My take

Consumers love flash sales and I bet Amazon takes the Woot! platform and comes out with some different vertical offerings (Zappos Woot for shoes!) and runs hard at the Gilt, Ruelala type offerings.

What do you make of this match-up? Sound off in comments.

SeekingAlpha Disclosure - I am long Amazon and Google, eBay is an investor in ChannelAdvisor where I am CEO.

 He mentioned online shoe retailer Zappos, which Amazon acquired in a $1 billion-plus deal last year, and called apparel a "very important category."  "It has a very large market segment we can address," he said.

"We are the largest seller of fashion in the World.  We are driving more vertical shopping experiences on eBay for better customer experiences (implication is fashion will be first)."

Both of these quotes and Amazon's changes today set up the next big battleground between eBay and Amazon.  While eBay maybe the largest in fashion (they don't disclose category GMV that I'm aware of and there's no other source (comscore, etc.) that breaks down verticals on eBay/Amazon so it's hard to verify), but Amazon with the Zappos acquisition and their new focus is definitely setting up to challenge that.

This will be interesting because Amazon has these advantages:

• Better buying experience overall
• Demographics that better favor the Fashion category
• Did I mention Zappos?
• Better seller data - Amazon already has better data quality and is taking that to 4.0, eBay isn't at 1.0 - their renewed focus on CSA auctions is undoing the work sellers made for simple things like variations.

eBay has the primary advantage of being a neutral party and not having a 'first party' competitive business that fashion retailers and manufacturers need to worry about.  

This is going to be a really interesting battle and we'll be reporting on each blow between Amazon Strategies and eBay strategies.  While it's not the war, the winner of this battle will be set up to roll their advantage right into the next strategic categories and potentially win the whole enchilada.

Let's dig into this first volley in the CSA smackdown.

Early results - eBay fashion denim vs. Amazon Denim Shop

Today's announcement is for a future enhancement for Amazon that is yet to be seen, but as a baseline, I wanted to compare what eBay released earlier this year to where Amazon is.

First, let's look at the new eBay fashion experience.  As a use case, we'll look for a pair of men's Levi's jeans with 36 waist and 29 inseam - relaxed style straight leg in stone wash.

eBay Steps: (this is the new experience, the old experience is here)

• eBay.com
• Fashion button 
• Men's clothing button or click here.
• At the top, click on jeans.
• There is no Levi's brand in the brand list so scroll down to the size selector
• Select 36 waist, 29 inseam straight leg AND relaxed and you see some jeans you can browse in the eBay 'window shop' view as seen here:

 At first blush this is pretty handy, BUT eBay hasn't given me the ability to filter by brand, so I have to hit the 'see all items' box where I am taken to more of a classic eBay shopping experience where you can see the fancy jean selector has splatted out a basic eBay search: (click to enlarge) with 7k results.  

So from here I now have to: (start at 7k results)

• Check the 29 box (down to 169 results)
• Check the Levis box  (down to 70 results)
• Check the New condition box (down to 50 results)

Now we should be down to a set where the top 10 results get us what we want:

Here's a quick review of the top 10 results: (keep in mind I have clearly specified waist size 36 - you can see it above)

1. 44 waist in the title, no idea why this is here
2. Actually has a 36 waist and 29 inseam
3. 46 waist
4. 44 waist
5. 44 waist
6. 44 waist
7. 44 waist
8. 44 waist (note yes - these are all the same thing)
9. The right waist, but they are tan?
10. appears to be the right waist.

So if we look at listing 2 and 10:

Result 2 is a pair of 550's that are auctions with 6 days left or I can BIN for $30+$6 S+H = $36.

Result 10 is a deal at $19 with $8 S+H - $27 for a pair of $40 MSRP jeans - sound too good be true?  Ahhh, the listing has this nice little tidbit in the listing: "Please note: Marked irregular on inside tag due to small imperfection or mis-stitch " (they are marked new.

Let's say I actually want 560's - I have to go to the search and enter 560 - I can actually find some on the site that seem to a) be the right size 560's and b) not irregular that are $32.99 BIN with $10 S+H = $42.  This is good because I've found the typical eBay selection of jeans is actually pretty thin.

