eBay Touts AI & C2C Pivot At Morgan Stanley Technology, Media & Telecom Conference
CEO Jamie Iannone and CFO Steve Priest put in an appearance at yesterday's Morgan Stanley Technology, Media & Telecom Conference, answering analyst's questions about AI, focus category C2C pivot and more!
Many of the questions and answers echoed last week's Q4 earnings call, with a little more detail and color added in.
Focus Category C2C Pivot
Priest is still attempting to spin the newfound focus on expanding C2C success in Germany to other markets as something that is just the next logical step in the focus vertical strategy that eBay has planned all along.
Jamie just talked about some of the momentum we're seeing in focus categories. We've invested. We've created that investment, and we've managed to sort of change the paradigm as it pertains to the focus categories.
The other thing I would say is that we've lent into certain markets. So, think about Germany, for example. We took the focus category playbook and we applied it to a specific market.
Think about Germany. We did a lot of work on sort of local language capability. We looked at the sort of taking friction out for sort of sellers making easier return policies for our consumers and also looked at a local proposition for the German consumer. Again, by leaning into Germany, we saw significant changes to the trajectory of our German C2C business, which has continued to bear fruit.
However, the actual history of the strategy eBay has pursued the last 3+ years tells a very different story.
Liz Morton
When Iannone took the helm in 2020, his initial "tech-led reimagination" strategy specifically called out the need to capitalize on eBay's robust C2C platform, seeing consumer to consumer selling as the foundation of the company's success.
"I am honored to rejoin eBay as its next Chief Executive Officer," said Mr. Iannone. "In my previous experience with the Company, I developed a deep appreciation for what makes eBay so special.
eBay 's success has always been rooted in its robust C2C platform. I believe the Company has tremendous opportunities to capitalize on this foundation, innovate for the future and grow its ecosystem.
He took those sentiments even further in an interview with CNBC in July 2020, saying getting back to individual consumer selling and becoming the "seller platform of choice" were among his top priorities for the company, along with focusing on key core vertical categories for growth.
So you know since I've been back I think there's lots of areas of opportunity. I'm not satisfied with where we are and I see enormous upside potential in really getting back and focused on the customer experience...
...First building compelling experiences in key verticals that are really core to eBay and also getting back to our consumer selling that's individual selling which is really important to the platform.
Second is being the seller platform of choice,especially around non-new in season. We've got a 500 billion dollar opportunity in the core of what eBay is great at in non-new in season and being the seller platform of choice there is a huge opportunity.
Unfortunately, consumer selling and being the seller platform of choice quickly faded to the background as Iannone has pursued a very narrow focused vertical, "high value, enthusiast buyer" strategy - leaving many of the non-new in season, one of a kind, vintage, antiques and other collectibles C2C sellers that were the "foundational roots of eBay's success" feeling excluded and abandoned.
Jamie and Steve's remarks very carefully thread the needle to advance the narrative that they are simply continuing with their strategy that has been working all along, but reintroducing C2C to the conversation is a significant pivot from previous talking points.
The importance of this shift should not be overlooked, especially with the future of eBay's business strategy leadership still up in the air.
Liz Morton
AI Investments
Predictably, AI was the topic du jour and just as predictably, Jamie really didn't have anything new or exciting to add to the conversation - "just take a picture" Magical AI listing is still "coming soon" and eBay's computer vision technology supposedly creates compelling and engaging buyer experiences.
So, let's say, a woman comes on and finds a beautiful black cocktail dress that has flowers on it and wants to find something just like that, rather than having to describe that, et cetera, she can just use visual search and say, "Find me everything that looks like this item," it's really compelling.
Hopefully this hypothetical dress shopper will have better results than our Manatee-zilla experience.
Sellers have been concerned about the increasing use of AI for customer support since a mysterious extra $12 Million expense was reported in eBay's July 2023 10-Q filing and the Q3 2023 earnings report confirmed that expense was tied to "rolling out conversational help bots."
Those concerns have only grown with mass layoffs announced in January and promotions and title changes among remaining Global Customer Experience staff who are now tasked with "deploying AI to revolutionize CX."
Liz Morton
And eBay appears to be doubling down on this AI-powered customer service "revolution", with no end in sight.
When asked to name things he thinks investors most underappreciate about the eBay story, Jamie didn't hesitate to say he "feel[s] lucky to be CEO of this company right now with the generative AI technologies that are coming to fruition" and that no longer having to pay for human customer service reps to read detailed explanations about business impacting issues from sellers before responding to their requests for help is "fundamentally changing the pace of innovation."
eBay deals with a lot of customer support between buyers and sellers. And that customer agent sometimes had to read like a 12 paragraph e-mail where somebody explained it, we would hire someone to read that.
Now we have AI read that e-mail, write the initial response. So it's fundamentally changing our pace of how we work and the pace of innovation.
Many sellers would likely agree this increasing erosion of support is fundamentally changing things at eBay...but not for the better.
The full transcript of Steve and Jamie's appearance at the Morgan Stanley Technology, Media & Telecom Conference can be found here.
How do you feel about eBay's C2C pivot and increasing use of AI for previously human-powered support and trust and safety tasks? Let us know in the comments below!
