ChannelAdvisor

Part I/II: eBay Announces Spring 2013 Changes - Seller and Fee Changes

Today (March 19, 2013) , eBay announced their first big 'release' of 2013 - internally they call it 13.1 (the 13 is the year and the dot is the release number, e.g. 13.2 will be next, etc.).   

There's a lot of changes in the release including a big change to the eBay fee structure, so we are going to do a two part series:

• Part I/II - (you are here) - we'll provide an overview of the changes and detailed the non-fee changes for sellers that eBay is rolling out this Spring.
• Part II/II - (here) The 13.1 release marks the biggest changes that eBay has made (in the US) to the fee structure since April 2011 when they started charging final-value-fees on shipping-and-handling.  We believe that sellers are going to really want to understand these change so have devoted a whole post to just the fee change portion of the 13.1 release.

We are also planning to host a webinar detailing these changes and answering any questions you have this Friday at 10am ET.  Details are here (www.channeladvisor.com/resource-library/webinars).

Putting the release in perspective - it's all about the seller

In 2012, most of the changes to eBay were really focused on the buyer experience.  In addition to updating the logo, they introduced the feed system and other buyer-facing initiatives.  For sellers, there were some 2012 new additions such as the Global Shipping Program (GSP) and expansion of Fast-N-Free, but 2012 was skewed towards buyer changes.

Looking at the 13.1 package of changes, you can tell the focus is on improving the seller experience.  We were briefed on the changes by Michael Jones, eBay's VP of Merchant Development, and he summarized the changes:

"The selling community is the heart of what eBay was built on, and it's extremely important that we continue to partner deeply with sellers to help them continue to reach buyers around the world and grow their businesses.  This is the start of a new eBay for sellers - drastically simpler and more consistent - with the intent of being the most competitive commerce platform int he U.S."

With that backdrop, let's dig into the non-fee related changes (we cover the fee changes in part II).

February 2013 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search and CSE

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 schedule can be found in this post.

Today we are releasing February 2013 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.  In the world of e-commerce as we look at y/y trends it's important to understand any anomalies in the calendar that can distort (positively or negatively) the data.  February 2013 is one of those months because of leap year.  Last year, 2012 was a leap year so had an extra day (Feb 29, 2012) in the month vs. the 28 days we have this non-leap year.  If you do the math on that and assume every day is created equal (which they aren't, but bear with me), then the missing day adds a ~3.6% headwind to y/y comparables.  So as we look at these numbers, it's natural for them to be ~4% lower than last year's data due to the missing day in the y/y comparison.

Additionally, there has been a fair amount of press talking about pressure on the US consumer due to a perfect storm of tax refund delays, payroll tax changes (up) and headline risk from the sequestration political backdrop.   Also February in the US saw a plethora of winter storms with names like Nemo, Orko, Plato, Q and Rocky that hammered the MW and NE regions.  Keep these external factors in mind as we review the data and we'll look for correlations where possible.

February 2013 SSS Results  (A non-leap year)

• Amazon - In February, Amazon came in at 30.8%.  When you compare that to January's 34.3%, and normalize/account for leap year (30.8%+4%=34.8%), it's actually a bit higher than January's pace. 
• eBay -  eBay's SSS for February came in at 8.2% (12.2% normalized for leap year) our lowest measurement since April 2011.  Further in the report we provide eBay internal component details which provide details on the February dip.
• CSE - Comparison Shopping came in at a 0.5% y/y  (4.5% normalized) positive growth for February.  CSE slowness appears to be driven by overall consumer sluggishness as January was 7.9%, so when normalized that's a ~3% y/y decline.
• Search - Search came in at down 0.9%  (4.9% normalized) which given January's down 1% is a pretty interesting increase.  We have search details in this report that provide more color.

