Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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More than 724,000 retailers use eBay as an exclusive, primary or secondary sales channel making eBay the “It” place to shop, eBay’s tagline in its current television ad campaign. “There is just no arguing about the eBay phenomenon when it comes to online shopping,” says Geoff Wissman, vice president with consultants Retail Forward. “It has driven so many changes in the way other online retailers approach the channel.”
Wissman specifically points to Amazon.com’s attempts to reinvent itself by becoming more of a marketplace, rather than just a seller of books. “EBay has become a place people think of when shopping for a specific item, because they are likely to find a retailer selling it,” adds Wissman.
With a 168 million registered users, more than 50,000 categories and more than 900 million items listed, it is easy to see why retailers of all sizes have flocked to the site to hawk their goods. Since adding eBay stores in 2001, the site has attracted 336,000 store fronts. In addition, fixed price sales accounted for 32% of total sales during the third quarter of 2005.
Still, the backbone of eBay’s success are the mom & pop retailers with fewer than five employees, which account for the majority of sellers on the site. It is these sellers who benefit the most from eBay’s content pages, which include guides on buying vintage clothing, cosmetics, and Star Wars memorabilia, the type of items they are likely to be selling. It is this kind of dedication to connecting buyers with sellers that enable small online retailers to compete with the big boys.
“When we launched, conventional wisdom was that big retailers would dominate online retailing,” says an eBay spokesperson. “That hasn’t been the case, because the Internet provides tremendous leveling in the retail environment that allows the little guys to compete.”
Which is what makes eBay the “It” place to shop.
Since its launch in 1994, JCPenney.com has played an increasingly larger role in generating sales for the middle market retailer. Internet sales increased 35% in the first half of this year, far outstripping the 3.5% growth in comparable department store sales. And online sales accounted for about 34% of total direct sales in the second quarter, up from 27% a year earlier.
That’s not surprising for a site loaded with features to make online shopping easy. “The home page presents a clean design with clear product categories and features that make it easier for shoppers to locate and browse for items,” says Manivone Phommahaxay, consultant for user experience at Molecular Inc. For example, shoppers can look for items using tabs, site search or item number.
The landing pages offer further means of narrowing a search. “The category landing pages provide additional filtered views-shop by brand, shop by special sizes-to allow shoppers to quickly zero in on specific items that match their criteria,” Phommahaxay says. “On many product pages, multiple product images, color swatches, and alternate or larger views are available.”
JCPenney.com also makes good use of cross-selling, listing relevant related items on the product page, Phommahaxay says. For example, on the page for a bedroom set, the site pitched a bookshelf table lamp and a pair of tealight holder sconces.
The site clearly posts on the product page notices about shipping and additional charges, with links to more detailed information. And the user remains on the product page after an item is added to the shopping cart, encouraging the user to continue shopping, she says. Catalog shoppers also will find something to like on JCPenney.com-a shop-able online catalog. Shoppers can flip through the pages by dragging cursors across the page or by clicking “back” or “next” buttons on the page.
Those uncomfortable with using the online version can fill out a form on the same page to have a paper catalog mailed to them. Shoppers can also print out online ad circulars of items on sale in J.C. Penney stores in their area. In addition to shopping, visitors to the site can also check their account information, track orders and view past purchases.
It’s great to be among the top three online retailers and do more than $3 billion in yearly web sales, but continuing to find new ways to please customers is a formidable challenge. “It’s about focusing on the basics and a ruthless commitment to exceeding the expectations of customers,” says Noah Maffitt, director of e-commerce strategy and customer experience at Office Depot Inc.
Office Depot continues to take steps to maintain its success online. In the past year, it has implemented web analytics from Coremetrics Inc., for instance, to get a better look at how customers use OfficeDepot.com, and it deployed site search and navigation technology from Endeca Technologies Inc. to provide more productive and personalized shopping experiences. “We continue finding ways to provide an experience that improves customers’ perception of Office Depot,” Maffitt says.
One of Office Depot’s challenges is serving the product and information needs of the corporate buyer as well as of the small business owner and general consumer. To build customer relationships and generate traffic, it presents online seminars on business topics unrelated to its products, such as compliance with the federal Sarbanes-Oxley law on maintaining business records; it offers an online space-planning design tool for office managers looking to buy equipment and furniture; and it’s working with Hewlett-Packard Co. to provide a rich-media showcase of computer products that appeal to all shoppers.
Office Depot has also improved customer service and fulfillment across selling channels. It recently launched a system that automatically alerts customers through e-mail or phone messages whenever delivery will be later than expected, and it has integrated its store and web site distribution centers, providing for more efficient deliveries.