that was fulfilled through FBA and tracks it on a y/y basis.  For June 2014, 31.8% of Amazon GMV was FBA (therefore 68.2% was NOT shipped via FBA).  That was up from June 2013 where 28.7% of the GMV was FBA.  That's a 10.8% increase y/y in FBA as a % of GMV.
  • %FBA non Amazon - Here we look at the total bucket of FBA-driven GMV and look at the % that was not fulfilled for Amazon sales (website, other 3PMs, search, cse, etc.).  In June 2013, .9% was non-Amazon fulfilled.  Then in June 2014, we saw this grow 92% to 1.8%.

7_14_sss_amazon_fba_details

It will be interesting to track how these FBA related metrics change as we head into the ever-critical holiday period.

Supplemental data for Search

Here are the June Search internals: (click to enlarge)

7_14_sss_search_details

Note: these are all y/y SSS comparisons (June 2014 vs. June 2013).

Search SSS increased 20.4% for June which was the strongest showing since December.  The big driver, as you can see from the internals, is the AOV coming in at $137.02 which was a 7% y/y increase and the highest AOV we have measured for search.  Historically, AOV has been a good indicator of consumer sentiment.  As mentioned previously, we are definitely seeing traditional 'adwords' search appeal to higher AOV searches and Google Shopping/PLA  is picking off the more transactional < $100 items where detailed research isn't 'worth it.'

Supplemental data for Google Shopping

In September 2012, we introduced a new set of data around Google Shopping.  Here is the June Google Shopping/Product Listing Ad supplemental data:

   7_14_sss_goog_shopping

 

Overall, Google Shopping came in at 47.8% y/y increase, an increase from May's 21.4%.   The Conversion rate was up 10.5% and the AOV dipped 8.7% to $98.23 showing the other side of the AOV/ASP coin we mentioned in the Search section.

Conclusion

We hope you enjoyed our report this month and some of the new data points we provided.  June closed Q2 with strong results for most of the channels we track.  As usual we will have detailed reports from eBay and Amazon as they announce their Q2 results.

This blog post was written by Scot Wingo, CEO, ChannelAdvisor.

June 18, 2014

US Webinar: How to Go Global with eBay

Wednesday, June 25, 2014 at 2 p.m. EDT/11 a.m. PDT

 

Ah, the beauty of cross-border trade — the seller on one side of the world and the buyer on the other. Products journey through miles, languages and climates to reach the awaiting customer in a matter of days.

Cross-border trade (CBT) is actually zooming well over the speed limit. It’s forecasted that CBT will reach $307 billion by 2018 — and there’s no sign of pumping the brakes anytime soon.

So how can retailers, whether experienced or green, take advantage of this mammoth opportunity with the least risk possible? Ebay

Join us Wednesday, June 25 at 2 p.m. EDT for our joint webinar with eBay. EBay Global Shipping Team Member Aparna Lahiri and our very own Cross-Border Trading Manager Rynhardt Hanekom will share tips and tricks to help you maximize your global selling opportunities.

You’ll also find out:

  • Why savvy retailers are abandoning the traditional, expensive and risky approach to cross-border trade

  • How marketplaces can serve as an easy first step into the global arena

  • Key issues that retailers face when expanding to international markets, and how to avoid or overcome them

  • How eBay can help retailers grow with international selling and shipping solutions

CBT eBay Webinar
Sign up today
to accelerate your cross-border trade with eBay. You don’t want to get left in the dust.

 

 

Blog post by Jordan Nowlin, ChannelAdvisor social media & blog manager

June 09, 2014

PeSA Internet Conference 2014: Wrap-Up and Highlights

2014 marks the sixth year that ChannelAdvisor has participated in the Professional eBay & eCommerce Sellers Alliance (PeSA) Internet Conference. During that time, it’s been great to see the evolution of the Australian e-commerce landscape and the growing acuity of retailers in attendance. In the passage of a mere three to four years, we’ve seen conversations move from “I’m thinking of going online” to “I’m already online and selling through eBay — where to next?”

