The Best iPhone out of 10,000

At the annual Goldman Sachs Technology and Internet Conference in San Francisco, eBay’s CEO Devin Wenig outlined the future for eBay. The key topic was their transition to a catalog, and thus becoming relevant to retail as a whole. Thanks to years spent on the structured data initiative eBay is now able to rethink how customers shop.

Since September 1995 when eBay first launched, 22 years ago, eBay was a collection of listings grouped by categories. Since most things sold were used items sold as auctions that was the best model. But over the last decade they transitioned to selling new items for a fixed price; now as much as 90% of items sold are not using an auction. Yet the website functionality has mostly remained the same.

Today eBay’s catalog is an endless list of repeated products. Every new iPhone is shown as a separate listing, even though they are all exactly the same except for the price. Amazon addressed this a decade ago by introducing the “Buy Box”, a method of grouping sellers for each product, and showing a single best deal to the customer.

Searching for “iphone” on today returns 87,663 results. In October last year eBay launched group listings - a feature which groups search results by product. Once enabled it reduces the list to 9,008 grouped results. eBay wants to take it further, and make this the default experience.

“Nobody wants to go through 10,000 iPhones. Show me the four best options.”

Devin Wenig, CEO of eBay

eBay is correct that the way eBay functions today is not how most people shop. To attract new customers, and to attract brands they are forced to give up the 22-year old model, and instead rethink the whole eBay shopping experience. This will inevitably upset some of the existing buyers, and sellers. But for eBay to be relevant a decade from now they can not continue using the current approach.

The challenge for an online catalog is size. Many boutique websites function great with a few dozen products, but both eBay and Amazon have hundreds of millions of products for sale. Most of which is supplied by sellers. Managing quality, and implementing discovery features is a challenge for both. The rise of private labeling is challenging the catalog too. No customer can reasonably decide between products if they all are exactly the same if not for the logo.

Amazon Millions of T-Shirts

Amazon doesn’t have as many search results for “iphone”, but it has tens of millions of results for “t-shirt”. Nobody wants to go through 10 million t-shirts. They want to see the ten best t-shirt options for them.

Amazon doesn’t know which 10 t-shirts are best for anyone. They made the shopping experience manageable by ranking products by a mix of popularity, and quality, yet in categories like clothing that is not enough. This is getting “worse” every day as thousands of new products get added to the catalog. Technically the Buy Box is still there, but a customer is left to first decide which of the many products is the right one.

Thanks to the marketplace reached 75 million products listed, more than doubling in a year. While an exciting news story now, if they continue doubling every year soon they will face the same problems as Amazon, and eBay are having. At the end of the day there has to be a sense of care for the catalog, even if Amazon doesn’t appear to care about it.

eBay was surpassed by Amazon years ago thanks to their investments into infrastructure like warehousing, and fulfillment. And yet eBay appears to be more aware of the challenges of shopping on marketplaces. By implementing grouped listings eBay is going to make shopping for say electronics a better experience. But their catalog, and Amazon’s too, is full of tens of millions of other stuff. Grouping those, and answering the discovery question which ones are the best for a customer is the ultimate challenge.

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Juozas "Joe" Kaziukėnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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