Improved User Experience Driving Organic Growth at $EBAY, with Plenty of Upside

$EBAY has long been one of the most optically undervalued names in the internet space, due in part to disappointing fx-neutral GMV growth over the last few years. Now its position in the e-commerce space is under attack — Amazon is ahead of the pack and likely to stay that way, and the rest of the space is crowded with challengers. Walmart and others are making significant investments in their marketplace businesses and see EBAY as market share opportunity in the space.

Saving Ebay

Ebay’s main defense against this is a move to a product-based catalog from a listings-based catalog, otherwise known as their structured data initiative. This is meant to improve performance in organic search and product discovery. The latter still needs a lot of work in both of the key elements of discovery: Inventory and Personalization.

Problems with Inventory

I tried looking for a Fitbit and the first result is the very original Charge from two years ago. None of the top 5 models are a new product. Just compare that to Amazon’s search results on the right:

eBay vs Amazon Products
eBay vs Amazon Inventory Listings

Problems with Personalization

Ebay still has work left to do on personalization as well — just look at the main page screenshots below. When entering my login credentials (right) and without login (left). Most items are either the same product or in a similar category to the rest. There is no personalization here, which is quite sad considering I have made dozens of purchases over the last couple of years.

eBay Personalization
eBay Personalization

But Are Things Turning?

Ebay does seem to be making improvements, however. In its Q2 results, EBAY posted an fxn (fx neutral) GMV beat and guided up full year revenues with management pointing to early benefits from the structured data rollout. This coupled with improved profitability pushed the stock up massively.

For Q3, the structured data rollout will continue to be a focus. Our Mosaic data shows some competing trends here. Analysts expect fxn GMV to decelerate (blue line w/ markers), but website traffic (orange) continues to remain at very elevated levels, although the relationship has admittedly broken down a bit. Channeladvisor SSS data (purple) and Google Trends (green) are also ticking up on the quarter but are not indicating a material dislocation vs. expectations.

 

screen-shot-2016-10-14-at-10-37-56-am
Ebay’s data on Mosaic

 

We also see engagement significantly improving in the charts below, supporting the thesis of an improved user experience. Monthly average pages displayed (left) and monthly average stay per visitor (right) both seem to be accelerating.

Solid Improvement Through Summer
Solid Improvement Through Summer
People really are spending more time on the site!
People really are spending more time on the site!

EBAY seems to be making some improvements to the user experience and has seen early positive results. While EBAY stands to benefit from the e-commerce wave, it must still navigate a changing landscape riddled with immense competition.

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The 7 Habits of Highly Effective Equity Analysts

7 Habits Up Front

  1. Be Proactive: Optimize Your Coverage Universe and Expand Your Circle of Influence
  2. Begin With The End In Mind: Don’t Miss the Macro for the Micro or the Structural for the Near-Term
  3. Put First Things First: Maintain A Catalyst Calendar and Do The Work Well Ahead
  4. Think Win-Win: Giving More Than You Take in meeting Sellside, Management, and Industry Contacts
  5. Seek First To Understand, Then To Be Understood: Take Notes, then Use Visuals Often
  6. Synergize: Synthesize Your Information and Debate It With Your Team
  7. Sharpen The Saw: Research New Techniques

Why Make Effectiveness A Habit?

We at Sentieo care a lot about helping Equity Analysts do their job better. That’s pretty much all we do. It’s not just an efficiency argument, that Equity Analysts are expensive and as a population have limited time to cover a large range of stocks in depth. As former buy-siders ourselves, we know what it’s like to continually grind away at an established process that sometimes, to put it bluntly, just isn’t working. As managers of Equity Analysts, we have also felt the struggle of “quality control” beyond boiling the investment process down to rote form filling and box checking. We surveyed the Sentieo community and from our interactions with hundreds of analysts decided to put together broad takeaways. If it helps just one analyst get more effective, we will have done our job.

although we may never be this good

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Technical Thoughts: Sentieo’s Alexa Skill and the Three Fundamental Laws of Voice User Experience $AMZN $GOOGL $AAPL

Sentieo’s Alexa Skill is live! We present some thoughts from our technical team recapping our experiences for the benefit of those who are keen on considering the future of computer interfaces.

For Voice User Interfaces (VUIs) to have any chance of success, the future direction of Voice User Experience (VUX) will be strongly tied to physical, not software, constraints.

The three features of these will be:

1) At least 100 words per minute (wpm) input

2) close to 200wpm output

3) under 250ms response time.

We are nowhere close.