In a standout session, Jooman Park, country manager for eBay Australia and New Zealand, spoke candidly about eBay’s recent hacking, conceding imperfection and outlining the challenges the company faced. This conversation was decidedly well-received by the audience. Park went on to summarise new eBay initiatives for the year and into the future, including the much-anticipated Click & Collect service that will launch in Australia this October.

image from http://s3.amazonaws.com/hires.aviary.com/k/mr6i2hifk4wxt1dp/14061002/630e7396-756a-4d80-b96a-9252a1262dad.png

What I always enjoy the most at PeSA is talking with a cross-section of our customers, partners and new retailers, as well as delving into emerging and growing industry trends for the year ahead. Here are a few to watch: 

Growing Trends

  1. Cross-Border Trade: Given his eight years leading eBay Korea, Park brought a unique perspective to the opportunities in cross-border trade (CBT), encouraging retailers not to put it in the “too hard basket”.  While CBT may seem daunting, retailers should take comfort in knowing that better shipping infrastructures and increased customer comfort with online shopping have reduced many of the complexities involved with entering overseas markets.
  2. Mobile: According to Google, at 65%, Australia is one of the top countries in the world in smartphone penetration. And with m-commerce accounting for 40% of Australians’ online spend, there’s now a surge of retailers optimising their mobile sites and seeing real-time conversions as a result. 
  3. Social: Retailers are finding that social media is increasingly impactful and important, but not necessarily a conversion tool. Social is where the conversation starts and remains a useful avenue for brand awareness and promotion. But there’s a persistent difficulty in moulding it into a viable sales channel.   
  4. Millennials: Understanding the psychology and behaviours of this digitally native demographic is essential. Millennials are prepared to do the legwork to find the perfect product, with 72% researching online before making an in-store purchase. It’s therefore important for retailers to showcase their products across every touch point to ensure visibility and a better chance of conversion. Unlike the Gen X and Baby Boomer generations, Millennials don’t mind being tracked online: 60% are willing to provide personal information to marketers, and 29% even expect personalised messaging focused on previously browsed products.   

When crafting the presentation I gave at the conference — ‘Conversation to Conversion’ — I wanted to share my thoughts on the key strategy that ties these seemingly disparate threads together: multichannel.

Retailers are increasingly seeing the value of expanding beyond their webstore and adopting more dynamic approaches in their marketing efforts. At the same time, many still experience difficulty in mastering the basics of optimised product content and built-out data feeds, inhibiting seamless transfers to new channels. With consumers coming from different devices, different e-commerce channels, and even different regions, being visible across the web is crucial.

In my session, I also delved into:

  • The size of the market in Australia and globally
  • What today’s shoppers want
  • And how to create a streamlined e-commerce approach

For all the details, check out the full PDF of my presentation below. Already looking forward to next year!

Blog post Mark Gray, ChannelAdvisor managing director, APAC


AU-Blog-Website-ConversationtoConversion

 

Download the full presentation - Conversation to Conversion - from the 2014 PeSA Internet Conference

 

June 06, 2014

May 2014 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search, CSE and other e-commerce channels

Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of thousands of retailers and billions in GMV.  Details on the SSS including background, methodology, disclaimers and the 2014 schedule can be found in this post.  

Today we are releasing May 2014 SSS data for eBay, Amazon,Google Search and Google Shopping/PLA.  ComScore recently reported that US e-commerce grew at 11.8% y/y for the desktop which translates to 13.1% y/y with mobile included so that is the baseline for 2014 growth.  

This month we have three new additions -two of them are one-time datapoints and one we will continue going forward.

