eBay’s Deal of the Day – details on size and scope…plus a groupon goods update.

May 4, 2012

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

At ChannelAdvisor, we often get asked by both sellers and Wall St. analysts about the size and scope of eBay’s Daily Deal program.  While we power a considerable portion of this, we simply haven’t had time to do much research on the scale of the program.

A company in Germany called chartixx, is out with a report that details the size and scale of the program in a 2011 year-end-review.  You can read the complete report here.

Here’s a summary of the program we compiled from their data that has been USA-ified:

Ebay_daily_deals

A couple of highlights:

  • The total program is $168m which makes it in many ways very substantial, but also very small as an overall % of eBay’s $60b/yr GMV business
  • The US leads with a $89m/yr pace
  • The ASP is higher than I would have thought at $73 – must be all those TVs!
  • The average deal in the US sells 367 items/dal, UK is less and DE is much deeper going to 688

The last datapoint is significant.  We’ve been helping large retailers at ChannelAdvisor sell on eBay for over 11 years now and eBay has always had a ‘depth’ problem.  Retailers to have these spot opportunities frequently where they are deep on something and want to move a lot of quantity.  Back in those days we could do a couple a hundred a day, but now with eBay’s DoD program, we can hit the thousands.

So I’d say the program is largely a success when you think of it as giving eBay one more arrow in the quiver to help large merchants scale and has definitely gotten them over the hump of the “mile wide, inch deep” challenge.

While we’re in deal-of-the-day mode, I thought it would be a good time for a groupon goods update.

Groupon Goods Update…

Longtime readers will recall that I have been keenly interested in Groupons move into the physical goods (vs. local services) space because of their massive audience PLUS it’s always interesting when a new marketplace is born with a totally different focus than what we are used to.

If you want a refresher on Groupon Goods (GG for short):

  • Here’s the post where we introduced GG
  • Here’s where we tracked the first week’s success
  • Here’s a Q1 2012 update.

So what’s new with GG? Well, a ton.   Here’s an updated screen shot and you can check out your personalized results here (http://www.groupon.com/goods).

The program is still running and scaling up:

  • There are 1t least 15 deals every Wed.
  • Deals that don’t sell out now linger extra weeks till sold out
  • There is still male/female versions and there seems to be even more personalization going on.
  • They were sending GG to ~10% of their users, that seems to have dramatically broadened

Finally, Groupon recently hired a new leader for the GG group from eBay: Faisal Masud who was in charge of the delivery experience at eBay.

Apples to Apples….

Now that we have a company tracking the eBay deal of the day program and we have been tracking the GG program we can compare the two.  It looks as if eBay’s program is tracking ~$100m this year.  Groupon was at a similar run-rate in Q1 ($100m or $2m/wk), but is really ramping up significantly.  If we model out the Q1 results and take the growth rate with a bit of a conservative haircut and also assume a modest bump for holiday, GG has a shot at ~$180m-200m.

With the new leadership at Groupon Goods, it will be interesting to see if they can accelerate any further or if they dramatically change the program all together.

One thing is for sure -both of these and the explosion of other daily deal ‘channels’ for retailers are win-win for both consumers and merchants and we’ll continue to keep an eye on them for you here at eBay Strategies.

SeekingAlpha Disclosure – I am long Amazon and Google.  eBay is an investor in ChannelAdvisor where I am CEO.