Tag Archives: eBay

Why the UK is still a nation of small shopkeepers, even on the web

The 10 most visited UK shopping sites ending August 24, 2013 according to Retail Week magazine who use Hitwise, is shown below. As the table indicates, the market share is stable.

10 most visited UK shopping sites week ending August 24, 2013
10 most visited UK shopping sites week ending August 24, 2013

This table only shows half a story though, because the top 10 make up just under 40% of the total shopping web sites. The following pie chart shows those top 10 as a pie chart along with the missing 60%.

Pie chart for 10 most visited UK shopping sites week ending August 24, 2013
Pie chart for 10 most visited UK shopping sites week ending August 24, 2013

Even this pie chart doesn’t show the full story though, because Hitwise should really aggregate the sites together – i.e. all the Amazon and eBay sites. Gumtree are owned by eBay so if we aggregate this with eBay, we get the following chart.

Consolidated 10 most visited UK shopping sites week ending August 24, 2013
Consolidated 10 most visited UK shopping sites week ending August 24, 2013

More than a third of shopping web site traffic in the UK goes to these two US companies, and are then followed by Argos who have less than 2% of traffic. Perhaps this goes to show the UK is still a nation of small shopkeepers.

3 components for perfect m-commerce


Every day I receive a link to a news article describing how powerful mobile shopping, or m-commerce has become. 98% of mobile commerce revenue is from iPads and there were $240 billion of mobile payments in 2011 – rising to $1trillion in 2015, Amazon have sold $1bn of products in the last 12 months, and eBay sold $5bn of products last year.

However, I think we’re about to see a step change in these revenues, because most m-commerce offerings are simply migrating their web offering to a mobile equivalent – either through app or a web browser. The statistics above are still mightily impressive, however there’s a lot more room to grow.

Amazon’s one click ordering makes it easy to buy a product, and eBay’s feedback rating is a brilliant piece of loyalty marketing – once you’ve won an item via Buy It Now or through an auction, the feedback rating psychologically compels consumers to go through with the purchase without any of eBay’s manual overhead.

Both of these systems are great for impulse buying, but are separated from marketing.

The next version of m-commerce will marry brand marketing and impulse buying. Consider these two scenarios:

  1. A consumer sees a poster advert in a train station promoting a new film. The consumer will soon be able to connect their smartphone to the poster – whether through the camera, wireless or another communication channel, and order tickets to the film at their preferred cinema.
  2. A consumer sees a poster advert of a perfume. They connect their smart phone to the poster, enter a quick and fast security check, and that perfume is then ordered and delivered to the consumer.

These scenarios require a number of barriers to be broken down before the purchase process can be made quickly and easily. Consumers won’t have the time or inclination to enter 4 pieces of information from their credit card for each purpose – it needs to be simplified. A current example of this is PayPal’s mobile app which has been simplified recently to remove long passwords and replace them with a 4 digit PIN number.

In order for this new world to occur, three things need to happen:

  1. The technology needs to be in place. As pointed out, with PayPal and existing smartphones, I think this is already in place.
  2. Marketing agencies need to help design the buying process. The agencies will need to help the commerce store with the actual purchase rather than a brand awareness exercise – and this will be difficult to achieve. It will be a huge educational process and mindset change for marketing and design agencies.
    I don’t think this can be achieved with QR codes because they are still clunky; require their own app and a decent Internet connection. Most consumers still don’t understand what a QR code is. QR codes also fragment the buying process, sending consumers off to websites rather than enabling a one-click, under 20 second buying process.
  3. The single fulfilment store.  One key player that has the infrastructure to do this is Apple. Imagine if they rebranded the App Store as simply ‘The Store’. A consumer sees the perfume poster above, links their iPhone to the poster, and orders through ‘The Store’. Apple already has the payment information and owner’s address – in the App Store. They also have the cash to setup the distribution infrastructure.
    Other contenders to be able to do this are Amazon and possibly Google. Or we could see a new player/ brand emerge, who won’t need to worry about the legacy of ‘old’ e-commerce systems and behaviours. Tesco have tried a system in Korea, however I think it was more of a marketing stunt or a proof of concept. And when I mention legacy systems, the future of m-commerce described above will be single, impulsive purchases, probably linked to brands, unlike the Tesco video which is a small step forward from shopping online.

Once these three component are in place, consumers will consider this as standard shopping behaviour. The holy grail of marketing will have been achieved – Marketing will have become directly linked to the purchase.

Photo courtesy of Eric on Flickr.


Amazon removing more cost centres


It’s quite rare in most industries for a market innovator to become the strongest company in the sector. Usually the market creator is overtaken by a more efficient competitor, who has more time to see what not to do. This has been the case with most industries, not just IT.

