The corona crisis has spurred online retail. How much will it affect Ebay?
In fact, we have gained a lot of new customers and existing customers buy significantly more. At first we were afraid that many of them would come one day, such as buy masks, and then leave again. But this is not the case, both effects seem to be sustainable. But we also take various measures to retain new or reactivated customers on Ebay.
Which are they?
For new customers, it is important to get them to make another purchase as quickly as possible; we offer various incentives and discounts. In addition, the number of customers who only buy something but have not yet used something to sell on Ebay has increased. Through a special program, we currently try to encourage more than five million customers to sell, for example, by offering them vouchers.
And what do you advise stationary retailers who are now increasingly relying on online sales?
The biggest challenge is digitizing inventory. This is not often talked about. For example, it is not enough to simply photograph all the articles and place them online. You also need to think about what the customer wants to know and see. This is a minor technical barrier than a matter of access. Those who do well think from the customer’s point of view.
They support retail with Local Heroes and Ebay Cities. How does it work?
We introduced the local heroes a year ago. Because in every city there are companies that only operate there. For example, Engelhorn is the best dog for sports and fashion in Mannheim. We help them reach a range that they do not have locally. As an additional service, we also recommend what the images should look like or what can be improved using logistics and payment methods. In the corona crisis, we expanded the program again. Resellers receive a free Ebay premium store for six months and benefit from our concierge customer service. In addition, for three months does not pay any sales commission. As a result, we have already acquired more than 5,000 new sellers. The Ebay cities initiative has receded into the background, but we will revive it and launch a new, significantly expanded one.
What are you doing here?
It all started with a query from Mönchengladbach and now two or three more cities are included. The aim is to give cities and local retailers their own websites and thus greater visibility. With Ebay Cities 2.0, every district city that wants to be able to build its own platform, even under its own domain. We provide all the technology, so the mayor, city leader or business development department doesn’t have to worry about that. This means that resellers are immediately connected to our entire system and we may be able to acquire resellers who would not otherwise come to us. The name may change, but will be available early next quarter.
Are there also changes in payment processing as it is?
We have a wide range of items and vendors. The downside is that understanding how to pay and when it can sometimes be a little tricky. We want to make it easier for the end customer and ensure that he is always offered the same payment options. This is the core of our new payment processing.
Ebay Germany sits at the gates of Berlin; at Europarc Dreilinden in Kleinmachnow. Photo: picture alliance / Bildagentur-o
What is the schedule and status of implementation? When will it become mandatory for traders?
Since the start of payment processing, we have already processed payments for 340,000 merchants; in the second quarter alone, this represented 20 percent of the volume of payments. We are therefore well on our way to integrating most retailers around the world into payment processing as early as 2021 and completing the payment processing implementation process in 2022.
They also want to improve delivery processes.
Precisely because many small retailers do not have their own logistics. We offer them to handle all logistics through us. The customer then does not have to wait five days, because the person who usually packs the shipments is ill, for example.
Is that enough to catch up with Amazon?
When it comes to same-day delivery, that is, same-day delivery, we’re lagging behind, so we won’t be offering it soon. Otherwise, Amazon only supports smaller retailers if they sell exclusively on Amazon. This is not our approach, because our fulfillment service is open to other platforms as well. So we would also send supplies for the retailer to customers who ordered through Amazon.
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Platform economics is now also a political issue. What regulations do we need to make the market fairer?
We don’t stand up and say we love them. However, it is clear that we do not have our own stocks of cells, so we do not compete directly with our resellers. We never have to make a decision about whether to limit our own business or the business of the sellers who sell in our market. But above all, it is a question of market power due to the ever-increasing ecosystems that are being built. With more and more offers, such as streaming, there are locking effects in the system, where the customer can only decide whether to be completely inside or completely outside. That doesn’t mean Amazon is evil, no: Amazon does a great job. In the end, however, I see the risk of a monopoly in that. The question is whether companies are becoming so strong and large that they are becoming dangerous and weakening more and more related industries. If you haven’t yet?
So you don’t want to become so big and powerful with Ebay-Plus, your competition for Amazon Prime?
No. Firstly, because we can’t do it, and secondly, because I don’t want to copy something that other people do great. My strategy is always to see where my strengths are. We are the only large platform on which to buy and sell. Of course, this is also extremely exciting in terms of sustainability. We are the only large platform where you can buy everything from around the world, under all conditions. I want to emphasize these aspects and not try to be the second Amazon.
Should Ebay-Plus continue to exist and how much does it use?
Unfortunately, we can’t name or name numbers, but we’d like to get even more customers for Ebay Plus. In this regard, we will continue to develop the program and its specificity for Ebay. I think Ebay Plus was too similar to other programs. Rather, we want to strengthen the issue of “buying and selling” and reward customers who participate in this cycle.
Does this mean that we are focusing back on trading in used items? Recently, it has often been pointed out that 80 percent are now new products.
Our current campaigns say “New, used and very rare” and “Buy and sell on Ebay”. And these are our topics. If you are looking for products as an end customer, you are usually interested in this choice. Sometimes I just want something new. And sometimes it’s an older or refurbished device. Or I want to buy from a professional retailer for warranties and sometimes an offer from a private retailer is fine. If I find it all on one platform, as in our country, it is an extreme advantage. Therefore, I do not want to make a 100% shift to the goods used, but rather to play this width.
The online store expects a high turnover of Christmas shops – Amazon should be of great benefit. Photo: REUTERS
Still, you often don’t know what Ebay means. How do you want to change that?
Ebay has something to catch up with. We need a clear profile and a lot of educational work is needed for that. And we will do that now as part of our campaigns.
For both used and local ads, Ebay is strong, how much does sales hurt?
Germany is the only country where our advertising and our main marketplace business have the same name. It was a smart move and that made this store so big in the first place. In almost all other countries it has different names and not the same order. Otherwise, it’s a completely separate thing. So for us, there are no pains associated with separation in terms of technology or customer base. We are also the largest shareholder of the new company.
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Your own offer for young customers, such as Catch, doesn’t really fit in there either, does it?
We started the catch when Wish also entered the German market. These were cheap goods for young customers. But then we found out we didn’t even need it. Because young customers who are looking for such goods will also find it with us. Therefore, it no longer makes sense to spend a marketing budget to build a secondary platform. That’s why we passed the Catch to another operator.
The next two months should be life for e-commerce: Christmas plus corona effects. How are you preparing for it?
An open market like the one we have has one big advantage: we do not have one supply chain, we have hundreds of thousands. Our warehouses are everywhere. You saw it with the first corona wave. Initially, most online retailers had trouble adapting warehouses to new demand. This was not a challenge for us, because we have a crowd logistics system. And even if there is a shortage, there may not be a thousand sellers behind the product for the offer, but only 500. However, the goods remain available. And even if it goes away, there is a global marketplace where you can look for dealers abroad.
Is it used a lot?
Yes. For example, many more pools were sold this year. And if there are too few attractive offers from German retailers to meet demand, our system is played a lot from Italy or Spain, where many professional pool retailers are based. This is the advantage of our international and open platform, which it manages itself.
Oliver Klinck (52) has been working at Ebay Germany since 2018 and became boss in September. Prior to that, he worked for 15 years in various positions in the Otto Group.