eBay: Categories & Merchandising

Just returning to the point you made on merchandising. Clearly, online marketplaces, 50,000 categories, unlimited shelf space. How did you transfer the learnings from offline, organizing aisles and shelves, to the online marketplace?

Certainly, eBay benefited from a significant amount of talent that came and was attracted to the business. We had a number of really great merchandisers, from their past lives, when they came to eBay. They did a really great job of instilling the discipline and how you use the data to help organize the marketplace. Whether that was Meg Whitman, from her merchandising experience, to folks like Jeff Jordan, who was leading the US business of eBay, at the time. Then onto other folks, like Michael Dearing, another good merchandiser who took their offline experience into some other online ventures and then to eBay and instilled the discipline that was required to grow a business. Then you would have other merchandisers and other people that ran categories. Folks like Dan Neary, from the collectable side of things, that knew what they were doing, or Geoff Iddison, from the Sotheby’s business, into eBay at the time. How did they run businesses?

We launched eBay Sports, with Bob Hebbler. Folks that bought their offline merchandising and retailing experience, into eBay and that was a really important part and I think a really great way of getting things organized.

How were the categories organized, in the early days, as you did scale the marketplace?

At the outset, eBay was born in collectables, whether they be coins and stamps or comic books. Ultimately, it moved far more to practical things. Clothing, shoes and accessories was one of the first billion-dollar categories on eBay. The motors business was a business unto itself. It really just began to mirror the offline world. As those categories grew, you needed to create shelf space for them and then you needed to organize that shelf space. If there was a particular product or a category that was more popular than another one, then you elevated the merchandising of the category and the products within that. Sometimes, that would be seasonal. If you moved into the summer months, what are the goods that folks are requiring, in the summertime. eBay was a barometer for that.

When looking at organizing and showing certain categories at certain times, to different people, throughout the year? What was the biggest challenge in terms of organizing inventory or merchandising, on marketplaces?

Certainly, one of the challenges for eBay, is that the marketplace had become so big, that it became all things to all people. It got to a point that that size was, perhaps, its own worst enemy. As shopping experiences online continued to evolve, bidding or buying at fixed price, on eBay, may have been a sub-optimal shopping experience, compared to a category specific retailer, that may have entered the market. As an example, buying shoes, it was maybe a better shopping experience on Zappos, than it was on eBay. Or if you were buying a fashion item, it might have been better to buy on Nordstrom.com, than it was on eBay. Or when buying a computer, you may have had a better shopping experience elsewhere. So one of the challenges that eBay had, with its size, which was its greatest strength was starting to become its greatest weakness. It couldn’t recreate a marketplace specific to a category and it needed to break what was its greatest strength.

That’s what you see today where, arguably, eBay are getting picked off in certain verticals, for specific marketplaces or e-commerce offerings, to sell the category?