SSS Chart 

The following chart details the SSS data for February 2012 through February 2013: (click to enlarge)

eBay Details

As mentioned, eBay's February  8.2% y/y SSS growth was an unexpected slow-down from the January/December 18.8-22% range of growth.  4% of that is attributable to the leap year.   To get a feel for what else is driving the marketplaces' performance, here are the interior datapoints for the month:

• eBay auctions - Down 20.3% y/y - Auctions continued their decreases in February.  Same story here we've been seeing for the last couple of years, so this was not really a contributor, especially when you factor in the leap year.
• eBay fixed-price - Up 15.6% y/y - On the surface, February's 15.6% increase for FP listings, is a real slowdown, but when we add 4% for the leap-year effect, 19.6% is still growing above e-commerce growth rates.  eBay's FP business is most exposed to overall macro-economic influences and could reflect the broader consumer confidence concerns.
• eBay Motors  (parts and accessories) - Up 6.8%, which is the slowest measurement we've seen since breaking out eBay details (even with the benefit of a leap-year 4% adjustment).  P+A tends to be weather influenced as it is hard to work on your car when you have a foot of snow on the ground.  Based on the winter storms mentioned, we believe the P+A slow-down was largely weather related.  As we defrost into the Spring with March+April, it will be interesting to see if P+A comes back as there is probably a fair amount of pent-up demand waiting for the snow to clear.

Based on the eBay details, the overall trend was driven primarily by the slow-down in the P+A business, and the softness in FP growth.  Given that FP is still materially higher than over-all e-commerce, we believe this is a blip and not a sign that eBay's turnaround is over or stalled.

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

Supplemental data for Search

Here are the February Search internals:

Search saw a bit of an increase from January's -1% to -.9% or 3.1% with leap-year normalized.  Looking at the internal data, we continued to see cannibalization from PLA/Google Shopping (clicks down 7%), but search CR's ticked up nicely to 3.1% (a y/y increase of 3) along with AOV which helped generate a positive outcome even in the face of click cannibalization.

Supplemental data for Google Shopping

In August 2012, we introduced a new set of data around Google Shopping.  Here is the February Google Shopping supplemental data:

So far with Google Shopping/PLAs, things are up and to the right - increasing conversion rates and AOVs continue to drive very strong ROI for this program for retailers.  Most of the improvements are driven by retailers improving their still-early campaigns and figuring out to optimize this new program. 

Conclusions 

February saw a few speed bumps for e-commerce between the tough leap-year comp, macro consumer confidence concerns and a plethora of Winter storms.   Given that backdrop, Amazon came in particularly strong, followed by eBay's fixed price business, Google Shopping and vanilla search (Adwords).  eBay's P+A business was under a lot of pressure due to weather and the CSE segment was hit by consumer confidence.

We'll have to see how March comes in to get a read on the first quarter,  hopefully Mother Nature cooperates and we don't see the next set of storm names on the weather channel: (Saturn, Triton, Ukko, Virgil, Walda, Xerxes, Yogi, Zeus are next).

This blog post was written by Scot Wingo, CEO, ChannelAdvisor. eBay is an investor in ChannelAdvisor.

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’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 16-22^nd.

 

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 3^rd place contender, Apple, and both eBay and Amazon earning many times more traffic than other retailers on the list.  

 

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  

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

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

January 2013 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search and CSE

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 schedule can be found in this post.

Today we are releasing January 2013 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.  January is always interesting because not only is it the first month of the year, it can be heavily impacted by the prior year's Holiday sales as well as weather.

January 2013 SSS Results  

• Amazon - In January, Amazon had a very solid 34.3% growth rate up from December's 29.8%.  We had detailed coverage of Amazon's Q4 results on sister site AmazonStrategies in a three part series: (Part I: Overview/highlights, Part II: 3P deep dive, Part III: Fulfillment deep dive). Also, be sure to checkout the details on Amazon's international business they revealed in their annual report we dug up here.
• eBay -  eBay's SSS for January came in at 18.8%, our lowest report since January 2012.  eBay had a very strong Q4, so it's no surprise to see them take a bit of a breather in January. We had detailed Q4 analysis for eBay here and further in this report we look into the eBay Internal components we measure (fp, auction, parts, etc.) 
• CSE - Comparison Shopping came in at a robust 7.9% y/y positive growth for January.  The growth in this category continues to be driven by Google Shopping.
• Search - Search was 1% as it seems to be coming back from the cannibalization due to Google Shopping/CSE.

