Yesterday, July 21, 2016, after the market closed, eBay announced its Q2 2016 results. eBay exceeded Wall Street expectations and raised Q3/16 guidance. From a seller’s perspective, the results were largely positive and show on the 1-year anniversary of eBay’s ‘split’ from PayPal, that the new strategy put in place is starting to bear some fruit, or ‘green shoots’ as the Wall Street analysts like to say.
Before jumping into our analysis, here’s our dashboard of key metrics we monitor:
eBay Q2 Highlights:
eBay saw improvements in these areas:
- Note ChannelAdvisor’s SSS for Q2 was 2%
- eBay’s US GMV accelerated to 5% from 3% last quarter (this includes Stubhub – without Stubhub, core MP growth would be ~4.5%)
- International GMV accelerated to 6%, driven by Stubhub
- Total GMV accelerated 4% up from 3% last Q
On the call, eBay’s management team gave credit to the ‘green shoots’ they are seeing in mobile, c2c and SEO to the Structured Data Initiative (SDI).
Structured Data Initiative
eBay spent a LOT of time on the call updating their Structured Data Initiative. Here are the highlights:
- Most importantly, SDI is generating higher conversion rates – 10% higher for new product pages compared to old view item pages
- SDI now covers 42% of listings and there are 15m browse/product pages (this could go as high as 100m)
- eBay added 3m product reviews in Q2
eBay’s CEO ‘Sharpens’ the eBay Brand Message: “Find Your Perfect on eBay”
To me, the most interesting and longer-term news out of the release was Devin Wenig’s statements about where they are taking the eBay brand. Over the last year, there have been some mixed messages around what the eBay brand stands for. In the call yesterday, Devin introduced this new “Find your Perfect” messaging (from the transcript):
One is, we’re clear about our brand. We’re clear about what the eBay brand stands for and how it’s different and how that manifests itself to consumers. This idea of everybody can find their version of perfect is distinct to eBay, and I want every consumer in the world to understand that eventually and that’s our job. I said two quarters ago, we have to sharpen our brand and now we’re clear about what it is.
Second, we do like the trajectory we’re on with these user experiences. We believe that if we bring more people to eBay they’ll like what they see. And third, in the second quarter, we began to do some consideration testing. We did a test in the UK, we did a test in the U.S. A little bit of brand spend, a little bit of top of funnel, that was a little outdoor, a little television and the results were positive. We saw traffic and new user acceleration. Based on those three things, we’re going to reallocate marketing spend. Don’t expect us to do a huge overlay. Certainly not at this point. We’re going to take spend from mid and bottom funnel, reallocate it to brand and top of the funnel, and in our major markets, you should begin to see that show up through the second-half, particularly once the summer is over, you should begin to feel the sharpened eBay brand in our major markets.
Reading between the lines here, it sounds like eBay is lining up to do a holiday promotion in Q3/Q4 (“once the summer is over”) around this ‘Find your Perfect’ messaging.
eBay has been using this within the fashion vertical for a while. For example, here’s an eBay Fashion video showing that ‘vibe’:
“I’m an eBay seller, what should I do?”
Clearly, SDI continues to be a top priority for eBay and sellers should support 100% of their listings having the right SDI data as a top priority. If you haven’t, that will be the number one thing you can focus on between now and Holiday ’16.
Q2 2016 was the first time we’ve seen signs of accelerating growth at eBay in a long time. Our fingers are crossed that we see this continue into Q3, which could set up eBay nicely for a strong holiday season.
This blog post was written by Scot Wingo, ChannelAdvisor co-founder and executive chairman