When founded in 1995, eBay brought peer-to-peer online resale to the masses through its pioneering marketplace. But, the e-commerce company has attracted an onslaught of competitors over the years. Nearly everyone, from mass retailers Walmart and Amazon to, more recently, specialized rivals like Vestiaire Collective and retailers like Michaels and David’s Bridal, is chipping away at its dominance.
While eBay remains the largest online marketplace, with $74 billion worth of goods sold on its site in 2022 (and 1.7 billion listings), that volume was 15% below 2020. As a result, eBay CEO James Iannone, who conceded the site can’t just be an “everything” store, has focused eBay more sharply on a few core sectors, notably luxury.
To do that, eBay recently began testing a new consignment service that connects users with vetted sellers who list and sell high-end items, initially only designer handbags from certain brands like Valentino and Hermès. EBay has also extended its “authenticity guarantee” program to streetwear, so trained U.S. authenticators can verify brands like Fear of God and Kith.
Iannone, who became CEO of eBay in 2020 after time at Walmart, Sam’s Club, and Barnes & Noble, where he launched the Nook e-reader meant to challenge Amazon’s Kindle, says trying to be all things to all people hurt eBay. The digital auction site’s share of the U.S. e-commerce market fell to 3.5% in 2022 from 4.7% two years earlier, according to Insider Intelligence.
“We had become too much of a one-size-fits-all marketplace, and our customer satisfaction was lagging, so we picked focus areas,” he tells Fortune. Those areas have included luxury, streetwear, and auto parts.
This interview was edited and condensed for clarity.
Fortune: There’s been a boom in luxury resale sites, and eBay is now dipping its toes into this market. What does a marketplace like yours have to offer customers compared to the likes of Vestiaire Collective, The RealReal, or Grailed?
We’re really the pioneers of resale e-commerce. EBay has been where people can unlock value in used, pre-loved, and refurbished items. We added authentication to build a new, game-changing level of trust on the platform. It helps protect buyers who, say, are buying a handbag, then will spend more on the site outside of bags. We also bought Certilogo [in July], which tags luxury apparel and makes tracking the product’s sustainability easier, making it more desirable in the resale market.
You have also dipped your toes in consignment, an area The RealReal and others saddled with inventory when items don’t sell find challenging. What’s the rationale?
We are working on making it so easy to sell that you don’t need to go to a consigner. For instance, our ‘magical listing’ feature, where we do all the heavy lifting for the seller to list their products. [The tool uses AI to analyze data provided by the seller, extrapolate information, and create a blurb, simplifying the listing process.] It’s a small test for us but one we can use to say whether we can do consignment economically.
Speaking of AI, can it help make sure thieves can’t use eBay to unload stolen goods ransacked from a Nordstrom or a museum heist?
Part of why we acquired a company like Certilogo was to be able to track authenticity. It’s also part of why we acquired authentication centers. We’re very good at working with law enforcement and regulators to ensure everything on the site is safe, not stolen or counterfeit goods. We use very advanced AI to help us do that and recognize the telltale signs. We’ve made a lot of investments to keep eBay a clean, well-lit marketplace. [Editor’s note: The U.S. this week sued eBay for allowing the listing of items that violate environmental laws. An eBay spokesperson told Fortune that the”actions are entirely unprecedented, and eBay intends to vigorously defend itself.”)
What role do brands play in making sure goods on resale sites are real?
We just launched a couple of new programs, like a certified-by-brand program where the products are certified by that brand, since we have brands selling directly to consumers on our site, like Adidas. Others include Best Buy, Sonos, and Milwaukee Tools.
There is much more competition for marketplaces like yours than a few years ago. There are, of course, Amazon and Walmart, the luxury resale sites like Vestiaire, but even retailers like Michaels. What’s eBay’s moat against all this?
The first thing is scale. We have access to 190 countries and 132 million buyers, making it easy for someone to come on as a consumer or a seller. We have a lot of what I call accidental entrepreneurs. Such people didn’t set out to build a small business on eBay. We offer cross-category shopping, where people come looking for an item in one category and start shopping in another. So, if you look at some of these marketplaces that are one vertical, they don’t have the same kind of multiplier effect.
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. So, one of the first pillars I focused on was to support our core, meaning we should not be so hung up on newness and the latest in-season fashion. Small specialized competitors were coming up, wanting to steal market share from eBay. And the second was being obsessed with customers and making sure we listened to them. We had become too much of a one-size-fits-all marketplace, and our customer satisfaction was lagging, so we picked focus areas [like accessories, handbags, sneakers, and auto parts.]
Earlier in your career, you spent time at Barnes & Noble and Sam’s Club, both brick-and-mortar retailers. How has that informed how you run an e-commerce site?
One of the benefits of being in retail is being in front of customers regularly. I would spend a lot of time walking stores at Walmart and meeting associates and shoppers. I’ve tried to bring that here to eBay. But we don’t have stores, so how do we do the same type of thing? One way is through events like we’re having tonight in Philadelphia to bring sellers together. At our offices, I spend a lot of time walking the floors and talking to employees. Walmart is very customer-obsessed, and I am bringing that to eBay and making sure we are even more customer-obsessed.
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