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.

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.

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