Ebay bets big on bar codes

▶ The on­line mar­ket­place must man­age an enor­mous in­ven­tory ▶ “This in and of it­self doesn’t solve Ebay’s ma­jor prob­lem”

Bloomberg Businessweek (North America) - - Contents - -Spencer Soper Edited by Cristina Lind­blad and Dim­i­tra Kessenides Bloomberg.com

Hop­ing to out­grow its im­age as a glo­ri­fied garage sale and move up in Google searches, Ebay is turn­ing to tech­nol­ogy de­vel­oped 70 years ago: the bar code. The ma­chine-read­able sym­bol that keeps su­per­mar­ket lines mov­ing is help­ing Ebay man­age vast amounts of data as­so­ci­ated with the 6 bil­lion prod­ucts—from smart­phones to video games, hand­bags to tires—listed at the on­line mar­ket­place each year.

Mer­chants will be able to en­ter a full de­scrip­tion of a sales item by us­ing a smart­phone cam­era to scan its Uni­ver­sal Prod­uct Code. Ebay reads the scan and au­to­mat­i­cally lists the item’s spec­i­fi­ca­tions. Be­fore, ev­ery de­tail, in­clud­ing brand, m model, and di­men­sions, was en­tered man­u­ally. UPCS are a cen­tralc part of what Ebay calls its “struc­tured data ini­tia­tive,” start started in June, to or­ga­nize item items into a cat­a­log that shopp shop­pers can eas­ily search

usin us­ing fil­ters such as price, fea­tures, and con­di­tion. The switch started with auto parts and ac­ces­sories, one of Ebay’s fastest-grow­ing cat­e­gories. The UPC is also used to call up con­sumer re­views and prod­uct im­ages, which cre­ate a de­gree of per­ma­nence on Ebay that search en­gines will re­ward with bet­ter place­ment.

Ebay says the code pro­vides a suf­fi­cient base­line of in­for­ma­tion be­cause 80 per­cent of all prod­ucts sold there are new. A key goal is to stan­dard­ize the amount and type of in­for­ma­tion that mer­chants list. The ini­tia­tive will even­tu­ally ex­pand to most items on the site.

Chief Ex­ec­u­tive Of­fi­cer Devin Wenig, who took over at Ebay in July af­ter its split from trans­ac­tions busi­ness Paypal, sees the ef­fort as the so­lu­tion to slug­gish growth and loss of mar­ket share to Ama­zon.com. Ebay has lost al­most one-fifth of its value since the spinoff. In­vestors are skep­ti­cal of the data strat­egy. “This in and of it­self doesn’t solve Ebay’s ma­jor prob­lem,” says Steve We­in­stein, an an­a­lyst at re­search firm ITG. “The ma­jor prob­lem is an­swer­ing, ‘Why should shop­pers go to Ebay in­stead of any­where else?’ I don’t think they have a good an­swer to that.”

Wenig says the fi­nan­cial re­sults in­vestors want will come as more cat­e­gories are in­te­grated into the cat­a­log. Ebay planned to in­crease the share of el­i­gi­ble list­ings man­aged this way to 60 per­cent by the end of Fe­bru­ary, up from 38 per­cent at the end of 2015.

So far, some mer­chants like the change. Quick Ship Elec­tron­ics, which sells con­sumer devices on Ebay, had some desk­top com­put­ers and lap­tops lan­guish­ing in its in­ven­tory. Once the com­pany en­tered the UPCS on Ebay’s cat­a­log, the items sold within days, CEO Jor­dan Ins­ley says.

Scott Brown, owner of on­line cam­era store Ado­rama, says he’s waited for years for Ebay to in­cor­po­rate scannable codes. His com­pany sells about three times as much on Ama­zon as it does on Ebay. “Ebay re­ally wants to get out of the shad­ows of Ama­zon,” he says. “By tak­ing con­trol of their data, they might be able to do it.”

The bot­tom line Ebay is us­ing bar codes to stan­dard­ize prod­uct list­ings in a data cat­a­log in an ef­fort to re­gain busi­ness lost to Ama­zon.

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