JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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Pricing is another potential use of the data. If a retailer has a product whose sales have slipped, checking for similar products in eBay transactional data might reveal the market-clearing price has dropped $50 below the retailer’s price. That could indicate it’s time for a decision to prevent further loss: return the items to the vendor or cut the price to be competitive. “Conversely, if I have hot inventory that is moving well on eBay because it is in demand, I could even potentially increase my prices,” Wiley says. Similarly, marketplace behavior at eBay stores can signal it’s time to change channels. As pricing and volume at the stores start to dip, he notes, it may be time to clear the item through auctions or other channels before it becomes a pennies-on-the-dollar liquidation sale.
EBay’s roots are in p2p auctions, and the larger share of eBay sellers-about 1.5 million in the U.S. vs. an estimated 724,000 professional sellers-still use eBay to supplement income rather than support a business. But eBay’s organization of its transactional data into a business tool reflects the fact that the larger share of transaction volume is now from professional sellers and retailers. “The bulk of eBay’s sales volume is really coming from businesses and genuine Internet retailers,” Wiley says. “That’s the population we built this for.”