Amazon steps:

• Amazon.com
• Clothing category
• Denim shop - 6th link on the left, or just go here.
• Pick 'Men's and then "Levis" brand
• Select 36 waist, relaxed, 29 inseam, color 'stone wash'
• We are now presented with three options: silver tab, 550 and 560 models:

If you pick the 560, you are delivered right to a page to buy that item.  The only glitch in this experience is that when I land at the 560 page, I am asked to enter the size and color again - so that is a bit of a glitchy experience that could be improved, but it over-all, I am able to get to my jeans in a very visual way in about 6 steps.  These jeans are $32 with free Prime shipping (woot!).

The June Denim Shop results - advantage Amazon

So based on where we are in June 2010 with this example:

• eBay has amped up the fashion category and put a new experience on the old eBay data
• Amazon has just released the denim shop, but on the standard Amazon shopping experience
• Amazon has NOT released the new experience they are asking sellers for today

Amazon clearly has a serious lead on the eBay buying experience AND in selection for this example.  I can find my jeans much faster AND for $32 vs. eBay's more, ummm adventurous search experience to find the $41 jeans. 

Amazon's Note to Apparel Sellers - give us MORE data!

Here is the note that Amazon sent out to sellers today: (yes ChannelAdvisor is on top of this and will support day 1)

Greetings from the Amazon.com Clothing Team,

Amazon is in the process of transforming our Clothing & Accessories Store into one of the most compelling shopping websites on the internet. We are focusing on improving the customer experience, making it easier and more fun to shop in our store.

What does this mean to you as a seller in the Amazon Clothing & Accessories Store?

You will be able to leverage exciting new changes in the store by upgrading to a new feed format. The new format will get your products into the right browse nodes and allow us to better merchandise the store to improve the customer shopping experience.

What's new?

* New Required Attributes:

-- Item Type Keywords (ITKs) replace Style Keywords for browse classification

-- UPCs (required for all major brands)

-- Color

-- Size

* New Highly Recommended or Desired Attributes:

-- apparel-closure-type (for example, button fly for jeans)

-- belt-style (for example, western)

-- bottom-style (for example, bikini)

-- sleeve-type (for example, short-sleeve)

-- collar-type (for example, boatneck)

All the documents you'll need for taking advantage of the new Clothing & Accessories feed format are available in Seller Central Help:

* Text-File Template  Manage Inventory: Reference: Text-file Templates: Inventory File Templates

* Item Classification Guide (ICG), contains the Item Type Keywords Manage Inventory: Reference: Item Classification Guides (ICGs)

* ClothingAccessories Product Category XSD XML & Data Exchange: Reference: XSDs (Search on "Product Category XSDs" once you reach the page.)

* XML Guidelines

Increase Sales: Reference: Category Management: News & Best Practices: Clothing & Accessories: XML Documentation

Valid Values, Optimizing Attributes, and Size Guidelines tabs are in the text-file template and the XML Guidelines document. Use the information on these tabs in conjunction with the ICG to classify your products in the Amazon.com browse structure.

Enter Item Type Keywords just the way you see them in the ICG, all lower case and separated by hyphens. There is only one Item Type Keyword per SKU. Use the most detailed Item Type Keyword possible, as it will inherit all of the attributes of those above it in the same section. (The further an ITK is indented, the more detailed it is.)

When do you need to be moved over to the New Feed?

The new feed format is named ClothingAccessories. The earlier versions of the templates and XSDs are now named Shoes, Handbags, Sunglasses/Eyewear. You can continue to use the earlier versions for Clothing until you are ready to switch over completely to the new feed format.

We recommend moving to the new feed format before October 15, 2010. This will allow you to maximize your sales and fully leverage the new browse and classification structure for holiday sales. Amazon will also be able to better merchandise and promote your Clothing & Accessories items during the holiday season using our new classification structure.

The most time intensive part of moving over to the new feed format will be identifying the correct Item Type Keyword for each product; once this is completed, you will be ready to go.

For additional information on how to maximize your business in the Amazon Clothing & Accessories Store, please review our Category Style Guide in Seller Central Help: Manage Inventory: Reference: Text-file Templates: Inventory File Templates (Search on "style" once you reach the page.)

