Tuesday, August 12, 2008

Perception is eBay's Reality!

It is my belief, that the eBay brand and the perception of eBay by the public, is a major factor in the struggles eBay management is currently facing. They appear to want to morph into a traditional online retailer (Amazonification) without taking into consideration that their 84 million active users don't shop eBay for that type of product or that type of experience. And, those folks who don't shop on eBay currently have a perception of eBay that is not consistent with that type of retail experience.

eBay is known for used items, hard-to-find stuff, One-of-a-Kind treasures, long tail items, deep catalog product, antiques, one man's garbage is another man's treasure items, grill cheese sandwiches with the face of Jesus, collectibles, celebrity items, auctions, etc.

Sure, there is new product available on the site, but it is usually out-of-season, grey-market, surplus or liquidation product and available for a lot less than at traditional marketplaces and retailers.

eBay is also known for fraud, fakes and knock-offs, not-as-described product, surly sellers, poor customer service, high S&H and you can fill in the rest.

So how do you effectively introduce a completely "New eBay" without changing those perceptions of the brand? IMO, it is impossible -- Just adding new product from Buy.com and other Internet Retail 500 companies won't change what eBay is. eBay management needs to change the brand and the perception of what eBay is and that takes advertising and PR and lots of money -- they have the money, but they won't spend the money.

So, if eBay is not going to spend the money necessary to change the perception, why don't they concentrate their efforts on improving what they are good at, rather than trying to become something they are not good at?

If eBay mangers truly believe that the future of eBay is in this new type of product and relationships with online retailers, then they need to spend money. The problem is they can't spend the money without making less profit (in the short-term) because right now there isn't enough growth to pay for the ad campaign.

Why is Amazon considered to be firing on all cylinders and eBay considered to be spinning their wheels? Why is eBay's stock thought to be under-valued and Amazon's stock thought to be over-valued (based on fundamentals)? In a recession/slow down, why is eBay not growing while Amazon continues to outgrow everybody?
  • Amazon has a long-term plan that is pretty obvious; eBay has short-term plans to make their quarterly numbers.
  • Investors see tremendous upside in Amazon's stock and they see eBay spinning their wheels.
  • Buyers see eBay as a gamble and when you are worried about having enough money to live on, why would you take a gamble on eBay?

Perception is reality! Unless eBay changes the perception of their marketplace, all the changes in the world to search, feedback, seller requirement, bringing on new diamond sellers won't amount to a hill-of-beans.

Just my 12%

9 comments:

roo said...

Randy,

Great post. You are spot on.

I would only add that eBay needs to split the site. Auctions and Fixed Price are not compatible, and this creates the perfect opportunity to create the new brand - the one that allows Fixed Price sellers to return without the baggage of slow-transaction, fraud-filled eBay Classic.

It seems the inability to repair the image of the original brand, and spend money to do so, is balanced by their need to create a new site anyways. There you go - the new site gives them the freedom and latitude to get it right, without having to spend a gazillion dollars convincing people that eBay changed.

uBid is about to launch RedTag.com - a perfect example of a new site that has literally nothing to do with the old. And, an auction site that could not find compatibility with the emerging challenges of Fixed Price.

Like I have said before, however, eBay is likely to crash and burn vs. pulling up out of the nosedive. Some people can't be warned away from disasters - they have to experience them to react.

roo

Randy Smythe said...

Roo, thanks for the comments they really dovetail nicely with the post.

I want eBay to succeed, ecommerce needs eBay to succeed but they are approaching an iceberg with a huge jagged unseen base. They need help.

Just shouting there is an iceberg ahead doesn't seem to be working.

Tony P. said...

Perception is reality, indeed. The demi-gods that walk the halls of that Ivory Tower have their own view of reality, and its manifestations generally leave most of us 'common folk' slack-jawed and bewildered.

D'oh! WTF? Why'd they do that? Who knows?! Not me. I'm still wondering about their last ad campaign (if you can call it that).

Shop Victoriously!

Hey, meatballs, dontcha mean "Bid Victoriously? How the hell do ya SHOP victoriously? Oh, I got it... like in those free-for-all sale events where the store manager unlocks the doors and women come screaming into the store to buy wedding gowns, etc?

Wham! Bamm! KaPow! Kick, Kick! Suplex!! Alrighty then.. look here, biotches... I'm Victorious! Won't I look just darling in this dainty little number? (Bamm.. stay down, mf)

IT all made perfect sense to THEM. I guess.

