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Internet Retailing 2010: Interview with Clare Gilmartin, EU Marketplaces vice president, eBay

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In recent weeks we’ve been looking ahead to our annual conference Internet Retailing 2010 by focusing on key speakers at the event. Today, in the first installment of a double helping of interviews with leading ecommerce players, we hear from our final keynote speaker, Clare Gilmartin, EU Marketplaces vice president, eBay.

Internet Retailing: What have been the most important or successful developments that eBay has made to its marketplace in recent years?

Clare Gilmartin: In 2009, eBay celebrated its 10th anniversary in the UK and over the past decade we have retained our position as the largest online marketplace globally. We’ve done this by revolutionising the way in which ecommerce operates and how people shop online. Over the past decade: 38.2 million people have used; 7.4 million people have sold 1 billion items, the equivalent to more than 16 items for every person in the UK.

As online shopping has evolved, so has consumer buying behaviour although people still equate eBay with the auction-style format, the reality is that new and fixed price sales account for over 59% of sales globally. People now look to eBay not just for the ‘weird and wonderful’ items, but to purchase discounted goods from the businesses and brands they love, including well known high-street names and over 160,000 registered businesses. Sellers of all sizes use to reach the UK’s largest online shopping audience of approximately 17.7 million visitors. We are the UK’s largest online marketplace.

In April this year we launched the eBay Fashion Outlet which has more than 24 high street retailers and brands, such as Kookai, Argos, Tesco, Littlewoods, Office and Debenhams selling large volumes of stock through eBay at an average of 70% off RRP. These retailers focus on new and fixed price products with fast delivery and have great returns policies, which is what buyers want. Alongside these discounted goods, we also promote stand out deals through our weekly and daily deals programme. For example, in September outlet sellers sold over £1m worth of products in just one week.

eBay continues to innovate in order to stay ahead of the curve, ensuring we are giving consumers what they want. Buying habits change frequently as emerging technologies take hold at startling rates. Consumers want to be able to shop online from wherever they are, which is why we’ve been aggressively developing our mobile commerce proposition.

In early 2009, we launched the eBay iPhone app integrating PayPal allowing for an end-to-end mobile shopping experience. We launched the eBay Blackberry app in June 2010. Mobile is now the fastest growing channel month over month, driving over $600 million in the value of goods sold on the site in 2009. Over the past year: 15 million people across the globe have downloaded the eBay app and every second, an item is purchased using it. The UK has seen the greatest adoption of mobile ecommerce, with more Brits shopping through the eBay app than anywhere else in Europe. They account for approximately 64% of the items bought through the eBay app across Europe. They bought more items through the app in one month than French consumers purchased in the whole of 2009.

IR: How are customer expectations and behaviour changing the online market?

CG: Buyers’ online needs are becoming more sophisticated. We need to match their habits and be attractive to them; we need to offer a retail-like experience online and at the click of a mouse. Consumers want to find their favourite brands online, they want to find them quickly with a wide selection and they want great deals.

We are focusing on targeting specific buyer segments. For example, we’ve already launched the eBay fashion outlet where buyers can find over 20 top UK brands including Kookai, Office, Superdry, Bench and Debenhams with an average of 70% discount offered versus RRP. In the forthcoming months, we’ll be rolling out other specific categories including technology and home and garden among others.

A wide selection is also important; it’s not just about offering the latest models. In the early days of selling online it was acceptable to customers to find a much smaller edited selection from the larger range found-in-store. But this has changed markedly and today it could be claimed that the internet is the equivalent of a shop window in every home and that retailers must therefore take advantage of the immense opportunity that this presents. They should at least have their full range available online and ideally an extended offer. Take a Blackberry as an example. You can find the newest Blackberry on eBay but you will also find the same offer on other online shops. The price margin is very slim. A lot of merchants make it their focus only to offer the newest products. But on eBay you can also find earlier models, still new, but 30-40% cheaper.

Trust is also important for buyers. In March we launched eBay Buyer protection which protects buyers who purchase items on eBay with payment made by PayPal. This programme has had a major impact on buyers’ overall confidence of shopping on eBay.

