LETTER FROM THE PUBLISHER

Greetings Readers-

Hope your summer is sizzling! I've gathered lots of information and the latest updates with today's online marketplace.

We'll explore eBay's changes to looking at Feedback for buyers, what's going on with Bing and get an inside scoop on decoding eBay's marketplace priorities and lots more.

Happy Summer!
Coach Danny

IN THE SUMMER ISSUE

• eBay Changes Feedback UI for Consumers
• Update on PriceGrabber & Yahoo Shopping Partnership
• Will Amazon Replace Bing Shopping?!
• The Future of Bing Cashback
• GMail Drive
• Decoding eBay's Marketplace Priorities
• Amazon vs. Google "Marketplace Wars"

"...you can do it yourself. That you have to believe in you because sometimes that's the only person that does believe in your success but you."
-Tim Blixseth

eBay Changes Feedback UI for Consumers

Now Has a 'Show me the Negs!' Feature...

On June 14th, eBay announced and then rolled out a tweak to feedback that allows users to filter the feedback and see just the positive/negative/neutrals instead of only being able to see the combined feedback as was the norm. We typically call this the eBay negative feedback filter and it has been a long time coming. I couldn't find any discussion about this, but this was raised as a feature by eBay in 2007/2008 if I recall and seller outrage made them rethink and punt on the feature at the time. It's always been an option in singapore and some buyers recommend going to the .sg site and loading a sellers feedback there.

In fact there are several online utilities that have been built to give buyers the same functionality such as:

• Toolhaus - This one has been around forever and has a lot of usage (20k+/m) as it is the top result in google for 'filter ebay negative'.
• feedbackselector - Allows you to also search the item text - e.g. show me all the negs for watch sales vs. 'all' sales.
• abef - A better ebay filter - this one is a very popular greasemonkey script.

Here we are in 2010 and eBay slid the feature out yesterday with nary a whimper from sellers. Let's look at the feature from both a buyer and seller perspective and I'll offer a strategy for sellers at the end.

Buyer perspective/use case and a tour

From a buyer's perspective, I do like the feature as it a) saves me time from looking through page after page of feedback and b) let's me educate myself on the types of bad experiences I could face and c) see what the seller has to say about it (if anything).

Here's a tour and a use case wrapped in one.

Let's say I'm considering buying something from eBay's new FashionVault flash sale experience - which goes under the seller ID stylepremium. I look at their feedback and notice three things of concern:

• They have a 99% positive rate which is promising
• They are not a top rated seller (which means they are a Above Standard Seller, but not eTRS)
• There's a gnarly 4.4 star on shipping and handling (for 12 months, 4.0 for last 30 days - ouch! Wait, doesn't that violate the seller performance standards of a 4.6 minimum? I digress. )
• 30 day negatives are 14 and there's 43 over the course of 6 months so they are accelerating

Fashion vault1


Before the negative feedback filter functionality, I would have to look for the 15 negatives in a sea of 800 feedbacks At 25 / page that would be 32 pages of feedback with an average of a negative every other page.

Now with this change, I can click on the '43' in the feedback ratings panel and it automagically shows me just the 43 negatives for the last 6 months for this seller: (click to expand)

Fashion vault2

A quick scan of this feedback reveals a lot about that 4.4 star:

• Most comments talk about two weeks shipping time as a problem
• There is some incidence of the wrong product being shipped.
• Generally the seller is issuing refunds for people that have a terrible experience.

Now as a buyer I can decide if I am willing to risk great prices in exchange for a possible long wait time, but know that if I get the wrong product, I can probably expect a hassle-free refund.

That's a lot more information than a 4.4/5.0 rating on a star.

Seller perspective

From a seller's perspective, you need to be aware that there is now a huge spotlight that buyers can shine on your negative feedback. Even if you are a 99% positive, you need to remember that buyers can and will choose to just look at your negatives. Also as you can see, buyers say some really scary stuff in feedback like fraud, scam, took my money, etc. So you need to be aware that a) they can say pretty much whatever they want and b) buyers can now see all of that on one filtered page without all those positives to help pull the punches.

eBay Strategy - Be sure to respond to all negative/neutral feedback!

