Brands, dealers benefit from e-commerce storefronts
Brand perception takes a front-and-center spot at the list of concerns of successful companies. When a brand lands in less-than-positive light, or becomes associated with an unbecoming environment, the public relations issues that ensue can become detrimental.
On the other hand, placing the brand in front of an eager marketplace, or alongside admirable other brands, can bring a boost to product sales.
When it comes to e-commerce, brands face the same challenges. Do I want my brand here? Is this what my brand stands for? Shopatron vice president of client success, Greg Squires, encounters executives from the powersports industry who have to make the decision on where their brands are best suited from an e-commerce perspective.
And when the idea of managing their brand on eBay arises, he still encounters headwinds.
“There are still folks out there who have a dated view of the eBay brand, as kind of a garage sale, if you will, just used goods. Honestly, people who have that opinion haven’t been on eBay in the last five years,” Squires said. “I’ll ask them if they’ve shopped on eBay in the last few years, and their response is no. So then I ask them to take a look at eBay’s new branding, and the data that shows that 70, now closer to 80 percent of products sold on eBay is New/Buy It Now.”
Most recently, Ducati North America launched an eBay store powered by Shopatron. In total, 38 powersports brands partner with more than 1,800 fulfillment partners on the Shopatron network. From January 2011 through December 2012, powersports brands with Shopatron increased same-store sales revenue by 68 percent. Among the other brands using Shopatron’s distributed order management system are Suzuki, Kawasaki, AGV, BRP and Arctic Cat. Several of the brands also use Shopatron’s online marketing services, as well as its marketplace service that sets up and integrates the Shopatron order management solution in eBay stores.
Success with eBay
The idea that eBay is home to more than only used and auction-oriented products can be hard for some to overcome. But with insight about eBay and where it’s headed, most executives in charge of their brand’s e-commerce channels come to understand that it’s a strong home for their brands.
“The thing that really gets brands over the hump is understanding incremental sales,” Squires said. “eBay has done a number of studies with Forrester Research that have found that a significant number of transactions that are placed on eBay, when compared to a retailer’s own website, they find it’s 70-90 percent incremental customers. So if I’m comparing email addresses of those buying on eBay with those buying on my website, there’s very little crossover. It’s a different pool of 120 million buyers shopping there and in large part primarily there.”
Squires has encountered plenty of “standoff-ish” executives who raise both eyebrows when the idea of an eBay store arises. Yet they eventually understand it’s another way for them to control their brand in a positive setting.
“eBay’s a very interesting and strong partner of ours,” Squires said. “It’s a marketplace that’s very different from Amazon, in that they don’t sell to their sellers, and they don’t buy from their sellers. Amazon is a retailer, eBay is not. eBay is a pure marketplace.”
From pricing to how products are displayed, OEMs that opt for eBay stores to sell parts and accessories continue to appreciate the control they have of their brand in front of the aforementioned 120 million potential customers.
“What the first see on eBay is something they don’t like, but then they understand they can own the channel, in the same way that a lot of brands own Amazon, and really leverage it as one of their top customers as an avenue to drive sales,” Squires said. “It allows brands to expand their online footprint and No. 1, grow sales through that expanded footprint; No. 2, portray your brand in a way that you can define and control, much like you do on your own site; and No. 3, have more more control over pricing. It’s a way to combat some of the things on eBay that you don’t like to see. Instead of sitting on the sidelines and wishing in weren’t happening, you can step in and take control.”
Shopatron’s success with eBay stores and online fulfillment in the powersports market has largely been due to the high level of dealer integration.
“The secret sauce of what Shopatron has brought to eBay is something that hasn’t really existed before — working together with the brands’ channel partners to fulfill online orders,” Squires said. “In the same way you can sell on an Arctic Cat-branded site or Ducati-branded site as direct-to-consumer while involving your local stocking retailers as fulfillment partners, why not do that on eBay as well. You’re driving demand for a lot of the same products to a different base of customers. It’s been a nice way for our manufacturer partners to expand the pie of orders that their dealers can participate in.”
Local dealers need to have the product in stock in order to fulfill the order, either via an in-store pickup or shipment.
“That idea itself increases stocking levels of fulfillment dealers, and it gives those dealers more incentive to put more on their shelves so they can participate,” Squires said.
If a customer purchases a jacket from the manufacturer’s eBay store but the local dealership doesn’t have it in stock, it could be shipped from a dealer that has it in stock.
New customer base
Squires notes that the manufacturer websites typically see a different buyer demographic than that of eBay storefronts. eBay buyers trend toward price-sensitive, younger, male and using mobile devices. “Deal hunters,” as Squires says. Buyers shopping on the manufacturer’s site are seeking convenience, figuring the easiest thing to do is buy from the manufacturer’s site.
And did we mention mobile?
“Mobile transactions on eBay are getting to 20-25 percent, so a significant amount of mobile traffic and purchase,” Squires said.
Those customers who are purchasing from the manufacturer’s eBay store are also likely to buy more when they come into the dealership for pickup. Hence, fulfillment dealers typically buy deeper into the P&A catalog since none of Shopatron’s powersports manufacturers ship to customers; all shipments come from dealers.
“Our surveys ask dealers that question specifically,” Squires said. “Our data shows that 50-60 percent of retailers that participate with a brand and fulfill their online orders increase their buy by 10 percent or more for brands that share online sales, online demand with them.
“So the fulfillment dealers are putting more product on shelves, helping the brand sell more in all channels. If you’re putting more product on the shelves, you’re certainly going to have more sell-through at retail. That’s the biggest challenge for a manufacturer — to not just have your dealers stock your top 10 items, but to get a full product line and have a stronger representation of the brand’s products. The local dealer wants customer loyalty as well.”
The key to generating success after opening an eBay storefront, Squire says, is threefold: pricing, inventory and managing the channels. And with that, the idea of eBay as an online garage sale falls by the wayside.