Over the last year, eBay has been trying to slowly move users away from its auctions and more towards purchases of fixed-priced items. Last week, however, eBay announced that it plans to return to its roots and that the company wants to put more emphasis on its auctions business again. Judging from the latest data from Compete, eBay’s former strategy was clearly not working and was actually driving users away from eBay and toward other fixed-price retailers like Amazon and Walmart.
According to Compete, the percentage of eBay shoppers who also shopped at Amazon increased from 41% in February 2008 to 53% in February 2009. At the same time, however, the number of Amazon users who also shopped at eBay remained stable at 58%, which, according to Compete, shows that eBay’s fixed-price strategy did nothing to attract new buyers.
These problems were only compounded during the last year, as eBay also lost a lot of its casual sellers to Craigslist (which saw its traffic rise 40% over the past year).
As Compete’s Matt Pace rightly points out, eBay’s strategy of emphasizing fixed-price transactions only muddled the waters and blurred eBay’s distinction from other online retailers, including eBay’s own shopping.com. Also, users clearly prefer to buy from a trusted source like Amazon, and the average order value on eBay has remained stable at around $28 for the last year.
That doesn’t mean that eBay’s focus on “Buy-It-Now” transactions was a total failure, though. The number of these transactions grew steadily over the last year (up 20% from last year), but this was not enough to make up for the simultaneous decline in eBay’s auction business. According to Compete, 1.5 million fewer users actually placed bids on eBay in February 2009 than a year ago.
