How eBay Canada survived the dot-com bust

TORONTO — Lorna Borenstein spends much of her day reading Internet chat boards.

For Borenstein, it isn’t about consuming the latest developments on The Lord of the Rings movie trilogy or debating the authenticity of the bridge of the starship Enterprise, but making sure her customers are happy.

The general manager of eBay Canada, spoke about the value of timely reactions to customer demands at the University of Toronto’s Rotman School of Management in a speech called Understanding human behaviour on the Internet Tuesday evening.

Borenstein has been with eBay since last September. She was formerly head of a Toronto Internet consulting firm and before that a lawyer for Hewlett-Packard (Canada) Ltd.

The reason eBay has thrived while other dot-coms have succumbed to fickle Internet shoppers is the online auction house fosters its community and pays very, very close attention, she said.

“We weren’t particularly clever at anticipating, at guessing what the market needs were going to be. That’s really not the point,” she said. “What we were very good at doing was recognizing what the customers are asking for and giving it to them quickly.”

Case in point was the consumer brouhaha over game console PlayStation2 last fall. Borenstein reads lists of most-searched items on eBay Canada every week. When she noticed PS2 was consistently near the top, a clickable graphic was added to the front page. Not an authorized, paid-for PS2 logo, mind you, but a crude representation of the game platform. “We’re very cost conscious,” said Borenstein.

The result was a sharp increase in the amount of PS2 sales traffic. “We were very quick at reacting to this trend. We didn’t create it, it wasn’t our brainchild, we just listen really, really well,” she said. “For this Christmas, can you say, ‘Xbox’?” (There’s a Harry Potter link on the site right now.)

The ‘If you build it, they will come’ model just doesn’t work online, said Borenstein. She likens it to failed attempts to feed her children broccoli, when what they crave is Fruit Roll-ups. “It’s not going to happen. You’ve got to really think about what you’re feeding your customers.”

Through reading eBay’s dozens of community boards, the company can determine what products warrant their own category and what features shoppers want added to the site. Automotive and clothing are the latest category additions and ‘Buy it now’ is a new feature which allows consumers to purchase items immediately at the seller’s suggested price rather than going through the bidding process. ‘Buy it now’ accounts for 30 per cent of all business and eBay now sells a Corvette every three hours, said Borenstein. “You can measure very quickly — if you’re asking the right questions, if you’re tagging the right parts of your site — what’s working and what isn’t.”

It’s not quite as simple as sorting through eBay user posts, though. The company also conducts extensive market research and owes some of its success in car sales to a partnership with Auto Trader magazine. The latest wrinkle in marketing strategy is getting eBay devotees to carry the message into the offline world.

In something akin to an authorized reseller program, eBay equips its most popular vendors with branded trinkets like T-shirts and pens to give away at trade shows, conventions and flea markets. According to Borenstein, it increases the amount of foot traffic to a vendor’s booth or stall and serves as a cost-effective promotional tool for the company.

In an era when online retailers are perused then discarded as quickly as daily newspapers, Borenstein offered the following advice to budding Internet barons: Stop what you’re doing and ask your customers first.

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Jim Love, Chief Content Officer, IT World Canada

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