*michael parekh on IT*: ON ADDITIONAL OPPORTUNITIES FOR eBAY, AMAZON AND ONLINE RETAILERS

THE HUNT FOR A BARGAIN

One of my most vivid memories as a small kid growing up in a dusty town in the middle east, was going to a huge, sprawling used car lot miles out of town in the desert with my Dad every few weeks.

He would love walking through the vast collection of used vehicles, kicking tires, peering under the hood, and generally being an adult kid in a candy shop.

Occasionally, every other year, when he'd saved up some money, he'd end up trading an existing jalopy for a better branded, used car.

When confronted by my mom a few hours later, he'd start his rationalization with "you won't believe how few miles it has on it" and "what a great deal we got", not to mention "I got it in your favorite color".

What kicked off this trip down memory lane was this article, and accompanying picture in today's Mercury News, titled "Palo Alto's Casual Car Lot".

Over the last fifteen years, El Camino Drive in Palo Alto has become as familiar as the Big Apple to this New Yorker, having made innumerable business trips to Silicon Valley.

So I could totally visualize the scene described in the MercuryNews article:

"The half-mile stretch of El Camino Real between Embarcadero Road and Stanford Avenue is flourishing as a hub for Bay Area residents to buy and sell used cars. More than 50 vehicles with ``for sale'' signs lined the street one day last week -- from a 2000 Porsche Boxster for $26,400 to a 1996 Audi Turbo for $1,250 -- their owners drawn by the no-time-limit parking, prominent location and tales of quick sales."

It continues,

"Pockets of parked cars for sale are not uncommon in the Bay Area -- would-be sellers leave them along one stretch of Rengstorff Avenue in Mountain View, and on Monterey Road in San Jose. Few spots, however, match the size and diversity of El Camino.
Betty Kerns came from Los Altos Hills to park her 1995 Mitsubishi 3000GT there after hearing about the spot from friends. She also listed the car for free in a Pennysaver and on Fogster.com and paid $45 to put it on Autotrader.com, but she ended up receiving three times as many calls from window shoppers on El Camino.

Kerns also wrote ``Se habla Espanol'' on the sign in her window and was flooded with calls from Spanish-speaking buyers in Redwood City, one of whom ultimately purchased the car Tuesday. The appeal of El Camino for her eventual buyer, she said, was simple.

``He didn't know what kind of car he wanted,'' Kerns said. ``So doing an Internet search doesn't really work. He walked up and down the row of cars until he saw one he liked and could afford.''

The story goes on to explain how this casual car lot thrives despite city ordinances, and loss of sales tax to city coffers, and that in itself is a happy ending worth reading the entire story for...in fact it ends with this great line by the mayor of Palo Alto:

``It's the poor man's lot,'' said Mayor Jim Burch, who may not have spotted the BMWs and Porsches among the jalopies. ``It's part of what makes Palo Alto so charming.''

To me the story is a reminder that shopping is truly a universal, timeless human pleasure, for the rich, not-so-rich and the poor...and that we're all driven by an almost primal instinct to "hunt for a bargain".

What stopped me cold though in the story, was the last paragraph above. The would be customer above "didn't know what kind of car he wanted, so doing an Internet search didn't really work for him". Also, there was the likelihood that the buyer was less fluent in English than Spanish.

Kind of like my dad in the car souk (bazaar) in the desert...although he spoke passable self-taught Arabic as an Indian immigrant, he couldn't read and write the language as well.

Being a net-head for whom the Internet is sometimes the hammer for every nail, I got to thinking why, ten years after

the commercialization of the Internet,
the obvious success of used car sales online (11% of Internet users bought a used car online last year),
and eBay Motors becoming one of the top car "dealers" in the US with over $7.5 billion in gross auto sales last year,

there still may be areas of improvement to increase used car sales online, and maybe non-car merchandise as well.

My three quick questions following the article were, what is the state of the online retail experience today if:

you're not fluent in English.
you need to buy a car online on a budget.
want to browse quickly amongst lots of makes and types of vehicles, and then strike a great deal, impulsive or well-considered.

Obviously the roaring success of new and used car sales online and/or driven by websites means that some or all of these hurdles may be mere speed bumps, I was curious to see anecdotally how bumpy the speed bumps really were.

Having never bought a used car online, I went to see if even as someone relatively fluent in English, I could somewhat replicate the "casual car lot" experience online.

