MIR: eBay is one of the venerable Internet pioneers – basically being synonymous with the online auction format. How has the auction format and your retailing business model evolved since then?
Eben Sermon: It is true that in the beginning eBay was particularly well-known for auctions. This has, however, changed significantly. Today roughly 80 % of our business is fixed price trade with brand new items. A series of fundamental investments have been made during the last years to strengthen eBay in what is a very competitive industry. The focus of these investments has been to offer buyers the greatest possible selection of inventory from all over the world, with the most engaging shopping experience, whilst strengthening the platform for sellers. Much has been done already and there remains lots more to do.
MIR: The success of the platform business model is being discussed vividly these days. What are the success factors for a marketplace such as eBay?
Eben Sermon: In Germany, platforms account for more than 50 % of all online sales and are growing up to four times faster than other e-commerce players. They play an increasingly important role and work as an ecosystem. The strength of a good marketplace lies in the extent of the inventory range. For consumers this makes marketplaces a one-stop shop for all of their retail needs. This collection of buyers then subsequently makes it attractive for sellers. The more a market place grows, the more competitive it gets in terms of price and variety. The key, though, lies in the way that marketplaces are able to collect data and insights into consumers and inventory trends and in using these to create vibrant and personalized shopping experiences.
MIR: What are your priorities to remain attractive for consumers and to become even more attractive?
Eben Sermon: Customers demand more and more convenience and engagement. Today about 60 % of Germans expect delivery in two days or less. And according to DHL, fast shipping is decisive for 80 % of e-commerce consumers. In addition, Germany also has the highest expectations of returns. Some 15 % of all parcels are sent back. This is about three times more than in the US. But convenience is also about consumer’s desire for experiences that are personalized and about convenience in choosing and ordering products. The challenge for all in eCommerce is delivering on high expectations of convenience but also doing it in a way that shows off one’s inventory in increasingly engaging ways. Online shopping simply needs to be fun. There are apps to shop by video and others that are gamified. But most important is knowing how to remain flexible on these two axes – convenience and engagement – for different shopper segments. For instance, a Young Value Shopper can have very different expectations from a mother of three children.
MIR: What precisely do you do to score on convenience and to exceed other platforms?
Eben Sermon: With regard to convenience, one of the main building blocks is our loyalty program eBay Plus which provides premium shipping, free returns, premium customer support and exclusive eBay Plus offerings to buyers. In 2018, the number of items eligible for eBay Plus has doubled and we are working to further increasing it. Our logistics initiatives eBay Fulfillment and eBay Versand are central to this, as they allow sellers to meet the standards of the eBay Plus program. eBay Fulfillment enables together with our partners FIEGE and Hermes next-day-delivery for purchases that come in until 6pm on a day. eBay Versand offers smaller sellers fast delivery solutions at attractive prices for all channels. In partnership with DPD, participating retailers agree on a suitable daily pick-up window that is always later than 2:30pm to ensure that many orders can be delivered the next day. We are currently testing both of these new services in a beta version with selected eBay sellers.