SSS Chart 

The following chart details the SSS data for January 2012 through January 2013: (click to enlarge)

eBay Details

eBay's January  18.8% y/y SSS growth was a dip from the last 12 months.  To get a feel for what's driving the marketplaces' performance, here are the interior datapoints for the month:

• eBay auctions - Down 18.1% y/y - Auctions continued their decreases in January.  Same story here we've been seeing for the last couple of years, so this was not really a contributor.
• eBay fixed-price - Up 26.9% y/y - January's fixed-price data was about average for what we saw in 2012 and substantially higher than last January's 18% y/y increase (11/12) we saw, so eBay continues to make great progress on this focus area.
• eBay Motors  (parts and accessories) - Up 20.7%, which is one of the slowest measurements we've seen since December 2011.  As mentioned, P+A tends to be weather influenced.  Also, 20.7% growth in a 14% e-commerce world is nothing to be too worried about.

Based on the eBay details, the softness in P+A drove the bulk of the slowness and based on our experience is weather related, so should rebound once we get through to Spring.

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

Supplemental data for Search

Here are the January Search internals:

Search (adwords/bing) saw a substantial decline in clicks due to the cannibalization from Google Shopping.  However, conversion rates increased nicely (those that do still click on search are converting better because they couldn't find what they were looking for  in GS). and those counterbalancing impacts caused the decrease of only 1%.

Supplemental data for Google Shopping

In August 2012, we introduced a new set of data around Google Shopping.  Here is the January Google Shopping supplemental data:

The program seems to be out of the 'early adopter' phase and we are seeing CRs stabilize and increase a good bit in January from a y/y perspective - this is obviously significantly lower than the holiday's > 3% conversion rate, but we believe the Y/Y comparison is the best way to look at this to strip out seasonality.  The addition of merchants plus their products married with Google's improvements to their algorithms also drove the AOV up 7/8% to $102.36.  When you have AOV and CR moving up simultaneously, that's a multiplicative effect, so this bodes well for Google's ad spend on the program.

 

Conclusions 

January was a good start to 2013.  Amazon came in particularly strong, followed by eBay's fixed price business.  The Google Product Search -> Google Shopping transition is reaching maturity and we are seeing stabilization across both CSE and Search thanks to that.

Everyone have a great Valentine's day and remember - it's always a great idea to shop online!

This blog post was written by Scot Wingo, CEO, ChannelAdvisor. I am long Amazon and Google. eBay is an investor in ChannelAdvisor.

2013 ChannelAdvisor Same Store Sales Backgrounder and Schedule

2013 ChannelAdvisor Same Store Sales (SSS) Backgrounder

 Since 2009, ChannelAdvisor has been producing a monthly report we refer to as “Same Store Sales” (SSS) as a benchmark for our customers and the industry.  These reports are intended to measure the relative performance of various online channels (e.g. eBay, Amazon, Buy.com, Search, Shopping.com, etc.) through which our customers, who are online retailers, sell their merchandise, and this information helps our customers make educated decisions about their use of various channels.  Unlike survey-based reports or reports based on small sample sets, the ChannelAdvisor SSS data is created using the real transactional data captured by ChannelAdvisor's software across our global customer base of thousands of online retailers, hundreds of e-commerce channels and billions of dollars in Gross Merchandise Value.  

Gross Merchandise Value (or GMV) is commonly used in the e-commerce world because for some channels product sales are different than revenue, so a new metric was created, GMV, to represent the overall volume of product sales that go through a channel.  For example, eBay's GMV is a very large number (> $60b) and their revenue is a subset of that based on their take rate (the % they charge retailers for selling on their platform and other associated fees).   Search engines like Google recognize their revenue based on advertising spend in the form of costs-per-click, but again, we are focused on GMV.  We focus on GMV because that is what matters to our customers, the online retailers, plus we believe it is the best way to measure the impact that a channel is having on the overall industry.

