It's been four months since online auction site Ebay launched a dedicated Fashion Gallery for Australian retailers. Here, Daniela Aroche takes a look at how the fledgling platform is faring.
58,000,000, 32,000,000, 942,000, 158, 13. Unexplained, these figures appear random, but decoded they define the eBay business as one of the greatest online shopping portals created to date. From October 2011, 58,000,000 is the number of times eBay Inc’s apps were downloaded across the globe; 32,000,000 is number of times eBay’s core iPhone app has been downloaded; and 942,000 represents the number of new listings added via eBay mobile per week. 158 is the average number of US dollars spent every second through mobile purchases.
13 relates solely to eBay’s fashion sector and represents the number of pieces of clothing, pairs of shoes or accessories which are sold every minute through eBay’s mobile apps. And, while it may be the smallest number in the bunch, fashion is eBay’s most popular category as purchased through eBay mobile apps by Australians, with 42,000 items sold each day, and an average of 730,000 live listings daily.
Despite the category’s success, eBay gave the market a slight surprise when it decided to launch a dedicated Fashion Gallery in October last year, but according to eBay Australia & New Zealand director Hamish Moline it was the natural next step for the shopping giant.
“When we researched our buyers, we found that there were a huge amount of searches on eBay in fashion related to brands – people looking for specific Australian and international brands in their search – rather than just a generic search. So we saw that as an opportunity for both retailers and consumers,” he said. “Fashion retail in Australia currently accounts for $20.4 billion, with $1.4 billion coming from online sales. By 2015, however, the fashion retail sector is expected to more than double to $3.4 billion, growing four times as fast as in-store fashion retail*. Over 6.4 million shoppers come to eBay each month, so retailers are able to tap into our strong, existing customer base. Consequently, eBay’s Fashion Gallery provides retailers and brands with an avenue to capitalise on the growth of online shopping.”
To date, eBay’s Fashion Gallery has signed partnerships with over 33 well-known Australian and international brands, including including Alannah Hill, Marcs, Mimco and Witchery. UK fashion retailer House of Fraser is also on board, selling high-end brands such as DKNY and Pied a Terre, along with US department store giant Macy’s, which offers a range of designer labels including Michael Kors and Rachel Roy.
These strategic partnerships allow consumers to use the Gallery to buy direct from associated labels, and while approximately 80 per cent of the stock sold via eBay Fashion Gallery is new, end of season items are also thrown into the mix, giving retailers an extra opportunity to clear unwanted stock.
It’s a new initiative, for both eBay and fashion retailers, but the experiment seems to be working. Although eBay is reluctant to reveal specifics, Moline confirmed that the Gallery alone has been growing 10 to 30 per cent a week in terms of sales. The Christmas buying period also saw the eBay Fashion Gallery reach milestone figures in terms of site traffic, with a top of 1.6 million unique visitors on December 11.
“December 11 saw our highest visitor figure since launch, but there is a consistent increase in traffic of five per cent to the eBay Fashion Gallery each week,” Moline revealed. “As our selection has grown, we’ve also seen a higher conversion rate of these browsers. So initially, a lot of people were interested and came and had a look at the site, but may or may not have bought something. But as we’ve built our selection, along with some of the offers and promotions, we’re really seeing more people buying more each time they come.”
Interestingly though, many of 200-plus brands in league with eBay Fashion Gallery also have their own dedicated e-commerce sites. However Moline is adamant that despite this, none of the labels have reported cannibalisation. In fact, it’s the complete opposite.
“A lot of these brands do have their own online sites, but absolutely none of them have come to us since launch saying that it’s cannibalising their stand-alone online businesses,” he said.
“In fact, we are finding that some of them are telling us that it’s indicating to more people that they are actually online and, as a result, some of their own sites are actually growing at the same time – so they haven’t seen it as a negative at all.”
Supre, which signed onto eBay’s Fashion Gallery in October last year, is one such fashion retailer. Despite having its own e-commerce store and an e-boutique via Westfield, Supre international brand manager Catherine Taouk said the decision to join eBay’s Fashion Gallery has actually assisted the business in capturing a new market which was previously untouched.
“For Supre, the partnership with eBay is seen as an extension of what we currently do with our online/e-commerce sites. It’s about tapping into other online channels to sell more product, and the opportunity with eBay - to sell to millions of people around the world and ship globally - is very attractive,” she said.
“We already have a good, strong online store, but we wanted to be able to tap into a larger market and eBay was launching the Fashion Gallery, so it was perfect timing. Also, the fact that eBay is such a well-known, global brand and people trust it, means that people understand how the site works, and that really matters, especially when people are buying online.”
However, Taouk admits that it hasn’t all been smooth sailing. Taking on the eBay commitment has meant that Supre now has to straddle three online stores - making IT integration and logistics a formidable challenge.
“We integrated the Supre site with our stock platform when we joined the Westfield online store in 2010, and at the time that was a challenge, but eBay has been a much larger challenge - and probably because it is such a unique platform,” she said.
“We are definitely one of the highest volume retailers on the eBay platform, but it’s like combining oil and water sometimes - some things just don’t sink in together. So the biggest learning for us has been not to just expect that the integration is going to be as seamless and as quick as we’d like. We all had expectations that we were going to launch a month before we did, but it took time for things to be ironed out.”
Gianna Parker, who switched her boutique Alibi to an online-only operation a year ago, said integration is likely to be the most common problem for retailers signing onto eBay Fashion Gallery.
“We had been running an eBay store version of our online store for quite some time and thought that the Fashion Gallery was an interesting concept, so we signed on. But, as with anything involving IT and e-commerce, the challenge is to integrate your branding and web presence into the eBay environment,” she said.
“Attention to detail, maintaining control of inventory across multiple web stores and avoiding selling product that you don’t have in stock is a fundamental issue that a well-integrated, multi-channel e-commerce solution must address.”
Of course, eBay does offer additional services to assist with some of the initial set-up struggles, but these come at a cost, Moline reveals.
“We have a standard cost for those in the eBay Fashion Gallery, but there are additional costs involved for any of our additional services, such as different platforms and warehousing and logistics,” he said.
However, with no direct competitors, eBay is in a perfect position to bargain, and in a great spot to expand. “In terms of main competitors, there’s no-one like eBay. However, the people that we watch very carefully are businesses like Amazon and Google’s product search. We don’t feel like we compete with any of the retailers either; rather, we are an additional channel for them, and we are actually facilitating a lot of them,” Moline said.
“I think immediately, our short-term goal is to fill out our selection further and find the right balance between our new in season and sale/promotional stock. Then, once we build the traffic more and have cemented the fashion gallery as a first-rate destination, we’ll expand into other categories. We’re looking at a kid’s site and we are also ramping up menswear, with a few more labels in the pipeline by March. We’d also like to triple the number of retailers in the Fashion Gallery this year, as a minimum.”
Daniela Aroche