Wednesday, November 30, 2005

Ebay vs Amazon

MSNBC report EBay traffic leads online shopping sites states that on 'Cyber Monday' Amazon got 5.6m visitors compared to 11.7m for Ebay. The share price of eBay (EBAY) has almost doubled over 2yrs, Amazon (AMZN) has remained the same.

Why is EBay in such apparent ascendance and Amazon looking so tired?

When you visit the Amazon US site as a guest user - there is not one single book presented on the home page - DVDs, toys, watches, XBox 360 and jewelry upsold all over the page - but no books. When you try to navigate to a book you have to wade through lots of unrelated upsell, and many books you would expect to be there - just aren't.

When you visit Ebay - you get what you expect - auction stuff, lots of it, with very little unrelated upsell - and it's easy to navigate to exactly what you want.

Until last year I used Amazon weekly - I originally stopped because of their slow delivery times (same reason I don't use Dell). When I buy online I don't want to wait more than two days for my goods - unless I'm getting a significant discount for the delay.

Until two months ago I had never used eBay (because of concerns over fraud) - now I'm using eBay weekly as they have fixed the fraud issues.

Has the massive influx of new product ranges diluted Amazon's content quality and left them uncompetitive against the more boutique retail sites? - it's very hard to monitor every SKU to be price competitive or offer detailed technical support for every product or offer simple navigation that gets the customer to what they want fast.

But isn't Ebay just an aggregation of all retailable products into one site?.

In my view the difference is the navigation and quality of the listings.

Ebay provides a superb navigation interface and outsources the content to the sellers on a per product basis - they effectively list 100,000s of products with one product manager per product - who maitains the product's description etc. - and they don't clutter the page with unrelated upsell.

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Sunday, November 27, 2005

Web 2.0 and ecommerce

I'm not regurgitating other posts on this, but I'd like to throw my thoughts in.

2.0 is not just about user driven content, it's also all about convergence. 06/07 is going to see a step change in TV delivery (IPTV), new online games systems with browser type features (XBox Marketplace) and much more internet usable mobile devices like the KJAM. It is very possible that some of the technology previewed at the recent MS PDC (like Avalon) will work across all these platforms in a common way.

This could impact the 'long tail' feature of current internet browsing experience as these platforms do not lend themselves to information rich web sites. It is likely that ecommerce companies will be forced to reduce the number of products presented to display on the smaller screen formats, and reduce navigation options to work with alternative input devices like joysticks and TV remote controls.

Retailers will focus on only presenting their top selling products through these channels - with a simple checkout system (probably controlled by the OS manufacturer).

Sites will come in two flavours - an information rich version aimed at PC browsers (as now) and a more graphical, easier to navigate, reduced product set version aimed at TV, consoles and mobile devices.

It's possible these devices could be portal locked - making it harder for users to access sites and content not championed but the portal owners (e.g. getting a listing on XBox Marketplace). Whoever controls the OS on these systems will control the content.

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Does free shipping in US really make a difference?

In an interesting piece on MSNBC titled Web sales expected to spike on ‘Cyber Monday’ they quote a SHOP.ORG survey putting free shipping as the biggest draw to sites selling online.

In my opinion this is a red herring - customers may respond when asked that free shipping is a big issue - but when it comes down to making the decision on who to buy from (especially with all the shopping aggregators around) - it comes down to 'headline price'. TIGERDIRECT.COM are the masters at this - the headline price often includes a rebate (from a post back coupon) that isn't fully obvious until checkout, and they make you input all your personal details before quoting any shipping costs.

Once someone has made the decision to buy online and not from the high street (which is a whole other set of motivations) - I would put the factors important to deciding which site to buy from in this order:

- Price
- Stock availability
- Customer service reputation
- Shipping costs

Other factors like site performance, stocked accessories, returns policy and contact information also have an influence - however, a compeitive price is the single biggest draw any ecommerce site selling commodity items can have.

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