ChannelAdvisor SSS Methodology

The way SSS is compiled is as follows:

• Each ChannelAdvisor customer's GMV  is recorded on a monthly basis by channel.
• We think of a “store” metaphorically as one customer selling through a particular channel – in other words, one of our online retailer customers can have multiple “stores” if they use more than one channel to sell their merchandise.
• Once a “store” has been active with ChannelAdvisor for a year (that is, the customer has been with us for at least a year and has been utilizing the particular channel for at least a year), then we begin to include it in the SSS data.
• If a customer stops working with ChannelAdvisor or stops selling on a particular channel, then that combination of  customer and channel, that “store”, is no longer included (assuming it made it past the year mark in the first place).  When ever an online retailer stops selling on a channel or stops utilizing ChannelAdvisor, they are immediately taken out of the SSS data. 
• GMV is measured in native currency and compared in native currency.

Here is an example of how this works:

Customer A first began selling on Amazon in mid-April 2011.  This customer’s Amazon GMV is first included in the monthly SSS calculation in May 2012 and will be first reflected in Y/Y Amazon comparisons in the monthly report for May 2013.

The end-result is a SSS metric that is equivalent to that used by off-line retailers like Wal-mart, Target, etc. called same store sales metrics - in other words it is designed to take out the skewing effects from new customer additions and to give a clear year over year growth picture.  Our customers have found this data to be very helpful for several use cases:

• Existing channel benchmarking - You are a online retailer participating in Search and CSE.  You are growing at 10% in search y/y and 5% y/y in CSE - by using the ChannelAdvisor SSS data, you can benchmark how you are doing against your peers.
• New channel expansion - If you are an online retailer and you are active in Search and CSE, and want to explore new channels, the SSS data can be a guide to finding those channels that are growing at rates you find attractive.

We also publish data in many of our SSS reports that show the breakdown of overall traffic  by device type (e.g. Computer, SmartPhone, Tablet, Total Mobile ).  This is simply a calculation of how much of the traffic driven by search and CSE channels across our platform during the relevant period originated from the specified types of devices.   (Computer + SmartPhone + Tablet = 100%.   Total Mobile = SmartPhone + Tablet.)

SSS Disclaimers

There are many reasons this data is not a proxy for overall e-commerce activity as well as individual channel total performance including, but not limited to:

• Customer variance - ChannelAdvisor's customers may not be representative of the overall customer mix of any individual channel.  For example, on eBay, our customers are skewed towards a larger eBay customer set, not the average.
• Category variance – ChannelAdvisor’s customers are over-represented in some categories (electronics, sporting goods and auto parts) and under-represented in others (collectibles, BMV/media, etc.)  For example, on Amazon, ChannelAdvisor has very few media customers so we have no visibility into that large chunk of Amazon's business.
• Cross Border Trade variance - While ChannelAdvisor does have a fair amount of non-domestic GMV, our mix of domestic and international customers is not necessarily equivalent to that of other e-commerce players.
• Software Impact - At the end of the day, we are a software company. Some of our features cause a short-term bump in sales that may skew results high at the beginning and then lower at the end of a one year SSS cycle.
• Channel impact - Certain changes at e-commerce channels may cause disproportionate good or harm to our customer base, category mix, international mix and software.  While the data shows these changes, because we are not a material part of every channel, over 90% of that channel's business may not have the same impact (positive or negative).
• SSS is a metric unique to ChannelAdvisor- eBay, Amazon, Google and other e-commerce businesses do not measure SSS.  They look at overall growth when they report their financial metrics. We believe SSS is important to our customers from a benchmarking standpoint, which is why we do it this way - it is not intended to be a proxy for the overall performance of any of these e-commerce channels.

How should online retailers benchmark with the SSS?

