|Wed Oct 22 2014 16:41:42|
Who Is eBay's Target Customer?
By: Ina Steiner
eBay is giving a lot of thought to who exactly is its target customer. With such a broad marketplace and offering so many formats (auction, fixed-price, classifieds) and conditions (new and used), it may seem to some like an odd question.
eBay CEO John Donahoe said some interesting things about this during the recent post-earnings conference call with Wall Street analysts.
"Looking ahead, Devin (Wenig) and team are sharpening eBay's strategy focus and target customer segment. eBay will be focusing more aggressively on where it can compete and win and deliver sustainable growth."
And in response to an analyst's question, Donahoe said:
"I said earlier that one of things I think or I know you'll see eBay Marketplaces doing is beginning to focus more on our target segment. The largest retailers in the world all have pretty clear articulation of who their target consumer is. And eBay has a very clear target consumer who forms the bulk of our customer base and frankly is a large part of the market.
"And Devin's driving a process where we're getting even more clarity about who that target consumer is and how we can position eBay to win with that target consumer and make sure we're most aligned with that target consumer and not - we won't be aligned with necessarily everyone else in the market. And so, I think you're going to see a more focused eBay. And I think it's going to be a more special eBay, frankly anything a large retailer or a large commerce provider has to do.
"I also think as part of that some of the - there is an enormous amount of money that's going to be spent as you see in same-day delivery in those services and I don't think that's going to be - that's not essential to our core target consumer.
"What you can see though that our core target consumer likes is they like to avoid shipping costs, and so things like our Argos partnership in the UK I think has something that's aligned with our target consumer where our small sellers are able to provide same-day pickup or pickup that a consumer can avoid shipping expense and get the best of both worlds without eBay investing tons and tons of money. So I think there are some creative ways of addressing that.
"So, eBay, you'll see I think more focused on our target consumer."
One reason to profile a target customer may be its desire to attract more advertising dollars - advertisers like a nice neat profile of who the customer is that it's reaching. I was also reminded what Donahoe said last year about eBay's search innovations:
"We're testing a new user to eBay that's never been to eBay should when they show up we only show them fixed price, brand new items from top-rated sellers. It's a more familiar commerce experience and then as they learn eBay they get the wider experience or should we be showing a woman buyer who buys in a clothing - with a heavy Clothing, Shoes & Accessories buyer a different experience than we show up a 42-year- old man that buy steadily in auto parts."
Who exactly is eBay's target customer? The company says it has 800 million listings and that 79% of Marketplaces GMV comes from fixed-price listings. If eBay is focused on what it thinks is its target customer, does that mean used, hard-to-find, collectibles, auctions, and non-commodity goods could suffer as a result?
What do you think Donahoe means when he says eBay will align with its target consumer, and what will this mean for you as a seller?