November 3, 2011, 3:22 PM

Smartphones blur the line between stores and e-commerce, eBay CEO says

John Donahoe says the changing face of retail is changing eBay.

Kevin Woodward

Senior Editor

Lead Photo

John Donahoe, president and CEO, eBay Inc.

Changing consumer behavior will drive more change in retailing over the next three to five years than has occurred in the past 20 years combined, predicted eBay Inc. president and CEO John Donahoe in an address today at the Open Mobile Summit in San Francisco.

“What’s happened over the last 12 to18 months is the blurring of the lines between e-commerce, m-commerce and retail,” he said. “Retail and e-commerce are becoming one. Consumers don’t make a distinction between the two.” Donahoe pinpoints the emergence of smartphones and how consumers use them for shopping as a primary factor in this blurring.

This has changed eBay’s direction, he said. Led by its PayPal payment brand, eBay is working on services that could display a retailer’s product availability in local search results, and enable a consumer to buy a product via her PayPal account either on the phone or in a store. It has set up a storefront in New York City to demonstrate these technologies.

“This is being consumer-led, technology-enabled, and will create winners and losers,” Donahoe said. In almost half of retail transactions last year consumers accessed the web at some point in their shopping experience, either researching items or figuring out where they want to buy, Donahoe said, citing Forrester Research’s “U.S. Online Retail Forecast 2009-2014.”

“The mobile phone blurring the line between online and offline commerce has profound implications for retailers and merchants around the world,” Donahoe said. If consumers are starting their shopping on mobile devices, retailers should have a mobile presence, he says.

EBay views mobile devices as just another way to access the web, Donahoe explained: “It’s a tool in the consumer’s hands.” Just how powerful is it? This year, eBay will sell more than $5 billion in goods to consumers using mobile phones and tablets, he says, and PayPal will process more than $3.5 billion in payments via mobile devices.

Updated this week, RedLaser, eBay’s bar code scanning app, is a vital part of eBay’s strategy, Donahoe said.

When consumers scan a bar code with RedLaser, search results include local stores and e-retailers, such as Inc., in addition to eBay’s selections. While it might appear contrary to include search results from competitors, Donahoe said consumers quickly left the app when shown only eBay results.

His suggestion for retailers pondering how retail might change in the next few years is to consider how Apple Inc.’s iPad has changed consumer habits. Consumers use the device for reading, watching videos and playing games, among other things. They are consuming content differently than they did before the iPad came along , he said. Consumers will echo that behavior as they shop, he said. They will want to have access to stores and brands without having to think about which device to use.

Comments | 2 Responses

  • I'm telling you from experience : It's cheaper just to use cash. If we buy online, it's cheaper just to use a credit card because the cost of an iPhone and monthly service is rediculous compared to super dependable landline. And living a "Gadget Free" lifestyle is now a point of pride. WANT TO MAKE BIG MONEY ? The first people investing in LOCAL entertainment venues will laugh all the way to the bank. EXAMPLE : People like the Social Experience. Gas for the car is really expensive. Every Town - Big and Small - will have an " Entertainment Village " with central ground - level parking. Small LOCAL MOVIE THEATERS will re-emerge. GAME ARCADES will take center stage once again. RETRO GAMES will be the Crown Jewel. Big Malls are falling out of favor. A) it isn't healthy to breath "Public Air". B) It's an Impersonal experience. C) Nobody wants to walk "Ten Miles" to get to where they want to go. The " Food Court " concept will reside in a separate building. I've been on the LEADING EDGE of innovation for over 30 years. I'm never wrong.

  • Shoppers today are juggling between convenience, speed and price, and whichever is most important to them will dictate how they do their shopping – online or in-store. Donahoe’s right to say that retailers should face up to this new reality. In the battle between ‘bricks’ and ‘clicks’ it is the smartest company that will win, and that will be the company with the most customer information. eRetailers have been very good at this and high street shops need to take action if they’re to stay competitive in the face of mobile and social shopping. Phil Stewart Director, Customer Service, Virgin Media Business

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