  1. Other 3PM (Ongoing) - In the macro section we are now including 'Other 3PMs' - this stands for non eBay and Amazon third party marketplaces (3PM).  At ChannelAdvisor we support ~37 global marketplaces. While eBay and Amazon are the biggest domestic players, other marketplaces we we have announced include BestBuy, Sears, La Radoute, Newegg, OneStopPlus, Play.com (UK), Buy.com/Rakuten Shopping, Shop.com, Tesco (UK), Trade Me (NZ) and several others that are now generating enough y/y GMV now as a group that we are going to start including them going forward.  They are not in the chart because this is the first month, but the summary data is included.  We recently announced support for MercadoLibre and Alibaba's Tmall Global - those will have to annualize before we include them in our data.
  2. Golf (one time)- In late May, when Dick's Sporting Goods (DKS) announced their Q1 results, they talked about pressure in their golf business, with some lines of business down as much as 10%.  At ChannelAdvisor we have a lot of golf customers and we had many requests from them to do a bit of a deeper dive on this category.  Were we seeing the same headwinds that DKS mentioned?  This data is included in the May results section.
  3. eBay Breach/Panda (one time) - Finally, eBay had two unusual events happen in May.  First, on May 21 eBay announced they were dealing with a data breach from hackers.  Then on May 22 it was reported that Google's Panda 4.0 release caused anywhere from 40-80% of eBay's pages to be de-indexed.  (There are lots of theories on this, the prevailing theory is this was a 'manual action' from Google due to eBay's SEO strategies pushing the envelope). In any case, on May 21/22 we had two serious changes.   We have been flooded with questions and comments from customers about both topics.  How much did this impact eBay?  My traffic is down as much as 50%, what should I do, etc.

For ~13yrs now we have been strong advocates for online sellers/retailers of all sizes to have a diversified portfolio of e- commerce channels.  Events like these, though unfortunate, hopefully help folks realize that if they have all of their eggs in one basket, they have material risk to their business.  The good news is there have never been more e-commerce channel options than there are today and as you will see in the data, even if one channel comes under pressure, there are always areas of growth in our industry that is growing 15%.  It's never been more important to make sure you have balanced your risk AND put your business in the fastest growing channels so you don't miss opportunities.

Now that we have introduced these three new datapoints, let's dig into the results from May, the middle month of Q2:

May 2014 SSS Results 

  • Amazon - Amazon's May SSS came in at 28.1%, an increase compared to April's 27% .  Amazon plans to release a new device (smartphone is leading thought) in mid-June which we will be watching closely.
  • eBay -  eBay's May came in at 11.5% down from April's 14%. We have eBay details further down in the report that show what is going on with this marketplace.
  • Other 3PM - As mentioned in the intro, we are excited to expand our regular same-store-sales  reports  starting this month to include 'other 3PMs' - those marketplaces grew 78.3% y/y on a same-store-sales basis.  While these channels are not as big as the eBay and Amazon, our customers are seeing  strong growth in these channels.
  • CSE - Comparison Shopping Engines came in at .4% for May up from April's down 9% (driven by softness in the non PLA engines).
  • Search - Search came in at 11.7% for May, an increase from April's 4.3% y/y growth.  Later in the report we have more search details.

Based on the questions we received from customers in the golf category, we ran a special report this month to track that category across our marketplace channels.  What we did here is create a basket of ~100 golf sellers and compare their SSS sales for 2014.  Here is the data in table and chart format:

May_14_sss_golf_trends

May_14_sss_golf_chart

 

What we see here is a trend that reflects what DKS reported, but instead of in Q1, more Q2 deceleration.  Q1 was lumpy but came in around 10% y/y growth for both eBay and Amazon.  Here in Q2, we see that golf is at best flat (eBay) and at worst down single digits y/y in April/May for Amazon.   I'm not a golfer (unless you count Tiger Woods on Xbox), so I polled some of our customers and the general feedback I received was in three buckets:

  • There haven't been any big releases (e.g. new club technologies from Nike, Titleist, TaylorMade, etc.) to drive the industry
  • Tiger Woods not being active in the Masters was a negative for the industry
  • Weather in the midwest and NE has dampened Q1 results

Folks are optimistic that the US Open (here in NC this year FYI!) will help Q2 as that is in mid-June.  One negative, Tiger announced he will not be participating.