This brings us to a strategy that was a minor thing we generally recommend, but has now gone from a 'if you have time to think about it' to a 'you need to make this a top priority part of your customer service processes'.

Some sellers don't realize that eBay allows you as a seller to publicly respond - right in the feedback page there - to feedback. I strongly, STRONGLY, recommend sellers start doing this now that this filtering is in place. Compare the stylepremium feedback where you only have the negative customer voice to this camera seller's (ETRS, 99.6%, 4.9, 4.7, 4.8, 4.9) feedback where they have responded to every negative:

Feedback feedback

You can see that a feedback reply takes a negative like: "Did not include the bag as advertised" and adds the seller's comment of: "Please call us and allow us to reconcile..." and more than softens the problem, it makes you wonder why eBay doesn't make buyers talk to sellers before leaving a negative (but I digress) - in any case it really helps with the perception and when you see it all on a page, you can tell this seller cares as they respond to every (well, all 3) negative.

In conclusion, this feature is going to shine a bright light on all of your negatives - you should take some time and gussy them up so they make it clear to buyers that you care and are going to attend to their problems as quickly as possible.

Will Amazon Replace Bing Shopping?!

From ChannelAdvisor

We take a deep dive...

The e-commerce world is a-buzz with the report from Jay Yarow at Forbes that he has heard that Bing and Amazon are in talks.

The report indicates that Amazon is pitching Bing on Amazon replacing Bing shopping (and cashback) instead of Bing doubling down and recreating the space post cashback's demise.

Let's look at this from both company's points of view to help handicap if a deal can be done, but first a brief background refresher.

Background

Microsoft started getting serious in the CSE space in 2007 with the acquisition of Jellyfish, followed up by the acquisition of Ciao. In 2008, they combined them with the old MSN shopping to form Live Shopping w/ cashback and re-branded when they launched Bing as Bing Shopping. The general ideas was to compete with Google by having a better product search experience - a two-pronged approach: 1) eat away at various google verticals such as travel, ecommerce, health, etc. and 2) grab share whenever possible (Yahoo deal).

According to Comscore, Bing is 7th largest CSE by traffic. At ChannelAdvisor they are the 7th by 'GMV', but growing rapidly and on track to be top-five in a couple of months (the cashback cancellation could change all that though). So in short, Microsoft has made some major progress in a 2-3 year timeframe.

CSE Audience


As part of the Yahoo! deal, all data and mock-ups we have ever seen indicates that shopping is not part of the deal (in other words, Bing won't power Yahoo! shopping results or have any Bing shopping integration there.

Amazon perspective

Now let's look at this deal from Amazon's perspective:

Pros:

• Access to Bing's 9m/m CSE shoppers and whatever additional users can be pulled in from the search side.
• Probably could get some access to some other Windows/Microsoft properties such as MSN, browser search box, etc.
• Maybe work to get digital river out as Microsoft's e-commerce partner

Cons:

• Amazon would probably at-best have to pay a heavy rev-share and at worst some 'non performance oriented' up-front payments and or guarantees (probably a combo actually). If I'm Microsoft, I don't want to lose $X of revenue from Bing shipping to have it replace by something lower, so you structure the deal to have minimum performance. Amazon would have some risk of not achieving this. In the history of internet deals, these mins can go really well or as in the example of myspace/google they can be a real problem if not structured correctly.

Microsoft/Bing perspective

Pros:

• As Yahoo! has proven (twice), outsourcing something like search/cse can be a very alluring business proposition from a financial/ P+L standpoint -

o You get to keep 100% of the revenue if you structure it right (wow!)
o But you outsource almost 100% of the expense - thus it turns what can be an investment area (losses) into one of pure profit. Based on the model of most CSEs, properly monetized Bing shopping would generate around $100m/yr, and cost $60-80m. An Amazon deal would strip out that cost and turn it into a $100m pure profit contributor (if structured correctly)
o In short, bean-counters love it.
• While everyone thinks about Amazon primarily as a retailer, we've spent a lot of time helping everyone understand that at over 30% 3P sales and with programs like Product Ads, Amazon is really becoming the best product search experience on the internet.