For online retailers, we recommend looking at your Y/Y performance on each of the channels and comparing it to what we are reporting here to see how you are doing compared to your peers.  For example, you may feel that your 25% January 2013 vs. January 2012 growth on Amazon is very strong, but when you compare to the 34.3% share we are reporting across our customer base, you are effectively behind the average and may need to re-evaluate what looked like a great result to see why you are lagging and/or losing share in this channel. There are a lot of 'dials to turn' to increase your performance on any channel and we can work with you to formulate a strategy to get back to above-market sales growth.

Conversely, maybe you are growing at 15% on CSE and feel that wasn't strong enough, but you look at the ChannelAdvisor SSS and realize you may be being too tough on yourself because you are actually growing close to double what we are seeing out there as the average. You are effectively gaining share in this channel when compared to your peers.

Finally, maybe you are only selling on one channel and want to pick a channel that is going to super-charge some growth.  Hopefully you can utilize this data as one input into that decision.  For online retailers that want a category view or deeper dive into any of these, we do this on an on-demand basis.  Contact your ChannelAdvisor sales rep/account manager to learn more.

2013 SSS Schedule

Here is the schedule for 2012's SSS releases:

• February11th - January SSS
• March 8th- February SSS
• April 9th - March SSS
• May 10th - April SSS
• June 11th- May SSS
• July 9th - June SSS
• August 9th - July SSS
• September 10th  - August SSS
• October 8th - September SSS
• November 11th - October SSS
• Holiday 2011 - TBD - we will have our usual regular updates through the 2013 Holiday season and will post a Holiday SSS schedule in early November.

Questions?

If you have any questions about ChannelAdvisor's SSS data, our methodology, the disclaimers or the schedule, feel free to ask in comments.  

Updates to this post:

This placeholder will note any changes we make to the SSS 2013 post in the future.

 

Is Google building a marketplace? (Analysis of the Channel Intelligence acquisition)

Over on sister blog, CSEStrategies, we have a detailed analysis of why Google acquired Channel Intelligence yesterday.  You've read a lot in the mainstream press lately about Google vs. Amazon, but what about Google vs. eBay?  If Google does build a marketplace, eBay will be in the crosshairs.  

Holiday Lessons Learned Blog Series: Part 1 Overall and Mobile

Now that the holiday fervor has ended and the New Year’s Eve confetti settled, we’re taking a long look at Q4 2012, how it compared to Q4 2011, and what takeaways we can apply to 2013. 

Background

For context, 2011 saw an aggressive “Christmas Creep” with sales growth elevating in early November and holding pretty steady through December.  According to comScore, 2011 holiday sales were up 15%, right in line with its prediction.  ChannelAdvisor customers achieved overall growth of 23% in 2011, exceeding the industry as a whole. 

2012 Holiday in Review

ChannelAdvisor CEO Scot Wingo pointed out an interesting trend in 2012; for the first time since we’ve begun tracking holiday data we had a “U-Shaped” year. 

While we don't report on category data, when we piece together our same-store sales reports through the holiday, we saw an interesting “U” shape that had three parts:

1. Early surge - Driven by Thanksgiving through Cyber Monday (what we call the Cyber Five) promos and early-shopping consumers, we saw an early surge in sales.

2. A mid-December lull - From around Dec 7 - 18 it was unusually quiet this year, which many speculated was due to the looming fiscal cliff and tragic news stories. 

3. Procrastinator pop - From Dec 19-22 we saw an interesting pop in orders that we haven't seen as pronounced in past years.

When you put those three together, you get an interesting U shape.  Scot suggests the procrastinator pop shows that people really trust e-commerce shipments/delivery more than they ever have in the past - as narrow as 1-2 days.

Past holidays had more of a down to the right type shape, so this year the dip and the procrastinator pop at the end were new trends.

Lesson Learned: It ain’t over till it’s over. And even then, it may not be over.

Attracting and Engaging Tablet shoppers

We've all heard about the rise of tablets in e-commerce. Many retailers have included tablets as a component of their mobile strategy. But how “mobile” are these devices really?

