eBay, Embrace Your Inner Retailer

Posted by: Rob Hof on January 24, 2008

That’s the advice of Stifel, Nicolaus analyst Scott Devitt, and I think he’s on to something. In his latest note on eBay, on which he has a buy, he says eBay should focus less on the kind of fee adjustments that appear to be imminent and focus more on merchandising their sellers’ products better.

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In a telling comparison, he points out that when a consumer goes to Amazon, she is not only always logged on, she is presented with more than 50 items targeted to her apparent preferences, judging from what she has bought, put in her shopping cart, or viewed. On eBay, she has to sign in every day and still sees only untargeted pictures of women’s purses regardless of what she has bought on eBay. Devitt thinks Amazon-style personalization could provide “material lift” to revenue per customer.

I think he’s right. It’s annoying to have to sign in to eBay every day, and I have to say the opening page of eBay does nothing to get me clicking further to find stuff I might want. I’ve always been perplexed by the seemingly random assortment of goods on the home page. Even after I signed in today, for example, I’m seeing Elvis and Marilyn Monroe stamps and women’s shoes and purses, none of which have anything to do with what I’ve ever bought on eBay.

And under the heading at the bottom “From our Sellers” is an even stranger assortment, including what appears to be a classified ad priced at $49.95 (whatever that means; it’s an ad, ergo there’s no bidding, so why a price?). It’s entitled *BEWARE* Of Data Entry Scams. It appears to be a come-on to make money on … data entry—“the REAL thing.” Right.

Another featured item is yet another classified ad accompanied by a photo of a woman in the smallest bikini I’ve ever seen. (Yeah, that’s her up on the right there, cropped for this family blog.) It’s for a guide on how to run your car on water. I’m not kidding. There’s even a featured auction for Florida land.

I guess those merchants paid to be featured. But really, eBay is not serving itself or its buyers well by allowing this stuff on its precious real estate.

None of this means I agree with the analysts who think eBay is headed for a big fall. It’s got more going for it than the doomsayers and the falling stock price imply. And I don’t think better merchandising alone will recharge the core marketplace. But it would be a great start.

Several folks also think improved eBay search like soon-to-be-CEO John Donahoe is proposing is a good idea, and they’re right. But today, that seems like table stakes. Amazon’s already there and has been for years. eBay has improved its search quite a bit over the past couple of years, but it has a ways to go.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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