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EBay CEO John Donahoe argues that success in a rapidly evolving retail industry will require retailers to serve consumers however they want to shop—and that collaboration between online and offline players will be a key to success.
The company that introduced millions of consumers to online shopping might be expected to trumpet the Internet as the single way forward for merchants. But that was not the message eBay Inc. CEO John Donahoe delivered today in a keynote address to the 10th annual Internet Retailer Conference & Exhibition in Chicago.
Instead, Donahoe argued that consumers today want to shop—and are shopping—in many ways. They might check an offer on a smartphone during a boring meeting, browse retail sites on a PC during a lull at work, stop into a store to see and feel an item, and browse and possibly buy on a tablet computer while watching TV at night.
Speaking to an audience of thousands of retailers and e-commerce industry executives, Donahoe said, “We think in channel terms. We use a merchant vocabulary. Consumers don’t care about channels. Consumers just want to shop.”
Donahoe, widely credited with revitalizing eBay since taking over as CEO in 2008 from Meg Whitman, went on to explain that a web-only company like eBay might not always be able to provide everything a shopper wants. With that in mind, he gave several examples of how eBay is partnering with bricks-and-mortar retailers to offer a level of convenience and service that an online-only retailer—such as eBay’s chief rival, Amazon.com Inc., which Donahoe never mentioned by name—cannot offer.
He pointed to a test eBay began last year in the United Kingdom where eBay sellers can offer online shoppers the option to pick up purchases at stores operated by Argos, a general merchandise retailer whose stores, Donahoe said, are within 20 minutes of the homes of 80% of the U.K.’s population.
In another example, eBay last year installed touchscreen displays on the store windows of three retailers in San Francisco’s Westfield Mall—Sony, Toms and Rebecca Minkof—enabling a shopper to select an item from one of those stores, and have information about the item sent to her mobile phone from where she can make a purchase.
Donahoe projected “we’ll see interesting combinations of online and offline to leverage the best of both to offer the consumer great service and choice.”
The eBay CEO put these developments in the context of a “commerce revolution” that he says is underway, a concept he noted he has been speaking about for a few years. Some things have changed faster than he expected, such as the speed at which consumers have made smartphones and tablets part of their lives.
Other things have moved more slowly than he anticipated, including changing the way consumers pay in stores. Though Donahoe did not mention this rollout in his talk, eBay’s PayPal unit has been promoting its previously online-only payment service for use in physical stores for at least three years, and 23 national merchants announced offering that option last year. But PayPal has been quiet about consumer adoption and transaction volume, and the service seems to be little used.
Donahoe observed that we’re still in the early days of the transformation of commerce, and particularly in using consumer data to better personalize shopping. “There’s a lot of experimentation going on, but no one has cracked the nut just yet of how you build a strong connection with consumers and provide the most personalized experience possible,” he said. “This will be one of the sources of competitive advantage and innovation over the next three to five years.”
Pointing to the dramatic upheaval in the media industry since the emergence of the Internet, Donahoe said that the lesson there is that the road to success is not based on a technology—print, web, mobile—but in making sure a consumer can get the information she wants in the way she wants it at any given time.
Donahoe said the same will be true in commerce and payment, two arenas that he projected will change more in the next three to five years than they have in the last two decades. Returning to his theme of collaboration between offline and offline players, Donahoe told IRCE attendees to “put the consumer in the middle. Look at everything through the consumer’s eye. Understand that the consumer like choice, and if you can’t offer that choice evaluate ways you can partner with others to offer that choice.”
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