So I went to ebay Motors (and only eBay* since it's the biggest online car resource (there's even a eBay Motors book on Amazon), and this was to be a quick anecdotal experiment, not a full-fledged test of online resources.

Several observations from my half-hour experiment.

1. eBay is not a great and/or easy place to search for a used car IF YOU DON'T KNOW WHAT BRAND YOU WANT, but only know you can spend no more than a certain amount.

I may have missed something in the search options, but the only way to initiate a search seemed to be by brand. At best, you have a button that says "Used Cars", but then the system wants you to pick a brand.

There were options to pick by "Themes" like Collector cars, Corvettes and the like, but those were mostly convenient for buyers with a fair bit of discretionary cash.

The only way to get around this that I found was picking a range of model years for the cars you're interested in...I picked 1995 to 2005 for this experiment.

Also, since eBay allows both an auction and a quick "Buy It Now" Fixed price option, doing a ranking of brands by low to high price gives you a lot of vehicles with no useful price reference, as in this example. You see a lot of prices at one cent...which means a lot of scrolling...not as satisfying as surveying a vast car lot options, with price tags on them.

You could do your search by highest to Lowest miles, something not possible in an off-line car lot, but then you get a whole number of pages of cars with hundreds of thousands of miles, most of which are collectibles rather than practical, late-model used cars at a good price.

But most importantly, you couldn't say for instance, I want to spend no more than $10,000 for a used car and get a bunch of easy to sift through results.

I know there are other sites that do have this, but it'd be useful to have it at the "largest online used car dealer" in the US.

2. If you don't speak and/or read/write English fluently, there isn't a Spanish language option online. And eBay isn't the only online retailer that's missing this customer convenience...I couldn't find it at Amazon or most other online retailers in most product categories away from cars.

Which is surprising because most of the big ecommerce sites are already fluent in Spanish (see eBay Mexico here). They just haven't adapted it for the large and growing Spanish speaking market in the US.

It's interesting that off-line, many large US companies have focused on the Spanish speaking market off-line for a while, across many industries, including Wal-mart in many stores in Hispanic regions. It's not just eBay, it's interesting to note that Wal-mart also does not seem to offer a Spanish language option online.

In fact, as this article from MarketingProfs makes clear, Internet businesses in general, have been slow to offer non-English options online.

As online retailing enters its second commercial decade, and goes even more mainstream, there may be some large opportunities in what might mom would call the "thrifty" market, followed by the non-English speaking markets. Maybe even an eBay "Thrifty Car Mart".

Something we can readily see on El Camino Real between Embarcadero Road and Stanford Avenue.

Speaking broadly, the online retailing industry for the past decade has correctly chased the low-hanging fruit, partly because the self-selection of its market...online users in the beginning tended to be relatively more affluent than the general population.

But that is changing as the Internet is now increasingly a mainstream utility for the middle-class and beyond.

There's no question that opportunities for thrifty shoppers from every income bracket abound on the internet today, primarily in a "come and find it and don't forget to bag it" sort of way.

My point simply is that today's online retailers have not quite gotten around to MERCHANDISING directly to the thriftiness in all of us.

Some offline veteran merchants might go as far to say there's very little merchandising going on online at all...that it's mostly been an exercise of putting easy to use consumer front-ends around complex set of inventory databases, and tacking on the ubiquitous online shopping cart for their shoppers to tackle**.

That'd be a tad unfair given the amount of pioneering the online retailers have had to do so far, but now that it's done, new opportunities abound.

Some online vendors are starting to figure this out, with Priceline's recent subtly self-mocking "Shop and Compare" advertising campaign with William Shatner being an early example. As the CEO of Priceline, Jeffery Boyd proclaims, almost as a revelation:

"Online travel customers are shoppers by nature."

I mean after all, the biggest retailing US fortunes off-line were via the Woolworth five-and-dime strategy in the eighteen hundreds, and Wal-mart founder Sam Walton's low cost strategy in the last century.

The pioneering catalog sales genius of Sears in the 19th century led to the first physical stores in 1925 (32 years later), which then went on to make merchandising history, along with the likes of Macy's and later retail icons.

There's a lot to be learned still from off-line thrifty flea markets of all types for the relatively new online retailers, as they go onto become true Online Merchants.

*FULL DISCLOSURE: I was the lead research analyst for the eBay IPO in 1998.

**In my humble opinion, Amazon's has had the most innovations to improve the otherwise industry-wide, desultory shopping cart experience, with "1-Click" ordering a few years ago, and "Amazon Prime" a few months ago.