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By | Richard Chirgwin 1st March 2011 02:14

Retailer predicts death of Apple retail channel, eBay gets cozy with brands

Au channels are 'Apple’s bitch', eBay users no longer need bargains

Controversialist and online retailer Ruslan Kogan has caused a minor sensation by using a conference stage to say that successful bricks-and-mortar retailers are “Apple’s bitch”.

The thrust of his argument – ignoring, by the way, that most bricks-and-mortar retail in Australia has nothing to do with the consumer electronics market – is that Apple-related products are the hooks from which retailer profits hang.

Those profits, Kogan claims, have a limited lifetime: Apple will one day unplug the remaining third-party physical channel. This, he said, will mark the “beginning of the end” for bricks-and-mortar retail.

But abandonment seems to be an emerging meme in discussions about online retail in Australia at the moment. eBay’s announcement that it wanted to become the “online Westfield” – a destination for “big brands” to corner consumers – is a case in point.

The idea has been generally accepted as good strategy, and it may be so. It’s also been defended on the basis that “brands” are what consumers are trying to buy. This might also be true.

But the motivations that would make a “Westfield eBay” model attractive to brand owners are the opposite of what motivates eBay users.

What the users want is what they have always wanted: cheap stuff. And they’re willing to buy their cheap stuff from sellers anywhere in the world, as long as the price is right.

The resulting price erosion is exactly what big-name consumer brands want to reverse. If they fall in with eBay’s vision, that will be part of their motivation (including, I would presume, the same sort of geoblocking that drives Australian Amazon users to distraction and means our journalists generate a steady stream of stories telling users how to get around “We’re sorry, that product is only available to American customers” messages).

Whose interests are served if eBay “real estate” becomes the property of the big consumer brands? Not the users. Bargain hunters stopped being eBay’s meal ticket some time ago (secondhand auctions now make up just 22% of sales). Tomorrow’s ideal eBay user isn’t a bargain hunter, it’s a brand hunter – preferably with little judgment and too lazy to dig deep for the best price.

Perhaps – at least in Australia – there’s a future for the Sensis property Trading Post after all. ®

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