Thanks for selling on Amazon.com.

Kind regards,

Amazon.com Clothing Team

Also if you are at IRCE, we are in booth 501 and are able to demo our Amazon 2.0 software that is getting rave reviews from retailers of all sizes.

We had a bit of a scoop here in early March when we detailed what we were hearing about Amazon Webstore from retailers.  Today, Amazon has formally announced the offering and opened a full website at webstore.amazon.com with full details about the offering.   In this post we'll cover some of the new information and speculate what the new webstore means for the e-commerce space.

Impressive launch customer list

For launch, Amazon webstore has a very impressive list including many name brands:

• Timex
• Creative Labs
• Atlantic Records
• Samsonite
• Boeing
• Martha Stewart
• Sony music

Pricing is revealed!

There has been a lot of speculation on the pricing of the store.  Amazon's first store was very over priced at > 2% with an additional payment processing fee.  Amazon has revealed the pricing today and this graphic does a good job of summarizing things. Interestingly, the pricing depends on which Amazon services you use.  If you utilize both FBA and sell on Amazon, you get the biggest discount, with the least discount for someone that doesn't use either amazon service.

Note that these prices do not include payment processing which is tiered by sales volume and if the customer is registered with Amazon or not.  Payment processing ranges from 2.9% on the high end (well 5% for items < $10) to 1.9% on the low-end.

It's interesting to see Amazon cut fees to the .7%-2% range and this range is well beyond what we were hearing prior to today's 'reveal'.

What is webstore and a real-world checkout example

When I mention this new store, many analysts and retailers have a hard time understanding what it is.  It is essentially a 100% stand alone store.  It's not like Target.com where you know from the look and feel, and especially checkout, that this is an Amazon-cloned experience.  If you look at any of the sites I highlighted above, aside from this blog, you wouldn't know they are Amazon-technology based stores.  

The only time you get a hint the store is affiliated with Amazon is at checkout (and some have even customized this to be less Amazon flavored). For example, here is a screen shot (click to enlarge) of a checkout from shoplift.com (an Amazon webstore).

 This is actually similar to any CheckoutByAmazon (CBA) integration, but with a little more flare around the bottom 'safe.secure.reliable' band at the bottom there.

Speculation on webstore impact on e-commerce ecosystem

In the last webstore post, we segmented out the e-commerce platform players into Enterprise software, enterprise services, cart software and SaaS solutions.  

This offering clearly is in the SaaS solution camp, but seeing the launch sites and based on what we're hearing, Amazon could actually be using this offering to go after more of the GSI (NASDAQ:GSIC) and Digital River (NASDAQ:DRIV) players. 

Here's some thoughts on what makes me lean that way:

• Many of the launch partners are 'manufacturers' (or vendors in retailer-speak).  This is an area that is coming on-line in record numbers to establish a more direct relationship with consumers.
• Both Digital River and GSI are chasing this market opportunity. Digital River is focused on Consumer Electronics (CE) vendors (like Creative Labs) and GSI has had success with apparel manufacturers (No big Amazon wins there....yet).
• Amazon has created a more 'Lego block' approach where the manufacturer can take down store, FBA, and selling on Amazon.
• As the largest internet retailer, Amazon has a lot of leverage.  For most manufacturers, they are the largest online channel already.  Amazon could (if they want, no idea if they are doing this), leverage that buying arrangement in myriad ways to drive adoption of the platform.  This is a lever that neither GSI or DRIV have at their disposal.

The only chink in the armor with this strategy is that most online retailers have a healthy respect (a.k.a. fear) of Amazon and I'm not sure how many manufacturers are going to want Amazon knowing so much about their direct-to-consumer strategy and results.  However they do have a growing list of name brands that don't seem to be concerned.

What do you think of the offering? Sound off in comments.

SeekingAlpha Disclosure - I am long Amazon and Google. eBay is an investor in ChannelAdvisor, where I am CEO.

Today, serial entrepreneur Chris Dixon has a blog post that shines a light on the real potential loser from Amazon's dominance - Google.