Stefan said...

If you approached a random, unbiased person on the streets and asked them to describe eBay in three words, you would hear stuff like this:

Bidding. Winning. Garage Sale. Cheap. Scam. Risk. Fun.

This is the perception people have of eBay. Love it or hate it, this is the current perception.

If eBay wants to change all of this then great. I don't think it's a good idea, taking all the fun out, but if they are going to change the soul of the site, then you have to TELL PEOPLE you are changing it, because most people outside the ebay world have NO idea about any of this happening.

They might have heard this or that, but nobody has any clue that eBay is supposedly this brand new company now. I mean this is a huge deal.

Think about if you were a casual eBay buyer (once or twice every few months, maybe twice a year). Imagine the last time you logged on to eBay was last Christmas, if you logged on today you would be like, "what the hell is going on here?"

Those same buyers who associate eBay with winning, bidding, and fun are going to the site now and don't know what to think.

There's no coherent message anymore, no direction. These days eBay feels lost, like a company trying to find itself. Unconfident.

For the love of God eBay, sacrifice Q3 profit to get the message out about these new grand plans of yours! While you're at it, please tell the sellers, because I feel just as lost as the buyers do...

permacrisis said...

Oh to be a fly on THAT wall- the conference room where they come up with the new message, that is.

"We've fixed all the fraud that, er, um, never existed in the first place."

or

"The pounding and sawing noises you think you may be hearing throughout our store are NOT construction, and oh-- BTW, We're Better Than Ever!"

and then there's

"We've bulldozed out all those pesky little small sellers with no customer service lines or volume shipping departments for an ALL NEW shopping experience. And hey if you have anything in your closet you want to get rid of, sell it here."

most puzzling is

"Come shop in our new and improved store. It is a very DANGEROUS place, lots of sharp edges and nails sticking up, and you cannot trust ANY of our people but as long as you check out at a Blue cash register, we'll refund your money if you get ripped off. Those using the cheaper, Red cash registers do so at their own peril. Marvel at the tags on our many items, some marked with warnings that we are having a protracted labor dispute with that supplier and wouldn't you really rather 'BUY' the item on the shelf next to it anyway?

"So come on down. You'll love it!"

They'd better contract that ad campaign out to Kellogg, Brown & Root!

nadine said...

Too funny permacrisis. And too true.

If I'm a casual Ebay user, what does "Shop Victoriously" say to me? When do I talk about shopping as remotely "victorious"?

When I go bargain-hunting and find a great deal. Or when I buy something I really want at auction, outbidding the competition. Or when I have been looking for that hard-to-find item for a long time, and finally I find exactly what I was looking for.

So all "Shop Victoriously" does is confirm Ebay's existing brand: an auction site for bargains and hard-to-find stuff.

No new message there. No new "buyer experience." Just a bunch of confusion on the site. How come items don't show up Ending Soonest? What happened to Page 2 of listings? and so on.

They won't tell the buyer they have fixed the problems because they are afraid to admit there were any problems. And they won't spend money on advertising because they have to make this quarter's numbers.

Sheesh, you wonder why they can't just leave the damn site alone. It would be cheaper and more effective.

Stefan said...

Nadine, you mentioned "They won't tell the buyer they have fixed the problems because they are afraid to admit there were any problems."

I don't think they are afraid to admit there were any problems, I think most likely they haven't yet told the buyer that they have fixed the problems because they haven't fixed them yet!

Best match does not work well at all, and everyone knows it and is freaking out because this is supposed to save core... Sellers are freaking out because they can barely keep up with the changes and are literally pouring millions into eBay's pockets and getting zero visibility for their items.

You also mentioned "And they won't spend money on advertising because they have to make this quarter's numbers."

That may be true. My guess is they are waiting for the right time to make the big advertising push. Hopefully it will come before Q4, because let me tell you, eBay and all of it's sellers NEED a big Christmas this year..

nadine said...

Stefan, they could be advertising the fix even if the fix doesn't work yet. They could change the existing low key advertising to fit the message of the new Ebay...whatever that is. Do they know themselves?

They may be reserving an ad campaign for Q4. They will need a big one just to run in place, imo.

I can think of many sellers, the author of TheBrewNews among them, who now regard Ebay as a liquidation site and will not be ramping up their holiday listings on Ebay this year, but on Amazon and their own websites.

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