Monday, May 04, 2009

Citigroup Take on ChannelAdvisor Catalyst

I normally don't just repost investmnet notes from analysts but since Mark Mahaney's take on CA Catalyst was pretty much the same as mine I figured I would do it this time. I also like that he mentioned Buy.com. :)

  • Takeaways From Upbeat ChannelAdvisor Conference - Last week, we attended the ChannelAdvisor (CA) Catalyst 2009 Conference in Raleigh, NC. Per the company, attendance was in-line with last year, with participation from companies like Amazon, eBay, Google, Buy.com and many large, medium and small retailers.
  • Takeaway #1: Tough Times? Yes, But CA Clients Surprisingly Upbeat - There was general consensus among the retailers we spoke with that while these are clearly difficult times for retail, the online retail channel remains strong. Many of the conference participants had successfully diversified their online channels beyond eBay Marketplace and were seeing success with Amazon's 3rd party channel, and direct to their own Websites through Comparison Shopping and Search.
  • Takeaway #2: AMZN Continuing To Gain Momentum Vs. EBAY As Platform - AMZN's 3rd party channel continues to be well received by sellers we spoke with. AMZN closed the conference with a big push to get sellers to try fulfillment by Amazon (fba), and Amazon Product Ads, a CPC based advertising model that redirects buyers to seller product landing pages off of Amazon.com's Website. All in, AMZN continues to gain momentum vs. EBAY, the largest online marketplace. We estimate that AMZN was only 60% the size of EBAY in '08 in terms of total U.S. GMV (excluding Vehicles), but could surpass EBAY by 2011 (AMZN-EBAY crossover point) -- see page 3 analysis.
  • Takeaway #3: A More Sober EBAY Committed To Competing For Buyers And Sellers - eBay pitched its simple message that it plans to compete aggressively for buyers by providing better selection, value and trust in its marketplace, and by providing sellers with high velocity, efficiency, and predictability. While eBay openly admitted that it has plenty of work to do, it pointed to evidence that it is making progress: 1) a tripling of fixed price multi-item format items since September, 2) 30% of live listings now include free shipping, and 3) under new DSR system, roughly 80% of sellers qualify for some form of discount.
  • Takeaway #4: Google Market Share Gains Continue Unchecked - We didn't hear anything incrementally new from the Google presentation, but consensus among sellers we spoke with was positive on both traffic and ROI trends. One presenter boasted getting $7 of margin back for every $1 spent on Google.


Just my 15%

11 comments:

Tula said...

Interesting highlights, Randy. Makes me feel a bit more confident that the economy is on the road to recovery. I don't know if Ebay can say the same about recovering, but some of their recent changes seem positive to me. It's nice to see Amazon doing so well, and I'm not surprised to hear that about Google. Ebay should really revisit its relationship with Google if they really want to drive more buyers to the site.

Here's hoping that business is going to improve this year for all of us.

Randy Smythe said...

Tula,

I think Brick and Mortar retail is still struggling but people are still buying and more and more they are going to the web.

So if you are an online merchant you are in the right spot.

nadine said...

So, wrt to eBay, the good news is that they are more 'sober' (i.e. it's finally dawned on them that they don't own the sellers and treating them like serfs is a bad idea), but the bad news is that they still base all their 'improvements' on bogus data: DSRs, free shipping, and a rising percent of fp. Guess they really hate cross border trade, huh?

The 80% qualification for discounts figure was interesting. What figure do you suppose eBay expected when they started the scheme?

Randy Smythe said...

Nadine,

I don't imagine they forecast 80% would qualify for discounts.

As we discussed on Twitter they think they have hit bottom and the number they are seeing show a recovery of sorts.

IMO, they will just continue to manage the marketplace business until everyone sees them as PayPal with a side of marketplace biz.

nadine said...

Yes, but if the Marketplace business continues to decline the way you & Scott Wingo expect it to decline (this year's holiday season should tell the tale), then Paypal's growth will be hobbled by the loss of the Marketplace feed.

Randy Smythe said...

Nadine,

That is why they have been moving so aggressively to get more PayPal adoption on eBay.com

2010 or bust said...

That is why they have been moving so aggressively to get more PayPal adoption on eBay.com...and by getting larger sellers onto eBay with sweetheart (instant diamond) deals that fuse special Pay Pal-only special offers and high-visibility integration on diamond sellers web sites.

Siva said...

Hi Randy

Thanks for the report on CA's Catalyst conference and for the link to Citi's writeup! Hope your quest to sign up new merchants for the Buy.com marketplace proved fruitful as well given the interest in diversifying traffic sources.

-Siva

Christy Pinheiro, EA said...

Good blog post, as usual, Randy. I agree with Nadine's post-- I think that Ebays numbers are highly suspect... I rarely buy or sell on Ebay anymore-- It just seems "unfriendly" these days. Like the sellers just hate the buyers and vice versa. I try to get everything on Amazon,and I'm glad they are doing well.

Anonymous said...

Hey Randy, are you still out there?

Randy Smythe said...

Yep, just been busy and haven't had much time or interest in writing about the state of ecommerce.