|Mon Mar 22 2010 09:26:43|
eBay to Make Changes to Search as It Adds Store to Core
By: Ina Steiner
eBay is testing enhancements to its search function, according to Wall Street analyst Colin Sebastian of Lazard Capital Markets in a research note issued today.
Colin noted that despite an increase in numbers of listings, eBay's shortcomings in search functionality failed to drive a similar increase in sales. He warned that when eBay moves Store listings to core next week, it could exacerbate the problem and create a glut of merchandise in certain categories.
However, he said:
"eBay is simultaneously introducing enhancements to its Search, and importantly, several sellers testing the upgrade suggested to us that the relevancy of search results will improve. In addition, the updated Search algorithms will favor higher quality sellers (top-rated sellers) with the lowest prices, Auction items ending soonest, the most relevant item titles and descriptions, and free shipping."
Colin issued the report after attending eBay's On Location event in Atlanta where it hosted 500 people, offering classes and talks by the authors of business books, Duct Tape Marketing and The Toilet Paper Entrepreneur. While there, he conducted a survey of small and mid-sized sellers, and said it "suggests a fairly constructive view of upcoming changes, which are aimed at reigniting growth on the Marketplace."
Calling it a survey may be a stretch. He did not provide information about how many sellers he spoke with or if they were members of eBay Voices or Education Specialists programs, who were in attendance. (Does one really expect many eBay sellers who are focusing on other channels to attend an event such as this?)
Some of the key points from today's report:
- We expect eBay to announce another round of changes to the Marketplace in late April, taking effect 60 days later in late June, with a potential third round of changes this year planned for fall.
- CEO John Donahoe and President of Marketplaces Lorrie Norrington spoke at the event and met with sellers, which we see as indicative of the outreach efforts of eBay management to sellers of all sizes.
Colin also said he believes eBay continues to target incentives toward sellers that offer the best customer service along with access to high volumes of products/SKUs. (In addition to Daily Deals, eBay recently launched a promotion where it drove buyers to eight merchants through an eBay Bucks promotion.)
- The fee changes on eBay emulate several of the measures the company implemented last year in international markets. In those markets, eBay's Marketplace generated a significant increase in transaction volumes even through the economic downturn and competition from Amazon. While there are numerous variables that contributed to stronger International performance, we believe that changes to fees and other policies in the U.K. and Germany were largely responsible.
It's a shame no details were provided about eBay's changes to search - that could have a major impact on sellers. We'll see if eBay intends to stick to its promise of giving sellers 60 days notice of major changes.