Why Does eBay's Strategy Result in Fewer Buyers? - EcommerceBytes

Summary

Is eBay's focus on high value buyers paying off? In a report today about Wednesday's 2nd-quarter earnings release, Wall Street analyst John Blackledge of Cowen said he expects another decline in the number of eBay's active buyers as it "continues to focus on high value buyers."

Is eBay's focus on high value buyers paying off? In a report today about Wednesday's 2nd-quarter earnings release, Wall Street analyst John Blackledge of Cowen said he expects another decline in the number of eBay's active buyers as it "continues to focus on high value buyers."

But it begs the question, why would focusing on high value buyers turn other buyers away? Since it isn't the seller, eBay isn't facing any capacity issues, and it has millions of sellers who could continue to sell to the traditional eBay ("low value"?) customer.

Last year, eBay CEO Jamie Iannone told Wall Street analyst he was rejecting the approach his predecessor took in 2019, "which was really just about the number of active buyers, even low value buyers or one-and-done buyers. I've got the whole organization pivoted to focusing on those high value buyers; buyers that are buying over $800, buying six times a year, or buyers who sell."

EcommerceBytes readers reacted to news of Iannone's approach in this blog post from a year ago. One seller wrote, "Is eBay telling me that they do not want my 7K I sent them last year selling to people who on average spend $20-$30 per transaction. They are my bread and butter not the occasional $200-$800 sale."

Meanwhile Etsy CEO Josh Silverman and Chief Financial Officer Rachel Glaser have a different approach to buyers and are focused on retaining existing buyers, getting new buyers, and reactivating buyers. In its earnings report last week, Etsy shared slides showing the total number of active buyers along with repeat buyers and habitual buyers - a more granular approach (and less offensive to buyers).

Etsy reported active buyers had decreased both year-over-year and sequentially, but noted the number had grown 106% in Q2 compared to the second quarter of 2019.

We'll be looking out for eBay's CEO and Chief Financial Officer's discussion of buyers and what they're doing to retain and attract them on Wednesday's earnings' call.

Sellers, let us know how it's impacting you.

Why Does eBay's Strategy Result in Fewer Buyers? - EcommerceBytes
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