Wednesday, January 7, 2015
Close5: eBay's San Diego Move Into The Mobile, Local Market
Story by Benjamin F. Kuo
In the last few years, Southern California has been a key market in launching mobile applications and services, due to a huge, mobile-savvy consumer population. So, it's no surprise that the area--specifically, San Diego--was chosen for the pilot launch of a new service from eBay, called Close5 (www.close5.com), which offers up local, peer-to-peer sales. We spoke with Bart Molenda, Head of Market at eBay Classifieds Group and eBay's Close5 efforts, on why and how eBay is using San Diego as the spearhead of its move into enabling local transactions in the mobile app era--and taking on Craigslist-all at the same time.
What is Close5?
Bart Molenda: Close5 is a mobile based app that makes it very simple to buy and sell, in particular in your area. Our aspiration is to make buying and selling within five miles of you, to neighbors and people around you very easy, so you don't have to travel from one end of the city to another. Your neighbors typically have goods that are similar to what you would be interested in, because of your demographics, and it's awesome to be able to see what's around you, and easily trade with people around you.
This is the brainchild of eBay, and specifically eBay's Classifieds group, which runs classified sites around the world. We have about sixteen sites around the world that operate under different brand names and with different goals. All of those are desktop-based sites, although we also have mobile experiences and mobile apps. However, in the United States, we haven't done anything major with our classified sites--it's just a shell of a site. However, classifies have not yet caught up with mobile. Because of that, we've been working on creating technology which can turn the page on the experience, and make it faster to buy and sell items, by putting something mobile first, rather than making mobile an afterthought, providing a better design, making it easier to use, making it faster, and which doesn't require many steps and complexity to post. We also want to be able to take advantage of the security which is built into mobile platforms. So, we're taking that concept and launching it here in San Diego.
Why San Diego?
Bart Molenda: Because it's a great, strong classifieds economy. Classifies, as you may or may not know, have around 20 percent of Americans using them monthly. We, for instance, own a large classifieds site in Canada, where I used to work. There, we see over 40 percent of Canadians using that site monthly. So, there's still a huge opportunity to use classifieds more, and we think that part of the issue is the experience isn't as good as it can be. San Diego is a great market for us, because it has strong smartphone usage, and a great, mixed demographic. In particular, it's a safe, well connected market, and it's easy to get around for trading, and it's also easy for us to reach via media. Some markets are tougher to break into, because they might have pockets of users or demographics that do not fit together. San Diego is a good, open, and safe demographic that we can reach easily, and it's a good opportunity compared with somewhere like New York or San Francisco. We see it as a big opportunity to launch this, and create a model for other sites to launch into as well.
You can't mention classifieds without talking about Craigslist, where do you see yourself compared with them?
Bart Molenda: Craigslist is a mature site, and it'sbeen around for awhile. We're really familiar with them. However, in the twenty years people have been using classifieds, people have turned their back on it. It's a poor experience, and people don't feel that it's something they want to associate with, because of many shady, anonymous transactions, and categories on the site which are not family friendly. As eBay, we have the ability to really focus on a more, family friendly experience, and put more customer service behind our product. We operate our site differently, here and in other markets. That's a major differentiator in the way we've designed this. We're looking at and monitoring every user, and every posting they put up. Of course, we have technology to help us with that, but we offer human intervention to make sure that transactions go smoothly. That's the part of eBay and our infrastructure that give us a competitive edge. We believe that experience will open the door to more transparency and user profiles, which let us use technology and our customer service teams in order to manage all of this. That gives us a competitive edge, and takes away from something that is very anonymous to something more friendly and neighborly.
It's unusual in such a big company as eBay having such a limited release on the app, just San Diego. Why is that, given that you probably could have gone national and gained critical mass on this right away?
Bart Molenda: That's a good question. I'll tell you, quite frankly, is that to do a national rollout in a place like the U.S., with its 300 million people, and hit them all at once, is a massive investment and takes a hugely coordinated effort. The model we want to use is more like how Uber rolled out city by city, or how Yelp rolled out in the early days. We want to make sure the product is right, and market to the right audience in each city individually. As an example, we have a community manager specifically for the city of San Diego, who is focusing all of her experience on that market, making sure we target the right media, bring people on board, manage the community locally, and even hold personalized meetups. In that way, we are building a product that resonates with our audience, rather than just spraying and praying, and just going nationwide and using big dollars to create a brand. You'll see us more on the streets, with brand ambassadors, speaking to our customers face to face. That's a big difference from many websites. You don't see the Google's and Yahoo's of the world on the street, interacting with customers. We're doing that, plus doing our marketing and brand building from the bottom up, from the grass roots level.
What's been driving adoption so far in San Diego?
Bart Molenda: Our focus in particular here is on categories specific to day to day household usage, used by moms. You'll see in our advertising and in our messaging that there is lots of activity focused on the mom demographic. That means, it's things like strollers, baby items, and household furniture. It's really the hard, good, tangible products which have a bit of turnover in the house. The mom audience is not really addressed now by classifieds. However, they are strong social influencers, are very connected to each other as a network and as a group, both online and in person. They share a lot of information, have really strong purchasing power for everything from baby toys to cars, and are the main decision maker and purchasing agent at home. What some people don't know, is that moms have higher smartphone usage than students, and are very stron gusers--because they're doing hundreds of things all day, and are very busy. They have no time to sit at their computer. That's why we're really focusing on mobile usage as an important factor, and want to get that right.