eBay Promotes Sneakers & Pre-Loved Fashion In Hip Hop Valentine Giveaway
eBay is partnering with hip hop station Capital Xtra to bring the hottest kicks and pre-loved fits to the UK just in time for Valentine's Day.
Global Radio
Win A Sneaker Package And £250 To Spend On eBay
Valentine's Day is right around the corner, and the pressure is on to find that perfect, romantic gift. You've also got to start prepping for date night with your freshest looks, whilst still making sure your sneaker game is on point. It's a lot, so we get it.Thankfully, eBay is here to help. We've teamed up with them to help sort you and your significant other out with a fresh sneaker bundle, so you can level up your fit in time to impress on the big day, and have one less gift to worry about for that special person. And don't worry, we'll also be throwing in £250 to help fix you both up with some fire pre-loved fashion from eBay.
Win Fresh Sneakers For You And A Special Friend
Together with eBay, we're ready to kit you and a special friend out with a set of sneakers, as well as a premium sneaker cleaning set and £250 each – making sure you're rocking the hottest kicks and pre-loved fashion in time for Valentine's Day.This competition is running across Capital Dance and Capital XTRA.
Entries close at 23:59 on Wednesday 14 February 2024.18+. UK only. T&Cs apply.
It will be interesting to see if eBay does more to promote pre-loved for Valentine's Day or if they are going to keep it low key this year after 2022's cringe-worthy Cubid ad campaign.
Liz Morton
Expensive marketing campaigns, giveaways and discounts been a huge part of CEO Jamie Iannone's vertical focus, high value buyer strategy with pre-loved fashion and authenticated sneakers being a particular focus for the UK market, but many have wondered - do these efforts bring in a significant enough amount of sales to justify the increasing costs?
The cost of authentication in particular has recently come under scrutiny as eBay announced a mass layoff of ~1,000 employees globally, including at least one of their physical sneaker authentication locations in Las Vegas.
Liz Morton
eBay acquired Sneaker Con's authentication business in 2021,for an undisclosed sum, taking on their US facilities in Nevada and New York as well as operations in the U.K., Canada, Australia and Germany.
They've since added a third US location in New Jersey for in-house luxury handbag and fashion authentication, while authentication programs for watches, jewelry and trading cards are still handled by third party partners.
eBay massively increased their investment in authentication services throughout 2023, disclosing millions of dollars in additional expenses related to authentication every quarter.
Q1 2023: $14 million increase related to the expansion of authentication services compared to 2022.
Q2 2023: $15 million increase related to the expansion of authentication services compared to 2022.
Q3 2023: $9 million increase related to the expansion of authentication services compared to 2022 for the quarter.
That comes to a total of a $38 Million increase in authentication service costs just for the first 9 months of 2023, and we have not yet seen Q4/full year reports.
Despite pouring money into expanding authentication, eBay has struggled to gain traction with newly introduced categories like streetwear and to keep the momentum going with sneakers, while trying to find ways to monetize the service to cover some of the ever increasing costs.
Sneaker sales slowed when eBay ended fee free selling, with fees currently sitting at ~8% for sneakers over $150 and 13.25% if they are under $150, and buyers are increasingly unhappy with the program since eBay instituted a mandatory shipping fee for all shoes sent to the authenticator.
In August 2023, eBay started looking for a new Global GM for Sneakers and Streetwear, possibly signaling a desire for change in direction for this crucial category.
Liz Morton
The job remained open even after previous sneakers GM Garry Thaniel announced he had moved to GM eBay Canada, leaving eBay's flagship focus vertical without strong leadership or strategy until very recently with the promotion of Director Global Strategy and Operations Jonathan Gunawan to General Manager Global Sneakers in February 2024.
In addition to Sneaker Con, eBay made another big acquisition as part of Iannone's strategy when they purchased collectible card game marketplace TCGPlayer in October 2022 for $295 Million.
Liz Morton
The acquisition has subsequently mired eBay in a protracted, expensive and bad-pr inducing labor battle as authentication workers at TCGPlayer fought for and won their bid to become the first US union in eBay history.
When Iannone first embarked on his grand plan to bring authentication in-house at eBay, very little attention was given to the significant change in strategy it represented or the risks this strategy could pose to the company (and investors).
As savvy scrutineer, unsuckEBAY, noted at the time, it was a "significant step-change" for the company as it departed from the asset light, "just a venue" model that had previously protected it from unionization efforts which have targeted competitors like Amazon.
TCGPlayer employees had previously attempted to unionize in 2020, with concerns and demands about working conditions, pay, and management transparency similar to those cited in their ultimately successful organizing actions in 2023.
eBay should have been able to anticipate and prepare for the possibility of facing unionization efforts following the acquisition, given that the agreement allowed Founder Chedy Hampson and other management personnel to remain in an environment with a documented history of "strained" labor relations.
Interestingly, eBay chose not to reveal the potential risks that unionization efforts could bring to investors until February 23, 2023 in a 10-K filing with the SEC.
eBay's apparent due diligence and disclosure failures in the TCGPlayer acquisition raised questions and concerns among investors, which were amplified even further when Chief Accounting Officer Brian Doerger abruptly exited the company in March 2023.