We'll report on Golf next month - let us know if you like this kind of category-specific spotlight and we will consider making it a regular feature.

SSS Chart 

The following chart details the SSS data for May 2013 through May 2014: (click to enlarge)

  May_14_sss_total_chart

  (note that 'other 3PMs' are not on the chart this month, but will begin next month when we have > 1 data point)

eBay Details

eBay's SSS for May was 11.5%.  To get a feel for what is driving the marketplace's performance, here are the interior data points for the month:

  • eBay auctions - Down 11.1% y/y. 
  • eBay fixed-price - Up 13% y/y - While a decrease from April's 18.1%, this is still a good showing considering e-commerce is growing at ~15%.
  • eBay Motors  (parts and accessories) - P+A  was down slightly in May coming in at  15.2% compared to March's 15.6%.  While this was a slight decrease, it is still relatively strong when you look at e-commerce growth.

 Here are the TTM (trailing twelve month) trends on these eBay internals.  (click to enlarge)

    May_14_sss_ebay_details

As mentioned in the intro, we also did an analysis to see if we could measure any impact on eBay's SSS growth around the time of the breach and Panda hitting (May 22).  This table splits May into before breach (May 1-21) and after breach (May 22-31). 

May_14_sss_breach_panda

To have a 'control' in the analysis, we did the same segmentation on Amazon.  What you see is Amazon grew 3.3% slower in the 'after breach' period.  When you start to look at these shorter periods of time, there are many reasons around these types of small movements  such as the days of the week included in the past/current period, weather trends and other externalities.   So if we think of Amazon difference as the 'norm' and then look at the eBay components:

  • eBay was down 5.4% or 2.1% more severe than the 'norm'
  • Inside of eBay you see that FP and P+A were down 6.2% and 7.1%, but about double of the control
  • Counter to the above, Auctions were up slightly.  Two thoughts here: 1. Auctions are very small and ChannelAdvisor is under-indexed compared to eBay. 2. Auctions have 7-day lives, so historically have taken 7-10 days to show trends that we see in FP/P+A, so there is a bit of lag effect here.

Our conclusion is that there does to seem to be an impact on the eBay business from Panda/breach.  It's impossible to know if it was Panda or breach related or how long it will last.  The good news is that even though there was a hit eBay still grew ~8%.  In June we'll have a complete month to see the impact and will obviously be following this closely.

Supplemental data for Search

Here are the May Search internals: (click to enlarge)

May_14_sss_search

  

Note: these are all y/y SSS comparisons (May 2014 vs. May 2013).

Search SSS increased 11.7% for May and you can see it was primarily driven by a bump in clicks and conversion rates which yielded more orders.  AOV was under a bit of pressure, but the tick up in CR more than made up for that, causing retailers to bid up CPC's 4%. 

Supplemental data for Google Shopping

In September 2012, we introduced a new set of data around Google Shopping.  Here is the May Google Shopping/Product Listing Ad supplemental data:

  May_14_google_shopping

 

Overall, Google Shopping came in at 21.4% y/y increase on a SSS.   This program continues to age and you can see that while the conversion rates continue to grow nicely (up 29% y/y) the AOV has come down ~20%.  This a headwind on the program and shows that more merchants are pouring into the program and increasing selection.

 

Conclusions 

We hope you enjoyed our report this month and some of the new data points we provided.  Hopefully they help you think about creative ways to grow your e-commerce business.  Our next SSS post will be in July when we look at the June 2014 data to see how the end of the second quarter performed for the top e-commerce channels.

This blog post was written by Scot Wingo, CEO, ChannelAdvisor.

May 27, 2014

How Much Was eBay Affected by Google’s Panda Update?

Google’s most recent Panda update, known as Panda 4.0, rolled out on May 20, causing many retailers to wonder how their listings would be affected by the SEO algorithm. Introduced in 2011 and updated periodically, the algorithm is meant to filter low-quality content from showing up on Google’s top organic search results pages.  