Cons:

• As Yahoo! has proven (once so far), outsourcing something like search (organic search to google) can be a tremendously bad strategic choice. The P+L picture you envision falls apart because:

o Consumers are smart - if they go to Yahoo! and see google search results, they start to ask themselves - wow, why am I going to Google for this, if I go straight to the source, maybe that's better?
o They always lose control of the user experience.
o Your partner is always misaligned and actually driven to get you out of the picture to avoid the economic over-hang.
• 40% of searches are product-oriented and these are the most lucrative searches from a RPC perspective. It would be a big decision to essentially cede this piece of the business and make the bet that Bing+Amazon is better than Google+GPS.


Can a deal be done?

It really boils down to two variables that only Microsoft knows:

• How strategic they view product search in the war with google (I think it's pretty darn strategic)
• How much $ they are willing to invest to keep fighting google. The Yahoo! deal is very very expensive (some speculate it's the reason cashback was ended) and if Microsoft has some financial pressure (yes hard to imagine for Microsoft, but they are investing/losing $700m/Q which is serious even by msft standards) then doing this deal could help fund a pretty big chunk of the Y! deal.

Update on PriceGrabber and Yahoo Shopping Partnership

By Mark Vandergrift, ChannelAdvisor

On March 11th, Yahoo's Product Submit program was officially ended and PriceGrabber's system began powering the Yahoo Shopping site. The added traffic from the Yahoo user base reversed a previous declining trend in traffic from the PriceGrabber network that ChannelAdvisor customers have seen since the beginning of 2010. The other major paid shopping engines (Shopzilla, Shopping.com, and NexTag) had been experiencing declines over that time frame as well but none as steep as that of PriceGrabber prior to the start Yahoo partnership.

However, accompanying the increase in traffic, ChannelAdvisor customers are also seeing degradation in conversion rate delivered by the PriceGrabber network. The trend is not drastic, but it comes at a time when the conversion rate for all other major engines is increasing. It's not uncommon to see conversion rates decline as traffic increases, but it is possible that the Yahoo Shopping's conversion rate, which historically has been much lower than average, is pulling down the conversion rate of the PriceGrabber network.

If you advertise on PriceGrabber, continue monitoring the conversion rate of each of your offers and be sure to take action on those that are incurring high levels of traffic but not generating sales.

The Future of Bing Cashback

Cashback was successful for many advertisers, delivering great ROI and giving customers outstanding rewards from our advertising revenue. Unfortunately, it did not deliver the scalable change in Search behavior that Bing had hoped.

We will be hearing more from Bing later this summer on the evolution of Cashback. In the meantime, they are focusing their teams on delivering a seamless experience in their Search Alliance with Yahoo!

For customers, this means that it’s business as usual and they can earn Cashback until July 30th at midnight PST. After that, Cashback will discontinue, and customers will be able to redeem any cashback they have earned, and Microsoft will provide 12 months of customer support to ensure a smooth transition.


Some key notes that apply specifically to exisiting Cashback Shopping business:

• Continue sending and updating feeds

• Merchant Center will be retired on September 29, 2010. Its migration to adCenter has been postponed, no further action is needed from advertisers

• The original CPC feed program is also being discontinued as of July 30, 2010.

• Bing is evolving Cashback Shopping into a new free feed program. They will have more details in the next few weeks.


More from Bing...

bing.com/community/blogs/


Bing Cashback

ONLINE RESOURCE OF THE MONTH

GMail Drive
Reviewed by CNET Staff

GMail Drive takes the short stack of gigabytes given to Gmail users and turns them into a virtual drive accessible from your computer's file tree.

In short, it creates a shell name--a space extension that creates a virtual file system around the account. This lets you treat those 5 gigs (at the time of writing) as a standard remote drive. You can drag and drop files into the drive, or use standard cutting and pasting. When you add a file, it sends an e-mail to your Gmail account with the file as an attachment. If you delete a file from the virtual drive, it deletes the associated e-mail, as well.

There's not much else users can do with GMail Drive. It's an effective tool, but lacks any additional features. It does allow for proxy authentication and secure HTTP, it preserves long filenames, and it can auto-login, a useful touch for those who want to regularly use their Google account for file transfers.

Download here:
download.cnet.com/GMail-Drive

Decoding & Analyzing eBay's Stated (leaked?) 2010 Marketplace Priorities...

by Scot Wingo, ChannelAdvisor


In the World of the eBay ecosystem, we have our own lingo that is deeply ingrained and we forget sometimes that people have no idea what we are talking about.