Liz Morton
In his memo to employees about the layoffs, Iannone took very little responsibility for the situation eBay currently finds itself in, while expressing that he remains steadfastly committed to the strategy he says is working.
We are on a path to building a stronger eBay for the future — one that is growing, and resilient in the face of any challenge. Over the past three years, we made fundamental changes in our experiences across categories and accelerated the pace of innovation at eBay. In areas where we’re investing, we are seeing consistent increases in customer satisfaction and a meaningful improvement in our growth relative to the market.
Our strategy is the right one, but there is more we can do to ensure our success. We need to better organize our teams for speed — allowing us to be more nimble, bring like-work together, and help us make decisions more quickly. Today, I am sharing news about changes we are implementing to better position eBay for long-term, sustainable growth.
The most significant and toughest of these decisions is to reduce our current workforce by approximately 1,000 roles or an estimated 9% of full-time employees. Additionally, we plan to scale back the number of contracts we have within our alternate workforce over the coming months. These are not actions we take lightly — and we recognize the impact they will have on all eBayers. We have to say goodbye to people who have made so many important contributions to the eBay community and culture, and this isn’t easy.
The Need for Change
Despite facing external pressures, like the challenging macroeconomic environment, we know we can be better with the factors we control. While we are making progress against our strategy, our overall headcount and expenses have outpaced the growth of our business. To address this, we're implementing organizational changes that align and consolidate certain teams to improve the end-to-end experience, and better meet the needs of our customers around the world.
Given Jamie's commitment to stay the course, it's important to understand the role that labor-centric warehouse and authentication operations play in his strategy, as well as the massive amount of money eBay is burning on marketing, promotions, and discounts to try to prop up the idea the strategy is really working.
Iannone told Fortune last year that as part of his strategy, he had discontinued legacy discounting tactics he said were "unhealthy."
You became CEO at a time when eBay was running low on steam. What did you see initially as problems to solve?
Our first vector shift was to become more focused on not-in-season items. The company had been focused on new, in-season merchandise and was doing unhealthy things like buying traffic.
Back in 2018, then-CEO Devin Wenig's leaned heavily on sitewide eBay-funded discounts, with many "flash sales" of 15-20% off through the year.
Those promotions proved to be a double edged sword - once buyers get used to receiving discounts, they'll often wait for a sale before making a purchase, creating "one and done" or only occasional buying patterns.
Wenig's strategy was considered such a failure that Iannone felt the need to explicitly distance himself from it when speaking to investors in Q2 2021.
We've discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term...
..This is something that I laid out last July when we talked about the tech-led reimagination as being focused on turning buyers into lifelong enthusiasts on the platform and moving away from the tactics that we had in 2019 what was really just about the number of active buyers even low value buyers or one and done buyers.
However, despite his criticism of those past tactics, Jamie hasn't actually abandoned them.
eBay continues to offer regular discounts to goose the numbers in select "vertical focus" categories like sneakers, watches, handbags, trading cards, jewelry, certified refurbished, and parts and accessories.
Liz Morton ~ Founder
Wall Street showed signs of growing weary of disappointing results with some pointed questions about the vertical focus strategy and discounts asked on the Q3 2023 earnings call.
Liz Morton
Deepak Mathivanan from Wolfe Research asked about marketing efforts and discounting, specifically calling out recent initiatives from Etsy as a comparison.
Jamie, given that consumers are increasingly looking at deal shopping during this holiday season due to macro pressures and inflationary environment, some of the other e-commerce platforms like Etsy are kind of incentivizing sellers to step up discounts and are also doing promos on their own to drive volume.
Is that something that eBay can do? Do your buyers react to this? And do you see opportunities to maybe mitigate some of these macro pressures with product initiatives if this kind of persists for a while next year?
Jamie made it clear that sellers outside the focus verticals will largely be on their own for holiday promotion, a point that has been an increasing sore spot with non-vertical sellers over the last few years.
Yeah Deepak, the only real couponing and promotion stuff we do, we do it in conjunction with our sellers, where they are kind of funding those coupons. And that does work, and that's in partnership with our sellers. We sometimes also do that with our external promotional listings products that we've been talking about, one of our new ad products.
But we really moved away from the couponing that was unhealthy that we did back in 2019. And we have no plans to reintroduce that type of couponing because it wasn't driving the type of ROI that we wanted...
...So our play on value is really the new strategy of what we're going after of driving those businesses, and that's what's resonating with our customers.
It's interesting that Jamie gave himself some wiggle room on sellers "kind of funding those coupons" - while eBay may not be directly funding some discounts, I've long suspected many of these supposedly seller-funded promotions may at least be partially subsidized with credits or other incentives similar to the eBay Daily Deals program.
Subsidies are also a big part of how eBay has been able to offer exclusive sneaker drops at retail prices for their Top Star buyer loyalty program.
Liz Morton
It will be interesting to see if Iannone faces additional cost (and discount) cutting pressure when eBay reports Q4 2023 and full year results on February 27.