As intended, Panda 4.0 brought increased quality to search results. There has been some speculation that eBay may be affected by this update due to its use  of “doorway pages,” or pages designed to rank high but are perhaps thin in content.  

We decided to take a closer look to determine the real impact to eBay. To demonstrate how Panda affects eBay listings, we ran a test, focusing on consumer electronic goods.

How It Worked

Say you’re searching for buy cheap used iphones. Ninety days ago, eBay had positions four and five locked down with these two URLs:

These pages are great examples of doorway/category pages with thin content. Today, they and thousands of other pages like them are gone from the Google search results. But not to worry: These eBay pages were replaced with new pages, which lost an average rank of 3.88 places overall. Most “double” listings (pages from the same site that rank high for the same keywords) were lost as well, reducing page dominance.

EBay pages are still showing up for buy cheap used iphones — just now in position six. This ranked eBay page is a content-heavy buying guide. The new twist is that this content isn’t completely controlled by eBay staff, as doorway pages were. EBay buying guides can be authored by eBay or eBay registered users. From an SEO perspective, they function much like an About.com page — meaning that they have lots of educational content about the search query topic. Many of the pages created by sellers are quite useful, which is a bonus for both retailers and shoppers.

SEO_screenshot_PANDA1


Here are examples buying guides that show up now on the Google results page:

 

 

 

 

 

 

 

 

 

The disappearing act repeats itself for any doorway page within the /bhp/ directory:

/bhp/ directory

Sellers and Shoppers Are the Winners

The good news is that while we’re seeing the doorway pages disappear from rankings, they’re being replaced by higher quality pages that provide a better shopping experience and better highlight sellers’ listings.  

For example, pages like http://www.ebay.com/bhp/used-iphone-4 (which is “stuffed,” or smattered, with the keywords iphone and used) were replaced by new, higher quality shopping pages such as http://www.ebay.com/sch/cell-phones-smartphones-/9355/i.html.

Allow me to get a little technical for a moment. The primary difference between these two pages is that the page that is now preferred by the Panda 4.0 algorithm has the following characteristics:

1.  Adherence to eBay’s “natural” architecture, rather than a manual configuration of the page content and its navigation

2.  Freshness: Because this is a link to a dynamic search, the listings featured are constantly refreshing as some listings end and new ones appear

3. Scoring user intent via direct keywords (e.g., top rated cell phone) as well as inferred keywords (e.g., top rated — and cell phone is inferred)

4. No keyword stuffing

5.  Uses URL rewrite for dynamic search pages (URL rewrites are the manual renaming, or “translating” of URLs into simpler and more memorable names for an end user)

For eBay as an advertiser, a minor drop in ranking is less of a concern because the newly ranked pages provide a better experience for shoppers and sellers.  

How Popular Are You?

Category pages listed in http://popular.ebay.com/ created most of the new increases in eBay rankings.  Any new category added to this human-edited Yahoo-style directory did very well in the update. Many of the //popular.ebay.com/ rankings replaced user-generated eBay “Collections” pages:

popular.ebay rankings

In short, we see the Panda update as a positive one for retailers. Though it does change which eBay pages appear higher in search rankings, eBay listings are still showing up. What’s more, the pages that are showing up are listings that are more relevant to both retailers and shoppers.

Note: The keyword sample we used:

[used iphones, buy used android phones, buy used blackberry, buy used cell phones, buy used galaxy s ii, Buy used iphones, buy used smartphones, cheap used android phones, cheap used blackberry, cheap used cell phones, cheap used iphones, cheap used smartphones, refurbished att phones, refurbished verizon phones, review used android phones, review used galaxy s ii, review used iphones, review used verizon phones, Used Android Cell Phone, used android phone, used att phone, used blackberry, used cell phones, used galaxy s ii, used iphones, used mobile phones, used smartphones, used verizon cell phones, used verizon mobile phone, used verizon phone]

For more details about our test and how we set it up, please email us at info@channeladvisor.com.

 

Blog post by Tansy Obryant, ChannelAdvisor SEO strategist.