Ebay Target Market
With the rise of smart phone technology, even the Baby Boomers are catching on to the trend. Roughly about 15% of smart phone users are over 55 years old and with the rise of computer tablets, it provides this generation with an alternative way to access the internet. This generation has many characteristics that would help eBay to expand their market even more. Since Baby Boomers are independent, eBay would benefit since eBay users are in control of when and what to purchase.
Another attractive characteristic of the Baby Boomers is that they tend to be more financially stable than the younger generation. Since they have already established funds for retirement, they have more flexibility with their spending. This group is also more likely to acquire a hobby or sell items they have collected over the years. Amazon, eBay’s competitor, already targets this generation with their main users ranging in age from 55-64 years old. When looking at Amazon’s segmentation on household income, their focus is on less affluent households compared to eBay’s high affluent families.
One area that sets eBay apart from their competitors like Amazon is that eBay doesn’t use brick and motor companies, its products solely come from people from all around the world. To put their customers at ease while shopping, eBay has established the eBay Buyer Protection which covers the majority of the items on eBay. If a buyer did not receive the item that was ordered or it did not match the description as provided by the seller, eBay asks that the buyer first try to contact the seller and agree on a mutual solution.
If this doesn’t work, then eBay advises to escalate it to an eBay Customer Support Specialist. If the ordered item is still not received, eBay will then refund the item and shipping costs by depositing funds into the buyer’s PayPal account. eBay needs to focus on several issues to become more competitive. One issue is the fact that their competitors, like Amazon, make website purchases less difficult. On Amazon a customer can make a quick buy instead of having to bid on an item, wait for the auction to end, and then see if they won the auction.
Another issue for eBay is the customer’s perception that scams are more likely on their site since purchases involve individuals and not companies. Even though eBay has the buyer protection plan to counter this idea, some customers might still shy away because they do not want to take a chance of having to go through the dispute resolution process in case it is a scam. When looking at Amazon’s return policy, they back their buyers 100%. If the buyer is not satisfied with the product or it doesn’t match the description that was on the website, Amazon will give the buyer a full refund.
Looking at this from a buyer’s perspective, it makes purchasing more convenient to return a product as opposed to having to track down the buyer and trying to work out a resolution. I think that if eBay changes the protection policy and would adopt the policy of Amazon, eBay would generate a larger customer base. Another critical concern that eBay is facing is that they charge fees for accessing your money when using PayPal whereas Amazon does not.
Looking at this from a seller’s point of view I would not even consider using eBay if they are going to charge me a fee to access my funds. eBay has been contemplating a switch to a PayPal-only system which will increase the fees for using PayPal and will drive away sellers. So In conclusion, if eBay expands their market segmentation to the Baby Boomer generation they will expand their market growth. The critical issues that eBay must address is to make their return policy more customer convenient if unsatisfied with product and to focus on reconsidering reducing the PayPal fees