| Thu May 19 2016 16:42:21 |
eBay Answers Amazon Prime with Fast and Free Program
By: Ina Steiner
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 As Amazon continues to raise the bar on shipping, eBay is working on a new program to try to keep up. eBay executives told a Wall Street executive this week about an initiative in which it will give a boost to listings that offer free shipping and 3-day delivery.
eBay CEO Devin Wenig and Chief Financial Officer Scott Schenkel sat down with Mark May of Citi in two 1-hour meetings earlier this week. May wrote in his report:
"In the second half of 2016 eBay will launch a "Fast and Free" initiative where they promote items with free shipping and 3 day delivery. The company believes 3-day shipping is the threshold for acceptable delivery and notes that a substantial share of packages already meets this criteria, with 67% of their packages shipped during the holiday season having been delivered in 3 days or less. We view the strategy of not trying to compete head-to-head with Amazon on shipping as a wise choice, but it is encouraging to see management recognize that fast and reliable shipping are now table stakes for many ecommerce shoppers."
eBay has actually offered the Fast N Free program since 2011 - it seems to be more prominent during the holidays. The current page explains that the Fast 'N Free logo may appear on listings when both the buyer and the item are located within the 48 contiguous United States and when eBay estimates the item will be delivered in 4 business days or less. Some sellers have complained that eBay's estimated delivery dates are too aggressive and can lead to unrealistic buyer expectation.
Many retailers are concerned about Amazon Prime, the membership program that gives subscribers who pay $99/year free 2-day shipping on eligible items along with other benefits including Prime Video. Is eBay correct in telling Wall Street that its Fast N Free program is the antidote?
We'll have more about May's meetings with eBay's top executives in Friday's Newsflash ( available now) - in the meantime, let us know what you think of eBay's approach to dealing with consumer expectations around shipping. Will Amazon Prime be the downfall of eBay and/other retailers? |
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