We've long thought at ChannelAdvisor that it is interesting that Google has taken their eye off of the core business.  It's somewhat reminiscent of eBay's focus from 01-08 on all things 'not eBay': China, Skype, etc. which left the core marketplace business atrophied and open to competition from Amazon.

Google gets approximately 40% of its revenue from the 'retail' vertical, yet since Google Checkout (atrophied), hasn't done anything to really innovate in the vertical.   In the meantime, Amazon has created the best product search engine which is gobbling up share hand over fist.  Sooner or later consumers will stop using Google to start the search, and just use Amazon.

A couple of data points indicate this is already happening:

• Amazon's revenue is growing faster than Google on a y/y basis
• Amazon's traffic is growing faster than Google's
• For many customers that are on both Google (Adwords) and Amazon, Amazon's same-store-sales are growing much faster than Googles.

Perhaps with the appointment of Stephanie Tilenius as VP of e-commerce at Google, they realize this is a potential problem for them.  Stephanie gave a talk at ChannelAdvisor's Catalyst recently and hinted at some big things to come.  She'll be speaking in early June at the Internet Retailer Conference and Exhibition (IRCE for you home gamers) and the title of the talk is "Google enters the e-commerce arena".

We'll be live blogging, so stay tuned.

SeekingAlpha Disclosure - I am long Google and Amazon. eBay is an investor in ChannelAdvisor.

We have historically done a bunch of what I would call 'Amazon 101' webinars for folks just looking at the platform and wanting to get started.

Tomorrow we are hosting a complimentary Amazon oriented webinar that is more of a 201  -you're on Amazon, things are cooking, but you want to take it to the next level.  Many sellers feel that once their products are on Amazon, you can 'set and forget'.  That's one approach, but like any channel, Amazon has many second and third order things you can do to continue to boost sales.  For example - are you doing the right things for Amazon SEO (optimizing within the Amazon search engine), are you merchandising your products, are you being competitive with pricing, are you considering leveraging FBA and of course, what are you doing to own the infamous buy-box?

We'll be covering a lot of these more advanced topics and of course will have Q+A with a group of folks that know more about the ins and outs of selling on Amazon than anyone outside of Amazon's four walls.

The webinar is tomorrow, May 20th at 2pm ET and you can register here.

Amazon announced Q1 2010 results last night and held an analyst conference call (transcript here).  I wanted to surface some interesting tidbits from both.  FYI EGM stands for Electronics and General Merchandise - basically the non-media part of Amazon's e-commerce retail business.

Follow the GMV growth

First, I always like to look at sales trends in the four segments that Amazon reports against (always ex-FX to strip out the impact of currency rate fluctuations):

There's been a lot of talk on Wall St. about Amazon not exceeding expectations and maybe the growth story is over, etc.  I'm not in the expectation business, but looking at Amazon's Q through the e-commerce lens, all I see is continued growth, heck accelerating growth!, and it looks like Amazon keeps finding more gears to the engine to continue to pull away from the competition.

Some highlights:

• Amazon saw material acceleration in its domestic business and EGM segments (Domestic I'm sure was due to EGM).
• Overall Amazon's y/y growth rate was 42%, up 5% from the Q409 period - this acceleration happened during a non-holiday period folks!

Why is Amazon accelerating?

Amazon doesn't give enough information to be able to specifically say that X was the source of growth, but reading between the lines and the body language on the call, here are the top three initiatives that seem to be bearing fruit:

• Amazon grew units at 40% y/y - truly amazing and the heart of the growth engine.
• Amazon Prime - This program celebrated it's fifth year domestically, but is very nascent internationally.  Also domestically they really put their foot on the gas about 18 months ago - I believe all segments are enjoying increased purchase frequency from Prime.  Our estimates put Prime at a 5-7% penetration of users, BUT the Prime users are generally 2-10X as active as non-prime, so they represent 12-20% of Amazon sales now.
• Merchandising - Amazon has made several interesting tweaks to merchandising that are bearing fruit and driving that per customer GMV up.
• 3p - This program continues to be on fire.  As mentioned we are seeing 55% SSS growth, the absolute number is so large, I can only call it monsterous.

