Santa Clara University

rmi_banner-may-2010

Managing the Turnaround Challenge at eBay

by Gina Guglielmi '12

Retail Studies Senior Seminar students had the pleasure of hearing a presentation by Kurt Apen, eBay's senior director of loyalty and Customer Retention Management (CRM). Apen shared the riveting story of how eBay leveraged customer centricity to manage the turnaround of its U.S. Marketplaces business. The two main aspects of the turnaround story were: leveraging customer centricity and innovation to solve existing and new customer problems.

ebayIn eBay's case, becoming more customer-centric meant focusing on key shopping occasions in the auto parts, fashion, and electronics categories. For these specific shopping occasions the company sought to understand how customers' needs differed. For example, eBay found that when shopping for fashion, customers liked to browse, feel inspired, and get ideas. This led to the creation of a more visual browse experience with more editorial content at www.ebay.com/fashion/. Apen stressed the importance of starting with the customer, knowing their needs and wants, and then using this information to enhance their shopping experience.

The second pillar of the turnaround was leveraging innovation to meet emerging customer needs. The company recognized that product lifecycles were shortening in consumer electronics, and as a result, customers now needed an easy way to trade in and trade up to a new device. eBay launched an experience called "Instant Sale" (http://instantsale.ebay.com/), which allows eBay customers to input their device and get an instant cash offer. If the offer is accepted, eBay provides a pre-paid shipping label and deposits the cash in the customer's PayPal account once the item has been received and the condition has been verified. By offering this new option, eBay solves a customer pain point while increasing the available inventory of used devices for sale on eBay. It is a win-win.

Early on, eBay saw the momentum in mobile shopping. Its mobile team created innovative new mobile apps for the overall eBay experience, as well as for specific applications like shopping for fashion and car parts and accessories. For example, shoppers can use the eBay Fashion app to take a picture of a pattern or fabric color and then search eBay's listings for items that match. It is a designer's dream enabled by the use of the smartphone's camera and eBay's large inventory of listings.

Apen ended his story about eBay by asking students: How does a high-growth Internet company overcome initial early success to recreate success? His company had to move from thinking purely from a scale and efficiency model to understanding and meeting the different needs of customers. He stressed the importance of leveraging shopping experiences that meet the specific needs of individual customer segments. Customer-centricity and innovation have been important ingredients in helping eBay to continue to reinvent the way we shop.

 
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