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February 20, 2013

Q4 2012 Lessons Learned Part II: eBay and Amazon

Last week we published Part I of our Lessons Learned from Q4 2012 series.   For the second and final part of our series, we’re going to look back at the performance of marketplaces such as eBay and Amazon to see what we can take from the success of these marketplaces in Q4 and apply to the rest of 2013. 

eBay

There is no doubt that eBay had an impressive Q4.  If you look at purely ChannelAdvisor same-store sales (SSS), eBay had quite the rally this year.  Take Cyber Monday sales, for example.  Our customers’ eBay SSS on Cyber Monday were up 10.4% in 2011 as compared to 2010; that number accelerated 5X to 55.2% growth in 2012 over 2011!  While Cyber Monday was the largest day by far, we also saw an impressive acceleration over  the full Cyber Five period, jumping from 12.2% SSS growth in 2011 over 2010 to 38.3% SSS growth in 2012 over 2011. 

In the graph below we track the SSS growth of eBay through the Cyber Five period, comparing 2010-2012 growth.  Not only is the jump in sales impressive, but the pattern of sales is interesting too.  In 2010 you see a drop-off over “Leftovers Weekend, with an impressive uptick on Cyber Monday.  The following year, 2011, you see the trend that was pervasive across all channels, a flattening out of sales throughout the entire Cyber Five.  Finally, in 2012, sales start off strong and just keep growing over the weekend with a sharp incline on Cyber Monday. 

  EBay Cyber Five SSS

EBay’s growth continued beyond the Cyber Five, with an increase in SSS of 33.2% for the holiday season (Thanksgiving through Christmas). 

So why was eBay so successful this year? 

The short answer: Mobile. According to John Donahoe, CEO of eBay, mobile sales doubled in 2012 to $13 billion.  The company expects to do more than $20 billion in mobile sales this year. In Q4 of 2012, eBay reported that mobile drove 4.2 million new users to eBay, which accounted for just less than half of all new users on the marketplace.  

To attract mobile customers, eBay debuted an exclusive mobile gift guide and launched mobile-only deals and special inventory.  According to Forbes, one-third of eBay purchases around the world involve a mobile touch point.

Mobile was a big driver of growth for our customers as well this year, with smartphones and tablets accounting for 30% of sales during the Cyber Five. 

Lesson Learned: eBay is clearly executing on its turnaround plans

John Donahoe’s eBay turnaround seems to be coming to fruition as the company reported a 21% increase of revenue for 2012 to $14.1 billion.  In the fourth quarter eBay’s marketplace growth exceeded that of e-commerce, increasing 16% over the prior year. 

If you’re not selling on eBay, now is the time to make that change, especially as eBay Marketplaces and mobile sales are experiencing double-digit growth.     

Amazon

Our CEO Scot Wingo did a three-part deep dive into Amazon’s Q4 earnings, which you can view here: Part I, Part II and Part III.  In this blog we’re going to look at how our customers performed on Amazon in Q4 2012, as well as Amazon’s mobile sales.

Amazon reported $20.5 billion in GMV from third-party sales for Q4 2012, accounting for 39% of paid items, an increase of 3% over Q4 2011. 

For our sellers’ same-store sales, Amazon was up 38.1% for the 2012 holiday period, Thanksgiving through Christmas, compared to the prior year.   Amazon SSS specifically followed the U-shaped trend that we referenced in our last blog post; starting off strong with the Cyber Five, experiencing a lull during the negotiations to resolve the “fiscal cliff” in early December, then enjoying a “procrastinator pop” from December 16-22nd.

  Amazon SSS holiday 2012

While eBay does a ton of press around its mobile sales, Amazon doesn’t break out that information, so the industry is forced to speculate.  Neil Doshi, an analyst for Citi, estimated that Amazon is conservatively earning $3 to $5 billion a year in mobile sales, according to AllThingsD.  This number does not take into account Amazon’s digital sales, such as eBooks or apps sold via Kindle. 

Internet Retailer estimates that Amazon’s mobile sales were closer to $4 billion in 2012, putting the company solidly at the top of the Internet Retailer Mobile 400. 

ComScore released the chart below in September of 2012, which shows the retailers that receive the most mobile traffic (via apps and direct).  Amazon and eBay are clearly the winners, with Amazon almost tripling the traffic of the 3rd place contender, Apple, and both eBay and Amazon earning many times more traffic than other retailers on the list.  

  Comscore retail smartphone visitors

ComScore also broke out the unique visitors, as well as the share of time spent on retailer apps versus on retailer mobile websites, as indicated by the charts below.  Adoption of  

Comscore

Regardless of how much sales were driven to Amazon via its app or mobile browser traffic, the fact remains that Amazon is getting the eyeballs and you want your products to be there.  Amazon also tops a Foresee survey for best mobile customer satisfaction.  Icing on the cake.  

Lesson Learned: Don’t waste your time building a mobile app

Except in rare occasions, most mobile shoppers are not adding apps for every individual retailer.  Instead, they are shopping via marketplaces on their mobile devices, which is why it’s important to get your products on eBay and Amazon. 

Our customers’ mobile sales doubled in the fourth quarter of 2012 and eBay’s mobile GMV doubled year-over-year.  What’s more, there is still significant room for growth from a mobile perspective.  In a recent press release, eBay points to several supportive facts:

  • Morgan Stanley Research predicts that billions of mobile subscribers that do not currently have smartphones will convert in the next few years. 
  • Meanwhile, mobile traffic makes up some 13 percent of total internet traffic, per Statcounter, which is an increase from just one percent of internet traffic three years ago.  

Summing it up

So now that we’ve taken a good look at what we’ve learned from Q4 2012, start 2013 on the right foot by getting your products listed on eBay and Amazon and taking advantage of their mobile traffic. 

For more tips and tricks for 2013, check out our Tip Sheet with 9 tips to help you Kick Start your 2013 sales

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Blog post by Delisa Reavis, Sr. Mgr. Global Corp. Comm.; Marketing Director, APAC

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