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Casper is no friendly ghost.. just ask $TPX

The rise of “mattress in a box” startups like Casper, Tuft and Needle, and Leesa is gaining steam and has potential to up-end traditional mattress businesses. This threat has been discussed for some time — the red bars in the chart below show document mentions of Casper, Tuft and Needle and Leesa in documents tagged to legacy mattress companies. Legacy companies’ stock prices peaked just as document mentions of the non-traditional players became more prevalent.

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Fresh from Sentieo Mad Science Labs: Introducing the Sentieo Alexa Skill

When we say we want you to have your financial information wherever you go, we weren’t kidding. Whether AR or VR, autonomous vehicles or drones wins the next platform race, we think voice interaction is the future of human-computer interaction. So the mad scientists at Sentieo Mad Science Labs have put together the most data-packed stocks skill available on the Amazon Echo and released it into the wild, completely free to you.

Madness, you say?


Note: for a more serious discussion of where we think voice interfaces will go in the near future, head over to our Technical Thoughts.

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ASNA 4Q miss, Stock Plunges by 25%: Evidence of Retail Bloodbath

Ascena Retail’s stock was down 25% on Tuesday after reporting disastrous 4Q16 results. The comp store sales declined -5% in 4Q16 vs. consensus estimate of -2.3% and EPS came in at $0.08 vs. consensus estimate of $0.16. Further, the company guided for a -1% to -2% comp store sale growth for FY17, despite weak comps in FY16. We use Sentieo’s plotter tool to track the revenue estimates and stock price for ASNA, and note a severe downward revision after yesterday’s results.

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We highlighted in our previous blog post that the retail sector is going through a rough patch due to digital disruption, weak consumer sentiment (driven by election fears), and commodity deflation, leading to a series of bankruptcies and store closures.

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$GOOGL Trips Goes Native: When will $AMZN buy $TRIP?

We have spent the past day playing around with the new Google Trips native app. Reviews have been effusive, with titles like “killer travel app” (The Verge) and “a free, full-time travel guide” (TechRadar). The user interface is a breath of fresh air and matches the clean aesthetic we’ve come to know and love from Google, but it doesn’t make us run out and short TripAdvisor right away. Unlike the Chinese OTA sector, where the two industry leaders $QUNR and $CTRP literally threw billions at each other before finally making peace, the Western “TripAdvice” industry is bifurcating and this is the reason why $GOOGL and $TRIP will coexist peacefully in the medium term. In the long term, $TRIP will probably not exist as an independent entity. We explore why it could be worth more to $AMZN instead.

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Retail Bloodbath: Parsing the Cyclical, Electoral, and Structural Triple Threat

The retail sector is going through a rough patch due to digital disruption, weak consumer sentiment (driven by election fears), and commodity deflation, leading to a series of bankruptcies and store closures. According to Sentieo’s document search, retailers are facing the toughest of times – evidenced by drastically increased rates of store closures, and putting into question the very survival of these firms.

Bankruptcy and store closures trending higher vs. 2008 recession period

The American retail landscape has seen a host of bankruptcies (Aeropostale, Sports Authority, Sports Chalet) and store closures in the last couple years. Macy’s recently announced the closure of 100 stores in FY17, followed by 40 closures in FY16.

We did a document search in Sentieo of all retailers for the term “Store closure.” As seen in the graph below, the mention of “store closure” by retailers is trending higher vs. the 2008-09 recession and the 2012 election, highlighting the ongoing bloodbath in the retail space.

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Major Update: All Roads Now Lead To The Sentieo Mobile App

Download links: iPhone | iPad | Android

We are very excited to finally roll out minor updates for Android and major updates across our suite of iOS apps. Alongside enterprise-level security upgrades (please ask your sales representative if this is of interest) and highly requested Stream/Watchlist updates, we wanted to highlight three ways we have completely blown open access:

  1. Deeplink from Sentieo Edge to the app
  2. One-touch access from your Notification Center to the app
  3. Clip any articles or PDFs to Sentieo through the app


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Americans cut their spend as election fears loom – Part 1

As the race to the U.S. presidential elections is underway, we take a look at sectors being impacted most by the 2016 election season. Generally, in the run-up to an election, consumers tend to cut back on discretionary expenditures due to the uncertainty around the political climate.

Measuring in Quantitative Terms

One such sector feeling the heat is the Restaurant sector – both casual dining and quick service restaurants. We did a document search in Sentieo with the term “Elections” for restaurant companies. The first thing we noticed was that the mention of the term “Elections” during 2016 has been 50% more than that during the 2012 election period.

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