Over at the eBay Ink Blog, RBH posted a picture of eBay's priorities from a sign in an eBay building:

Ebay 2010 Priorities


It's titled "eBay Marketplace Goals 2010" and has these three called out goals and then 7 priorities. They are chock full of eBay lingo, so I thought it would be fun to a) decode them and then b) analyze them.

eBay Goals Translation

• Net Promoter Score (commonly called NPS) + 10 ppt - NPS is something I've been meaning to blog about for a while in detail as it has become core to eBay (as is clear from this goal) - it is a measurement of consumer sentiment and word of mouth. The goal here is to improve it 10ppt which translates to percentage points (not powerpoint slides, but that is kind of funny because eBay uses a LOT of PPTs).
• Bought Item Velocity + 6 ppt - This is interesting as eBay doesn't really have a metric publicly called 'bought item velocity'. Pure speculation, but they do have the 'sold item metric' as shown here in this graphic from their Q1 conference call. Perhaps this bought item velocity is a second order measure of sold items and they would like it to increase 6 percentage points y/y (from 31% to 37%).

Ebay Sold Items


• Market Share - Maintain - JD has stated numerous times that in 2010 as part of eBay's turn around they will grow 'with' e-commerce (vs. below -08/09 and above - 2011+), so I'm going to guess this is basically saying that eBay will grow with e-commerce. Sidebar - there's a growing disparity in e-commerce growth metrics. Comscore is coming in very bearish with single digit growth and the US dept of commerce is at 14.3% - comscore is the easier metric and if you use that, eBay is at their goal, if you look at the USDC, they are not there.

eBay Priorities Translation

The sign lists 7 priorities along with the three goals:

• "Retail-like" trust levels by reducing BBEs and protecting buyers- BBEs are Bad Buyer Experiences, kind of like the Amazon ODR (Order Defect Rate). Inside of here you have all kinds of things that can go wrong like (SNAD - Significantly Not As Described, INR - Item Not Received, etc.) all of which result in a claim or low NPS score, or the dreaded 1/2 stars of death.
• Enhance selection and value in CSA - CSA is the acronym for the Clothing Shoes and Accessories (now rebranded Fashion) category. More on this in the analysis section.
• Deliver value across the site - Great deals across the site.
• Scale B2C sellers and improve efficiency - B2C (business to consumer) sellers probably refers to the larger merchants that are coming into the system like buy.com, disney, etc. Scaling them means helping them grow much larger. Deal of the day is one lever for this, perhaps there are more to come.
• Defend C2C seller business - C2C are consumer to consumer sellers - a.k.a. 'small sellers' or 'casual sellers'.
• Improve the eBay buyer experience - Self explanatory
• Build our advertising business - ?! More on this in analysis.

eBay Goal and Priority Analysis

Let's start with the goals (NPS, Bought Item Velocity and market share) - these are all good and very much in line with what eBay has been telling Wall St. as well as sellers. It is a bit of a bummer to see that the "Market Share" goal is "Maintain". While realistic, that's a hard one to get the troops rallied and definitely not in the Meg Whitman realm of a BHAG that she seemed obsessed with. However, in context of losing market share for the last couple of years, it's definitely a step up.

The priorities are not what I would expect. First let's think about the order of these. (buyer satisfaction, CSA, value, big sellers, small sellers, buyer usability, ads). Personally, I worry that the buyer experience on eBay is so outdated that it will become increasingly hard for them to keep market share for the next 5 years if they don't make this a priority. I guess you could argue that CSA is where they are doing some pioneering, but the fact that buyer usability is goal number 6, right above ads, makes me nervous. Personally, I'd say they need to do this order (FIX SEARCH, buyer usability, buyer satisfaction, big sellers, small sellers, CSA) Yes I left ads off and added search in all caps ;-).

(rant on)

Ads? It is disconcerting to me that eBay has ads on here. I hope I'm misguided, but I'm assuming this is something like AdCommerce and ads on the site and not eBay classifieds (not part of marketplaces). eBay should focus on GMV and not ads. Period.