The myth of the mobile tablet

Recent research has shown that in fact, a lot of tablet shopping takes place while at home. This usage spikes during "prime time" hours, meaning this may be incremental usage that does not detract from hours otherwise spent in front of a PC. 

• #1 place the tablet is used is the living room
• #2 is the bedroom
• #3 is in airports / airplanes

source: Forrester-Bizrate Insights Flash Survey, Q3 2012

The first two locations are not only stationary locations, but also areas a consumer would consider their comfort zone, perfectly suited for extended shopping sessions.

Airports and airplanes, while not exactly a comfort zone, are places where people typically have lots of spare time, also encouraging a longer shopping experience.

Encourage extended site visits

In order to capture and keep the attention of these shoppers, it’s important to provide a good experience. Ask yourself these questions:

• Is your site easily navigated on a tablet?
  • Do all features work?
  • Is checkout as simple as it can be?
  • Are images a key component of your site layout and fully visible without a lot of pinching and zooming?
  • Does your site encourage staying for reasons other than traditional shopping?
    • Examples of this might be featured videos, blogs, contests and other types of consumable content.

Embrace the tablet e-commerce ecosystem

Multichannel e-commerce includes players with a very broad reach. Make sure that your products are visible within the tablet and mobile experiences these major sites have to offer:

• eBay maintains mobile applications for each major platform with over 100 million downloads as of Q3 2012
• Mobile revenue is forecasted at $10 billion in 2012 (actual revenue statistics are not available until the Q4 results report).
• That's about 16 percent of eBay total revenues for 2012. This makes a compelling case that every online retailer should consider.
• By including eBay in your e-commerce strategy you have access to this base of mobile and tablet consumers.

• Amazon also provides a highly optimized tablet and mobile shopping experience with access to their base of 188 million shoppers.
• Analysts suggest that Amazon is generating around $5 billion in sales from tablet and mobile devices; about 8 percent of annual sales.
• While this is behind eBay's results its still quite an impressive amount and should also be considered as part of a complete mobile strategy.

source: AllThingsD article 1, article 2 

Conclusion

We hope this has provided some food for thought. The growth of tablets and their role for consumers has certainly seen unbelievably rapid growth that only seems to be picking up in pace as time moves on. It’s important for every retailer to look at their plans for 2013 and keep in mind that this is a significant opportunity for capturing market share from those slower to adapt.

• Remember that tablet shoppers are looking for leisure and provide them that experience, give them reasons to stay, and return often.
• Design your site features with these shoppers in mind. Many organizations find that designing for tablets first leads to good results on desktops too.
• If you aren't leveraging marketplaces today, keep in mind that they have a huge tablet audience and can provide you with access to these shoppers that you might not otherwise reach.

 Blog post by David Monterroso, ChannelAdvisor Senior Solution Consultant

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This eBook explains the mobile commerce opportunities available across every channel. The data in the Retailer's Guide to Mobile outlines how to:

• Maximize multichannel revenues 

• Create the best mobile experience possible 

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Peeling the onion on eBay's 2012 Q4 Results (from a seller's perspective)

Yesterday, January 16, 2013, eBay announced their 2012 Q4 results.  Long-time readers know the drill, but if you are new, we always take the results and parse through them focusing on a) the marketplace part of the business and b) those metrics that we feel are meaningful and actionable for sellers and retailers.

Overview of eBay's Q4 results

Several years ago eBay said at an analyst meeting that they were going to turn around the then struggling marketplace business.  They outlined the plan in three parts: 

1. Improve a bunch of core things that were broken (trust, selection, search, etc.)
2. Get the growth in-line with e-commerce
3. Grow faster than e-commerce

At the time, it wasn't clear they could hit the second goal and the third felt pretty audacious (everyone at eBay uses the BHAG lingo from Good to Great).

