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Tue Oct 6 2009 23:46:34

Citigroup Research Reveals eShopping Cart Analysis

By: Ina Steiner

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Mark Mahaney, Director of Internet Research at Citigroup Investment Research, issued a comprehensive report on Tuesday previewing Internet Stocks for the third quarter, 2009. I found the following section really interesting, as it shows which of four retail marketplaces has the highest discounts, by category (eBay, Amazon.com, Wal-Mart and Buy.com). 

Here's how Mark explains the analysis (the entire text that follows is directly from his report).

Our Quarterly eShopping Cart analysis
We developed a basket of 60 items in our Q3 shopping cart analysis based on NY Times Bestsellers, Billboard 200 List, and Amazon’s Bestseller lists. In this iteration we also included a few pre-sale items in the DVD titles and Video Games segments, which are likely to be popular holiday items. As in quarters past, we focused on 4 leading Online retail sites: Amazon, Wal-Mart, eBay, and Buy.com. While not exhaustive, this snapshot survey compared prices & selection in: 1) electronics, 2) toys, 3) books, 4) CDs, 5) DVDs & 6) video games.

Key Takeaways:

AMZN Continues To Be The Selection Leader And Remains Very Competitively Priced... - Amazon.com was the only site with 100% of the items on our shopping list (although part of this was due to self selection), while eBay, Wal-Mart, and Buy.com had 97%, 83% and 80%, respectively. In terms of pricing for new and in-season items, Buy.com was an average of 18% lower than MSRP, aided in part by two $50 mail-in rebates on xBox and Wii consoles. AMZN came in second with a 17% discount vs. full retail, and eBay and Wal-Mart tied at 15% discounts.

While Overall Discounts Appear Not As Material As Prior Quarters - For the limited sample of items in our shopping cart, prices were on average 15% to 18% below MSRP, vs. our Q2 shopping cart discounts of 19% to 25%. Interestingly, eBay pricing on fixed price items including shipping was not as attractive in aggregate vs. AMZN. The caveat here is that many of the items in the shopping cart are new or even pre-orders, making supply to the secondary market somewhat limited. While the read through from this suggests Q3 margins might be supported, we note the following caveats: 1) The items in our carts are the "new and in season" favorites, and discounting could be more severe on some of the more dated inventory, and 2) this is a very small sample and may not be representative of the pricing trends across the entire population of items.

All-in, given what is likely to be another competitive holiday season, we expect online retailers to begin to offer more promotions and coupons as the holiday season approaches.




Comments (7) | Permalink

Readers Comments

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: Jim

Wed Oct 7 00:12:21 2009

My take away is that Walmart is kicking eBay's whatever.  The difference between Walmart and eBay price is minimal and you have better assurance that the item will be returnable, get to look at the item and buy it outright.  

Takeaway lesson, if you are selling what Walmart is selling, you are in deep trouble.

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: beachy

Wed Oct 7 01:12:18 2009

Why would anyone buy anything in the above listed categories (with the exception of books & toys) from ebay?

Electronics, dvd's, cd's, and video games are all considered ''high risk'' by eBay/Paypal therefore sellers' funds are automatically held which creates a no win situation for both buyers & sellers.

Guess they didn't have room for that little tidbit in the chart, lol.

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: Ebay's Slow Death

Wed Oct 7 03:24:41 2009

''In this iteration we also included a few pre-sale items in the DVD titles and Video Games segments, which are likely to be popular holiday items.''

How can you compare Amazon to the other retailers, especially Ebay, when the only place you can pre-order items is on Amazon? I've never heard of Walmart or Buy.com offering items for sale before their release.

With only 60 items of the New category, it is a pretty thin study.  Why didn't they include some things that have been available for a year or more?

Pretty dumb study, but typical of Wall Street analysts.  They start with what they want to prove, and then engineer the study around the result.

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: Zombie Monkeys ruined Ebay

Wed Oct 7 11:44:56 2009

Of course the Dolts that run Ebay will take away only one thing from this survey:
"eBay pricing on fixed price items including shipping was not as attractive in aggregate vs. AMZN. "
Without of course, the caveat that Amazon actually pays you all the shipping charged, and Paypal steals 3% of your shipping, therefore creating the situation where even if you charge EXACT shipping, you still lose money.

Ebay's pricing could be much more attractive if they didn't charge 18% & .70 cents to sell. Ebay's value proposition has become a joke.

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: fruity

Wed Oct 7 14:41:05 2009

Yeah, but if you want it for christmas, dont get it on Ebay because remember what Buy on ebay did last year. Out of stock, kept on selling and collecting money. ebay kept letting them sell to consumers desptie the fact it was riddled with negs and obvious they didn't have it in stock. If you actually want the stuff you buy for the holidays, then go where they actually have the stuff in stock. like amazon. lol

who knows what those diamonds are going to do for the holidays on ebay. but whatever it is, you bet there's going to be yet another feedback incident

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: Sam's Cola

Thu Oct 8 12:14:06 2009

Walmarts are like Starbucks. On every corner it seems. If you want generic stuff, might as well just pick it up locally.

This is yet another clue for eBay, when the time come for them to rethink their business model.

Citigroup Research Reveals eShopping Cart Analysis   Citigroup Research Reveals eShopping Cart Analysis

by: Zombie Monkeys ate Jon Donaho's brain

Thu Oct 8 14:11:27 2009

You can get it cheaper locally & save people's jobs in your community too. Ebay Daily Deal 2 days ago was a Monty Python DVD for $7.49, I can get it for $3 at Big Lots. For the $10 Shoplet charges for a roll of paper towels, I can buy 10 rolls.



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