While ecommerce platforms like Amazon have seen a steady increase in sales over the past few years, the same can’t be said for everyone: eBay and Jet.com’s sales are decreasing.
According to MarketPulse, eBay sales in the U.S. went down by 9% in the fourth quarter of 2019, and the number of items sold globally decreased by 4%. eBay’s gross merchandise volume (GMV) also slipped—in 2018, it was $89.8 billion, but in 2019, that number dropped to $85.5 billion.
Walmart’s Jet.com had a similar struggle in 2019, though their numbers are far more dramatic. Site traffic dipped to a record-breaking low in December 2019 with 1.4 million visits—compare that to December 2016 when Jet had 33 million visits. Traffic on Jet was slashed by 82.5% in December 2019 compared to 2018, and according to MarketPulse, the site is “one announcement away from being offline.”
What’s happening? Why are sales on eBay and Jet decreasing?
According to eBay’s interim CEO Scott Schenkel, eBay’s low sales can be attributed to two things: the company’s decision to reduce marketing that isn’t attracting buyers with high lifetime spending and increased internet sales tax.
eBay’s choice to pack its search results with sponsored ads may also have something to do with it, according to MarketPulse. Third-party merchants are having to spend more on fees in order to compete, meanwhile eBay has struggled to capture the traditional retail market like Amazon has as it’s transitioned away from auctions. In its attempts to stay relevant and competitive, eBay has struggled to catch up, even while being second only to Amazon in terms of sales.
Jet’s low sales tell another story. In 2016, Walmart purchased Jet in an attempt to increase its reach to urban and millennial buyers. Jet failed to live up to those expectations, and Walmart has since drastically cut advertising for the site. Jet’s retail, technology, marketing, analytics, and product teams have been integrated into Walmart’s online business instead, Reuters reports.
So what does this mean for merchants?
Is it worth it to sell on online channels outside of Amazon when companies like eBay and Jet are struggling to catch up?
Amazon is a big fish in the ecommerce pond, and while it’s easy to assume the company’s cornered the entire online market—Amazon had a 20.5% sales increase in 2019 and its product sales were up 13.1% from 2018—other online retail platforms are thriving. Walmart is one.
As it’s shifted to become a leader in online grocery delivery, Walmart has seen its yearly online sales numbers increase. As of November 2019, Walmart’s online platform had seen a 41% increase in sales ahead of its expected growth rate for the year. Not only is Walmart seeing sales growth, but it’s easier for third-party merchants to compete there than it is for them to compete on Amazon.
Walmart’s widespread physical presence allows them to use their stores as warehouses and move product to customers quicker and cheaper than they might get them through Amazon. Merchants also pay less fees on Walmart than they do on Amazon. Jet might be on its way out, but Walmart has found ways to be relevant and sellers are finding success using it as part of their omni-channel presence.
Another channel that could be optional for your online sales is Google Shopping. While Amazon has picked up most ecommerce searches, buyers using Google Shopping are taking less time to complete a purchase. Shoppers using Google typically know exactly what they want to purchase. Google operates differently than Amazon, but it’s another platform continuing to compete in 2020.
It’s important to keep in mind that while platforms like Jet seem to be on their way out, eBay is still competing for the time being—it still ranks number three beneath Amazon and Walmart when it comes to online platforms. Time will tell if eBay, like sellers looking to move more product online, can adapt or die.
Want to know more about omni-channel selling and how your brand can compete online? Contact one of our experts at Pattern at (888) 881-7576 or read more on the Pattern blog.