Amazon Web Services (AWS) starting to get some love

Earlier in the quarter, Amazon held an AWS conference that Citi had an interesting report on.  I noticed in the PR and the call, they mentioned AWS more than previously.  AWS is Amazon's cloud computing initiative that I think is significantly under-hyped.  I talk to a LOT of startups and Amazon is the standard in cloud computing for that group as well as many larger companies such as Netflix.  This business has to have huge margins compared to core and it will be interesting to see if/when it starts to contribute and Wall St. wakes up to it.

Amazon's share gains accelerate - or 'Eat our Dust'

Jeetil Patel at DB has a great chart in his Amazon report replicated here that graphs e-commerce growth (as reported by comscore) against Amazon  as well as overall retail sales.  

Amazon vs. eBay

As the two largest players in e-commerce, it's important to compare the growth rates of Amazon and eBay to understand where the share is going.  As reported on sister-site, eBay Strategies, eBay grew at 8% in Q1 - a flat performance vs. Q409.  Compare that with Amazon printing a 42% growth quarter on top of 37% last Q and you have Amazon going from a 29% growth advantage in Q409 to a 34% growth advantage.

Amazon is pulling away from eBay every quarter and thus taking share at an accelerating pace.   In isolation, I think the changes eBay is making to regenerate growth are prudent, but in a world with Amazon as a competitor, they seem too small and incremental to even stem the bleeding, much less catch up.

Graphically if you imagine eBay at 8% for the last two Q's on the chart above, you can see the gap growing visually.

Other interesting tidbits

• For the first time in Amazon history, EGM  revenue surpassed media
• Active sellers on Amazon grew 22% to 2m
• Active buyers grew 25% to 114m  (this is a metric eBay has struggled to make any progress with)
• Revenue/customer grew to $65 (19% y/y increase)
• 3P stayed steady at 31% of units (but had to grow 40% y/y to stay there as units grew 40%)
• Amazon added 1,800 people in the quarter! (wow)
• They specifically talked about investing in FBA capacity on the call
• Q1 Capex grew to $140m - that's a lot of servers, I wonder if this is AWS growth related.

Sound off in comments if you have any interesting thoughts on Amazon's Q or insight into the eBay/Amazon battle.

Seeking Alpha Disclosure - I am long Amazon and Google. eBay is an investor in ChannelAdvisor.

Amazon is obsessed with selection, pricing and customer service. EGM was up 56% y/y and prob the best metric for our audience.

Amazon loves the single buyer page model - one product , lots of sellers.

The buy box is the single biggest driver of a seller's volume. Customer service, via your trust score that is a reflection of your order defect rate is
Very important.

New focuses in 2010:

* auto parts - a rapidly growing Category that they are recruiting a lot of sellers for.
* lighting - same as above
* mobile - seller offers are now on mobile site and iPhone app.
* Used buy box - putting a new buy box that is 3p using
* attribute based navigation - older, but really getting traction now.

How to sell more on Amazon

* Check your customer metrics in your Amazon account as frequently as possible. Low metrics will result in suspension or no buy box exposure.
* they have several Seller Central Tutorials that they recommend all sellers view, even those with experience.
* site metrics - let's you analyze your products to see best sellers and tweak your strategy. For example you may have a lot of volume, but not a lot of sales. Pricing is one lever, also that is a flag for FBA where Prime users aren't buying your items.
* They are seeing greater use of variants and imagezoom features on the item page.
* Buyers use the guided shipping widgets that are attribute driven so sellers should make sure sending all attributes.
* Search optimization - make sure your browse nodes and keywords are optimized and you have
Descriptive text that includes your keywords in proximity.
* Conversions play a big role in the Amazon search engine.
* make sure your product titles are thorough, but do not include price or other items like NWT
* use FBA!

FBA

Getting a lot more use, the tools are better and the process Is faster based on seller feedback.
- he covered the usual FBA background and pros of the program (prime)

Then he went through a FBA case study of gamesbuyer.co.UK and then a DE seller babys und kids. The later enjoyed a 30% increase. Ajother seller doubled their sales in the first week.

They are offering an FBA promo to attendees.