Well eBay's Q4 report showed the company has hit that goal.  The single biggest metric for me (ok well two) was GMV in the US increasing to 19%.  GMV to me is the best metric because unlike revenue or sold items, it is a true reflection of economic/e-commerce going through the platform.  The second metric I think is really impressive is active user growth.  This metric has wallowed in low single digits and even went negative for a bit in the deepest part of the turn-around.  For Q4, eBay announced that active user growth was 12% - the first double digit growth since before 2006 (as best I can figure).

In this post we'll go over the seller-oriented highlights from the release, the analyst presentation and conference call.

Updated Q4 dashboard:

Here are the key metrics from the quarter: (click to enlarge)

One interestng milestone hit this Q - the marketplace business had its first $2b revenue quarter.  I already mentioned US GMV growth and user growth.  International GMV was pretty strong at 14% y/y growth (ex-fx) given the EU focus eBay has non-domestically and the economic malaise they face over there.

 

Some other metrics of note from the conference call:

• 59% of eBay's total GMV was non-domestic, 41% domestic (intl actually went down a point compared to Q3, driven by the US super-sized growth)
• The CSA category was on fire (see below for detailed analysis)
• Fixed price is now 68% and grew 21% (so Auctions are an anchor on growth, but as they bleed away, eBay's GMV should get up to that 21%)
• Auctions grew a paltry 5% y/y - we continue to see sellers holding onto this format (100%) and hopefully these metrics are proving that is not a winning strategy on eBay
• Top Rated Sellers (TRS or eTRS) were 42% of eBay's US GMV and their SSS was 20%.  So like auctions, as eBay bleeds off non-TRS sellers, the overall growth should rise to that 20% (higher actually as this is SSS not total GMV)

Mobile mobile mobile mobile

Some of the most interesting metrics were around mobile:

• eBay's GMV from mobile was $13b - representing 120% y/y growth (more than doubling folks!)
• Paypal TPV (Transaction payment volume) from mobile was $14b
• (note - I can never understand the overlap between these two metrics - most of eBay's GMV is paid with PayPal and I assume that is included, so I think they are saying the non-eBay mobile payments that went through PayPal are $1b?)  If someone knows the answer to that one, shoot me a note or let us know in comments.

The most interesting mobile metric they released (I believe this was a new metric for this Q) was that mobile drove 4.2m new users in 2012.  Active users increased 9.9m, so mobile essentially drove about half of that growth.  They said on the call the rest was from deactivated customers re-activating and new geos.  You can really see from that metric that mobile is a significant factor in the eBay acceleration.

eBay vs. e-commerce

This chart illustrates how far eBay has come since 2008.  The red line is US e-commerce growth (as reported by comscore) and the darker blue line is eBay's US GMV growth rate.  You can see that they lines 'crossed' meaningfully for the first time in Q312 and Q4 accelerates the trend.  The other data points are 'interior' numbers that eBay reports such as top rated seller growth, FP growth, etc.  We omit auction growth, but it is 5% and has been hovering around that level for quite a while.

eBay Category Details

Unlike Amazon who is very closed with their category data, eBay releases detailed category metrics every quarter that we analyze for you.  Here is a chart that lists each category from largest to smallest indexed by their Q4 2012 GMV.

A couple of things to note in the above:

• H+G is the first category to get up to a $11b run rate - Welcome to the $11B club!  If we assume half of this is US ($5.5b), then eBay's US H+G category (just this one category!) would be number 6 on the IR500 - bigger than Walmart.com's entire online sales which were listed as $4.9b in 2011.  
• CSA had a HUGE surge - it was $1.8b in Q3 and grew to $2.4b in Q4 - I haven't seen that type of jump in an eBay category in a long time.  Anecdotally I think you had a perfect storm in this category:  CSA is popular on mobile (I just tried on a sweater and want to showroom it), CSA was big this holiday and eBay had some great editions in the large merchant program bringing on some solid premium brands to the category.
• CE was strong for eBay as well.  That's good news as the category appeared under pressure the last couple of Q's.

The next chart looks at each category by their y/y growth rate (more relevant in our world than sequential Q->Q growth).  The green indicates the category grew faster than e-commerce (comscore reported Q4 at 14%), the yellow is in-line and the red is slower than e-commerce.

