Mobile May Give eBay a Second Chance with Skeptical Shoppers
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In repositioning to add more functions such as fixed price selling and mobile phone-based purchasing, eBay (EBAY) has the opportunity to position itself as an alternative form of e-commerce, taking on not any other single online retailer but the entirety of web-based commerce, with mobile being a potential ticket to success.
John Donahoe, eBay's CEO, may not agree with the interpretation. He said in the company's second quarter conference call that mobile commerce was functioning more as a way for existing computer-based customers to, for example, check on marketplace bidding when online at Starbucks. However, if eBay makes an effort to draw consumers as they begin learning about cell phone-based shopping, the company has an opportunity to reach people that have bypassed it by online.
Many consumers continue to associate eBay with bidding approach that they already have rejected, and they may not realize the extent of fixed-price product availability the retailer offers today. If it can get those consumers to give it a second look through expanding mobile commerce initiatives, eBay can introduce them to the expanded range of purchasing options it now offers. Mobile commerce is new to just about everyone and consumers exploring it should be open to considering -- and reconsidering -- those retailers who make it easy to use.
To do just that, eBay company has been expanding its PayPal service in the mobile space. So, the company is providing a payment option to consumers, one that has required it to delve deeply into the requisite technology. As a result, eBay has been acquiring depth of understanding about how mobile commerce works technically that few other retailers can match. Yet, it also is acquiring a comprehensive experience of how consumers are responding to mobile commerce because it works with a wide range of merchants who use its PayPal service. The knowledge gained certainly should give it a leg up in using mobile commerce to promote eBay to cell phone purchasers.
In the second quarter of this year, eBay introduced Mobile Express Checkout, a PayPal improvement. The company developed Mobile Express to boost the PayPal popularity by making it as easy to use via cell phone as it is on the Internet. Donahoe said in the quarterly conference call that more than 2.5 million people have downloaded a PayPal mobile app. He noted that PayPal generated nearly twice the mobile payment volume in the first six months of this year than it did for all of 2009.
After Mobile Express, the company unleashed a bar code scanning function that will encourage mobile phone users to compare prices in stores with those available online, especially eBay. And, in another effort to win over consumers, the company introduced the eBay Fashion ap for iPhones. In addition to browsing and purchasing products, including those at fixed prices, the app allows consumers to virtually try on apparel and share what they're buying with friends on social media sites. Mobile sharing could entice social media "friends" to give eBay a second look.
It's not that eBay has given up on its bidding marketplace. The company has instituted changes in technology and fees to make it easier to use and more price competitive. Yet, that is most likely to deepen its relationship with current users rather than draw shoppers who've resisted bidding's allure in the past. If the company can get consumers to check out its other functions as they experiment with mobile commerce, eBay can win over shoppers who may have become convinced that bidding is not for them.