EBay is finding that its investments in artificial intelligence (AI) are leading to happier customers.
On Tuesday (Nov 7), the company revealed during its latest earnings call that its investments in AI have enhanced the way customers perceive its shipping capabilities.
“In Q4 we deployed a new machine learning model for estimated delivery date from the U.S. and select international markets, enabling us to make more accurate delivery productions to buyers,” said Jamie Iannone, CEO of eBay.
This implementation has allowed eBay to provide more precise delivery estimates to its buyers. In the United States, this model led to a reduction of about 1½ days in the average delivery estimate for all domestic listings.
A reason for this is transparency, as when customers receive clear information regarding when their products will arrive, it fosters trust and reduced anxiety. Moreover, having access to dependable delivery details reduces the likelihood of customers contacting customer support to inquire about their order status.
Furthermore, eBay also deployed a model for eligible authenticity guarantee products, which brought about an average reduction of about two days for U.S. listings.
Among eBay’s other AI advancements, one is the incorporation of an image-based listing tool.
Reported in September by PYMNTS, this tool enables sellers to capture or upload a photo through the eBay app. AI automatically fills in item information details. With only a single photo, AI can create titles, descriptions, and information including product release dates, categories, sub-categories, listing prices, and shipping costs.
The image-based listing tool has already undergone an employee beta release, and there are intentions to roll it out to the public in the upcoming months.
Per PYMNTS, this image-based listing tool tackles the initial hurdles encountered by novice sellers, streamlining the considerable amount of data necessary for creating a competitive listing. EBay has noted that its AI technology offers a more streamlined method for sellers to furnish comprehensive information.
In the past, there existed a compromise between offering detailed and precise listings and simplifying and expediting the listing creation process for sellers. AI’s involvement enables eBay to attain both goals.
EBay reported revenue of $2.5 billion, showing a 5% increase on both an as-reported basis and a foreign exchange (FX) neutral basis. The gross merchandise volume (GMV) stood at $18 billion, reflecting a 2% growth on an as-reported basis and remaining relatively stable on an FX-neutral basis.
Regarding financial performance, eBay achieved a GAAP net income from continuing operations of $1.3 billion, equivalent to $2.46 per diluted share. Non-GAAP net income from continuing operations was reported at $545 million, or $1.03 per diluted share. The company’s operating margin was 18.2% on a GAAP basis and 26.4% on a non-GAAP basis.
EBay demonstrated a strong cash flow position, generating $862 million of operating cash flow and $777 million of free cash flow from continuing operations. Shareholders benefited from a total return of $783 million, which included $651 million allocated for share repurchases and $132 million distributed in the form of cash dividends.