IR: What are the other factors that are important in your view in influencing the way online retail is developing?

CG: It might be over 10 years since the dotcom boom but selling online is now arguably higher up the agenda of many retailers than it has ever been. The big difference a decade on, however, is that selling over the internet is now regarded as only part of a retailer’s core objectives as they now recognise that online stores should be part of a multi-channel proposition. The online channel has been particularly important in recent years as the recession has dealt the retail sector a particularly harsh hand. The growth of online sales has helped prop up many organisations. eBay has found that for as many as two-thirds of the retailers selling across its platform, online sales were making a significant contribution to the overall business. This situation looks set to continue, judging by the continued strength of the online channel and the weakness of physical store sales.

The proliferation of mobile devices and buying habits changing with these technologies is also important. Mobile devices as serious platforms for content and mobile commerce have taken off following the phenomenal sales of the Apple iPhone and already half of the UK population is using mobile applications. eBay has ensured it is at the forefront of such retail and technology innovations and this is why more than 15 million consumers worldwide are accessing its shopping platform via mobile devices. Already there have been more than 12 million downloads of the eBay selling app worldwide. A growing number of these shoppers are reaching eBay for the first time from the eBay iPhone app which has attracted sales of $600 million in only its first year. The forecasts are for sales of $1.5 billion in 2010 and the future looks even brighter as only 13% of internet users currently have access to the internet via mobile devices, according to the IMRG in the UK.

Buyer behaviour is another crucial factor. As technology advances, the desires and demands of consumers constantly change. Whereas they were once just happy to place an order on an uninspiring website and receive a delivery to their home a week later, today they want convenience and flexibility, buyers are increasingly demanding next-day delivery and to buy from a specialist online store rather than a generic website. The driving force behind this is the way shoppers now buy various products and expect a different shopping experience according to whether they are buying fashion, gardening items or homeware goods. eBay has reacted to this changing face of online shopping by making the shopping experience on eBay more comfortable, exciting and relevant for particular shoppers. Beginning with its Fashion Outlet site, it is creating specific websites for different vertical retail categories.

To remain competitive, it’s crucial that we continue to invest in new innovations giving buyers reasons to keep returning to the site, as well as attracting a new audience of savvy shoppers. We constantly undertake research with our buyers and the recent launch of the new Fashion Outlet is innovation result of buyers telling us that they want a different shopping experience on eBay when searching and buying fashion items. Within the Fashion Outlet are incorporated various innovations including: a visual search function to allow shoppers to find similar looking items; a gallery view as the default in search; a quick look layer to ensure only the most relevant information is shown; and a new category home page that highlights the most searched for brands, most watched listings and best-selling products. Such an innovative initiative will make the eBay proposition to major retailers and brand manufacturers even more attractive as it will enable them to display and merchandise their products in a significantly more powerful way. The effect will be to drive even more potential buyers to their goods. At the moment eBay can offer 92 million active users but it is ready for more.

IR: Looking to the future, what wider changes do you foresee, affecting both eBay and in the wider ecommerce market?

CG: Ecommerce is still in its infancy. It makes up about five percent of the entire world trade. We believe this figure will increase to 15-20 % in the next five years. The borders between online and offline will eventually disappear. We need to offer a high street-like experience at the click of a mouse. Consumers want their favourite brands online, they want to find them quickly, they want a wide selection and they want good deals.

Mobile will also be a key driver for the future for ecommerce. We are already beginning to see applications bringing the internet into stores where customers scan a product through their phone and immediately get the cheapest online price displayed.

Retailers need to adapt to the emergence of social media and online networking. Many have found it a tough new discipline to get a handle on but there is no doubt that it will play an increasingly important role in the online activities of retailers in the future. A recent PayPal survey highlighted how social media now impacts consumers’ decision-making finding 18% of online shoppers say they rely on social media sites like Facebook and Twitter for their ‘lifestyle’ decisions. The challenge for retailers is how to subtly engage with consumers through these various social media platforms.

Clare Gilmartin is a keynote speaker at our annual conference, Internet Retailing 2010. To find out more or to register click here.

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