Outperforming categories

• Tickets - wow.  eBay is a couple Q's into their deeper stubhub integration and as a ticket buyer, I do like the new UX much better. Apparently I'm not alone!
• CSA grew 22% y/y - a very strong showing.
• The CE family of categories (CE @15%, cell phone @25% and computer @13% did very well.  On the cell phone side, we have seen an insatiable demand out there for refurb/used iPhone 4+s and eBay is the place to go for those.
• B+I - we are seeing a huge sea change in how businesses buy.  Amazon has Amazon Supply and eBay has the B+I category - businesses like the consumer experience vs. the heavy b2b type experience and a sleeper category for eBay (meaning you don't hear any buzz about it, but it continues to outperform) is B+I - now at a $3.7b run-rate and growing at >20%.

In-line categories

• Toys - I was a little surprised to see toys only grew 12% as we did see a lot of hot items (Furby, Skylander, Doc McStuffins) sell out early this year.  If anyone has any thoughts from that category, chime in on comments.  FYI, looking back a year toys were up the same amount from 2010->2011 and only 2% from 2009->2010, so it is in line with last year's performance.

Underperfoming categories

• Musical instruments - Like Toys, I'm a bit surprised that MI didn't do better than e-commerce.  They are a popular gift and the site features a diverse selection.  If anyone has ideas on that one, please let us know your thoughts in comments.
• BMV, video games, coins and stamps, vehicles are all categories that have historically be structurally challenged, so no surprises there. 

Conclusions

For Q4 2012, eBay came in with 19% y/y GMV growth in a 14% e-commerce growth environment, representing its largest growth rate in the Donahoe era.  Accelerating metrics around mobile, active users and fp/trs growth suggest this is not a one time event and that eBay is teeing up to continue to outperform in 2013.

eBay also has 5 > $1b annual run rate categories growing substantially faster than e-commerce .  We continue to be big believers that retailers around the globe should definitely consider eBay as a channel going forward and Q4 2012 has really put an exclamation on that sentence. (!)

Up next, we'll be reporting on Amazon's Q4 which they release on January 29th. Stay tuned to sister site AmazonStrategies for a preview and similar analysis of how they performed.

Scot Wingo wrote this blog post. I am CEO of ChannelAdvisor where eBay is an investor.

 

 

 

eBay Q4 2012 results preview

This Wednesday, January 16 after the market closes, eBay will be releasing their Q4 2012m results.  Everyone will be watching closely to see how the world's largest marketplace performed during the critical holiday period.

In our Same Store Sales data, we saw eBay's GMV up 27.2%, 27.4% and 22.2% (Oct/Nov/Dec), which was a nice acceleration.

eBay Q4 Dashboard

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

Shortly after eBay announces, we will update the dashboard with the actuals to see how they did vs. their own guidance, wall st. expectations, Q3 12 and Q4 11.

What else are we looking for?

In addition to the 'usual suspects', we'll be watching for these trends:

• eBay has 'soft launched' their new global shipping program.  It seems to be going well for users, but we'd like to hear more about any milestones for the program.
• Mobile mobile mobile - when we look at our SSS data for the CyberFive, we saw mobile as high as 40% during key holiday shopping days.  We believe eBay and Amazon are uniquely positioned with great apps, lots of inventory and a integrated payments to benefit from mobile in an outsized way.  Paypal also has some interesting mobile stats usually.
• Any insights into user growth are always of interest
• Growth rate of top rated sellers vs. above standard sellers.
• Any changes in mix between US/Domestic and FB/Auctions - Q3 was 40% US, 60% intl and 66% FP, 

ChannelAdvisor calculates same-store sales based on the gross merchandise value (GMV) processed through the ChannelAdvisor platform by customers that have been using ChannelAdvisor software for at least a year, removing any customer additions or attrition.

Scot Wingo wrote this blog. He is CEO of ChannelAdvisor.  eBay is an investor in ChannelAdvisor.