Personally, I find the AdCommerce ads program to be terrible from all angles:

• Sellers - There is no way to measure closed loop ROI of the system. It's 2010, I can't imagine why anyone would pay for clicks and not know if they turn into conversions in this day and age. We do not recommend sellers use the program for this reason alone.
• Buyers - Google is able to show so many ads on the sight because of one reason - relevance. Google is religious about making sure ads are as relevant as possible. When they do that, it results in a BETTER experience than just organic results because the ads enhance the experience. From a buyer's perspective, the only good thing about the AdCommerce ads are that they are at the bottom of the page and hopefully consumers don't see them very often. I've found they are a HUGE step backwards in the buyer experience because 99% of the time they are not relevant. Here's a great example. I just did an iPad search and I am presented with these three ads: (click to enlarge)

Ipad Spam


Scanning the pictures, you may think I'm off-base, they seem decent. But dig a tad deeper. The first ad, while it has a picture of an iPad, is actually for a Arwen evenstar pendent (all my LOTR peeps) will appreciate this, but not your average IPAD SHOPPER?! Really!?!

The second ad seems decent - someone has an iPad on sale with free shipping - ok, very relevant - I click through and find that, well, that's not really the 'case', it is a case and not an iPad - a clear decision by this advertiser to mislead the buyer. This ad would last about .00000000000000000000000000000001 seconds on Google, yet here it is happily spamming up the search results for one of the top products.

The third ad is at least clearly an ipad case (at least the image says IPAD CASE). The ad says: "Best Deal Here and "reat (sic) Deals starting at $.99.....". Again, this ad would not last a second on Google, yet here's an ad with a typo.

So let's recap: Three ads: one is nothing like what we are searching for, second is misleading at best and the third has a typo: Useless Consumer Spam: 3, AdCommerce: 0. Spam wins!

Finally, eBay seems to let anyone advertise in this program. Featured listings got a LOT less spammy when they restricted the program to eTRS, they should at least do the same here and in fact, I don't get why you wouldn't just put a bullet in the whole program - it really is just that bad.

(rant off)

CSA? In the Q1 conference call, JD said this of CSA:

"So we are starting from a strong position as the number one clothing site based on sales and traffic and we begin to expect traction from these initiatives in Q2 and beyond. In fact, we expect to generate more than $5 billion in GMV from clothing, shoes and accessories."

So it seems like eBay has decided this category is an area they a) are top and b) want to stay top. This is great and it's good to see them getting aggressive, especially in light of Amazon+Zappos that is a counter force in e-commerce CSA. My only concern is that they neglect the other 10 billion dollar categories on eBay. They kind of capture this with the 'deliver value across the site' priority, but would it be prudent for eBay to win the CSA battle and lose autos, CE/CMP, sporting goods, home+garden, jewelry, toys, collectibles?

Amazon vs. Google...

by Chris Dixon

There's lots of buzz in the media about the "Marketplace War" between eBay and Amazon, the "Search War" between Google, Bing, Yahoo! and the "Mobile War" between Google and Apple.

Today, serial entrepreneur Chris Dixon shines light on the real potential loser from Amazon's dominance - Google.

We've long thought at ChannelAdvisor that it is interesting that Google has taken their eye off of the core business. It's somewhat reminiscent of eBay's focus from 01-08 on all things 'not eBay': China, Skype, etc. which left the core marketplace business atrophied and open to competition from Amazon.

Google gets approximately 40% of its revenue from the 'retail' vertical, yet since Google Checkout (atrophied), hasn't done anything to really innovate in the vertical. In the meantime, Amazon has created the best product search engine which is gobbling up share hand over fist. Sooner or later consumers will stop using Google to start the search, and just use Amazon.

A couple of data points indicate this is already happening:

• Amazon's revenue is growing faster than Google on a y/y basis
• Amazon's traffic is growing faster than Google's
• For many customers that are on both Google (Adwords) and Amazon, Amazon's same-store-sales are growing much faster than Googles.

Perhaps with the appointment of Stephanie Tilenius as VP of e-commerce at Google, they realize this is a potential problem for them. Stephanie gave a talk at ChannelAdvisor's Catalyst recently and hinted at some big things to come. She also spoke in early June at the Internet Retailer Conference and Exhibition (IRCE for you home gamers) and the title of the talk was "Google enters the e-commerce arena".