A Commerce Revolution
Having recently returned from the Internet Retailer Conference and Exhibition (IRCE) in Chicago earlier this month, I'm left with one overriding thought: we're in the midst of a commerce revolution. This point was made clear by John Donahoe, CEO and president of eBay, in his keynote presentation at the event.
What's driving this revolution is technology, and more specifically, mobile.
"Innovation is blurring the lines between online and offline," Donahoe said, and mobile is at the forefront. Consumers don't care where they interact with your brand, be it a physical storefront, mobile app, e- commerce site, etc.; they simply want a seamless shopping experience regardless of channel. Donahoe predicted that we'll see more change in the way consumers shop in the next 3 to 5 years than we've seen in the last 20 years.
4 Competitive Battlefields
Donahoe identified four competitive battlefields for today's retailers:
eBay's own research has revealed consumers' mobile behavior differs by time of day. For example, smartphone users are shopping all day, but average less than two minutes per session - eBay refers to this as "snacking."
Tablet usage spikes in the evening when consumers are home from work. Consumers are more likely to use their smartphone for browsing and product research, while tablets generate a higher percentage of conversions.
As for local, Donahoe cited a telling statistic: 80% of commerce happens within 15 miles of a consumer's home. With this in mind, eBay has rolled out new programs for customers such as same-day delivery (eBay Now) and buy online, pick up in-store. eBay has partnered with national retail chains, including Target, Macy's, Home Depot and Best Buy, to make same-day delivery a reality. In addition, smaller local merchants selling on the auction site can now offer buy online, pick up in-store service.
eBay offers merchants of all sizes the opportunity to sell and compete in a global marketplace, Donahoe said. He cited BHFO, a Cedar Rapids, Iowa-based retailer of discount women's and men's fashion apparel, as a prime example. Thirty percent of BHFO's sales on eBay are to consumers outside of the United States.
"Data is a tool that enables retailers to engage consumers when, where and how they want," Donahoe said. He noted that eBay shoppers can now customize the product feeds they see from the retailer, giving them more relevant product recommendations.
The strategy is working.
Consumers who customize their product feed on eBay purchase 22% more frequently than consumers who don't.
4 Themes of the Commerce Revolution
Donahoe offered four trends that retailers need to be aware of as the commerce revolution takes shape:
- Consumer in: Merchants tend to get caught up in channels and "merchant speak," Donahoe said. The reality is that consumers don't care; they just want to shop. It's the retailer's job to think through the eyes of their customer and make the shopping experience for them as easy as possible.
- Consumer choice: Give consumers choices for how they can purchase from your brand. Programs such as buy online, pick up in-store; buy in-store, ship to home; and same-day delivery are just some of the ways to accomplish this.
- Consumer service: In the early days of e-commerce, customer service was "self-help," Donahoe recalled. Today's consumers love the value and selection they can get shopping online, but they want the service component as well.
Take product returns, for example. Nearly 25% of all online purchases are returned. Make it easy for customers by allowing them to return online purchases in-store, and vice versa. Seek online/offline partnerships to improve the quality of service you offer to customers, Donahoe advised.
"You need to have a service offering that goes beyond just low prices to be a winner in today's competitive retail environment," he added.
- Consumer personalization: Retailers have an enormous amount of consumer data at their disposal. Yet while a lot of companies talk about personalization, no one has cracked the nut on providing consumers the best experience possible, said Donahoe. The wisdom of the crowd - i.e., recommending the best-selling product on your website today - isn't true personalization. The best thing about personalization is that the size of your company doesn't matter, Donahoe added. Everyone has the same opportunity to leverage its data to provide the best consumer experience possible.
Donahoe wrapped up his presentation by telling the thousands of retailers in attendance that they shouldn't view eBay as a competitor, but rather as a partner. "We're a technology company, not a retailer," he said. "We will never compete with you."
Furthermore, Donahoe advised that instead of focusing on online, offline or mobile, companies that put consumers in the middle of everything they do and embrace the four themes mentioned above will be winners in this commerce revolution.