One of the first ecommerce web sites I remember using was Amazon. It reduced the cost of books by a huge factor and its recommendation engine is still seen as one of the best in any website. The fact that it launched in 1994 and is still one of the most profitable companies in the World is impressive.

In terms of financial scale, for UK readers, Tesco has a market capitalisation of £31bn and Amazon has a market capitalisation of $89bn. For US readers, Target has a market capitalisation of $35bn.

Turning costs into profits

One of the business initiatives that most people admire Amazon for is how they turn their costly IT organisation from a cost-centre to a profit centre – called AWS (Amazon Web Services). Essentially, running Amazon.com and all the international sites requires a massive amount of servers in data centres all around the world. When I visited one of our US data centres a few years ago we had an area (called a cage, because it is one) and our next door neighbour was a cage several times larger for Amazon.

Anyway, Amazon realised it had a huge IT infrastructure and converted the spare capacity into a facility enabling anyone else to use their infrastructure. Companies can rent this capacity on an hourly charge. And many companies do use it.

Amazon won’t release revenue figures directly, however some reports have estimated its more than $500m annually.


Another innovation that Amazon had to implement, this time by force was their Marketplace. eBay started taking some revenue away from Amazon, so Amazon started allowing third party sellers to sell products on Amazon.com. Fast forward to the present time, and it’s quite often that a consumer will buy something on Amazon, which is actually another merchant – whether it’s a sole proprietor or a multi-national organisation.

If a consumer currently buys something from Amazon, if it’s actually Amazon who sell the product, it will come from an Amazon warehouse and be delivered directly. If it’s a third party seller, Amazon have a clever interface (and contractual terms) which notify the seller to deliver the goods within a set time period.

Removing more cost centres

However the latest area that Amazon is moving into is fulfilment.

Amazon is encouraging merchants who use its platform to send their stock directly to Amazon’s warehouse and Amazon will take care of the rest. They’ll fulfil (pick and package) the order and deliver it to the customer. So if you sold glass vases, you would instruct your supplier to deliver a pallet of vases to an Amazon warehouse and spend all your time and energy making the Amazon pages look as good as possible.

This is ingenious for a number of reasons:

  1. It turns Amazon from a traditional retailer who needs to buy a certain commitment of goods for x and sell at x + y% markup – into a risk free business because it doesn’t need to buy the goods up front
  2. To compete against this model becomes ever more expensive, because the sheer capital infrastructure costs are now prohibitive
  3. Amazon will increase its economy of scale for delivery costs
  4. It encourages merchants to use Amazon as the primary channel, because Amazon performing merchant’s fulfilment requires less overheads and easier.

The fulfilment model is an interesting concept, because it turns retail and distribution into a service and it moves a lot of the risk (of buying the items up front) up the supply chain from the retailer (Amazon) to the distributor.


Learning from eBay timing


Several few years ago I got really involved selling stuff on eBay, became a PowerSeller for a few months and turned over a nice revenue, until the choice was to give up my main job and go into eBay full time. I decided to concentrate more on my main job, and well, the rest is recent history.

One of the things I learnt from eBay was that when it comes to auctions, timing is 90% of the story.

There was little point creating an auction that would finish at say, 11am on a Monday morning. The end of the auction was when there would be the highest number of bids, and Monday morning was a poor time for attracting traffic to the bid.

I used to list items on the weekend, and pay a few pence extra for a ‘Scheduled start‘. After some trial and [lots of] error I would schedule for items to finish at around 5.30 or 6pm on Tuesdays and Thursdays. On items to do with the home, I would schedule for auctions to finish on a Sunday evening.

I’ve noticed that timing is once again really important when it comes to Twitter, Facebook and LinkedIn statuses. Actually, the same is true of any status update. If someone (or a brand) continually updates a status, any previous status falls down from prominence very quickly. End users will probably be following tens, hundreds or sometimes thousands of other users/brands, so the timing between status updates is absolutely key.

I now find I’m using the same practices for writing blog articles and Twitter updates.

I write almost all the week’s blog posts on a Sunday morning, and delay them being made public – trying to stagger them over the week. Also, I try to choose a decent time when they are made public (which then posts to my Twitter page, Facebook, LinkedIn, etc.). If I made them all public in one go, especially on a Sunday, only the most recent one would get any traffic.

Posterous has an excellent scheduler for blog posts. For my Twitter feed, I use either Timely, which has been written specifically to address the timing issue above, or sometimes TweetDeck. Timely is OK, but provides pretty random scheduling (you can’t provide a time – the system does it for you). I find TweetDeck is one those applications that tries to be all things to all people, and ends up being unusable to all of them as well, so in practice I tend to use Timely more often.

Photo courtesy of LenP17 on Flickr.

157 impressive mobile stats

I have an issue with people throwing mobile statistics into presentations because they are usually unfounded and questionable.

However this presentation contains references to all the statistics, which adds a high degree of credibility.