EBay says in-store pickup gains traction faster than same-day delivery
EBay is doubling down on its shop-anywhere Click & Collect service in Britain because of how quickly it is gaining traction but says that same-day delivery service eBay Now is not experiencing the same level of enthusiasm.
During a conference call with analysts this week to discuss eBay’s second quarter results, executives said that while mobile’s influence at the point of sale happening more slowly than online, buy online and pick-up in-store is one area showing strong potential. Executives also pointed to a planned test later this year for mobile advertising on its auction marketplace and the fact that more PayPal mobile payments now take place off eBay than on it.
“And so an example, let’s say, in the marketplace where we are seeing a lot of traction in the U.K. around Click & Collect or buy online pickup in store,” said John J. Donahoe, president, CEO and director of eBay Inc., San Jose, CA. “So you see us doubling down on that.
“As were the same day delivery like eBay Now, we see good consumer demand for that, but it’s not – it doesn’t have quite the same electric traction that Click & Collect does,” he said. “So we’re continuing to move in the general space.
“We think there’s a lot of opportunity, but we just shift our investment toward the things that have traction, and we’re keeping a more test and learn steady pace on the ones that don’t.”
Click & Collect
EBay recently said it would extend the Click & Collect services offered via Argos stores in Britain to approximately 650 locations from the 150 trial locations announced last year. Approximately 65,000 eBay sellers are expected to offer items for collection at Argos by the end of the year.
To use the free service, shoppers choose “Click and Collect at Argos” as the delivery option and then receive a message when their item is available for pick up at a dedicated collection point in their selected store.
The strategy points to how consumers increasingly want to be able to shop anytime on any device.
EBay reported that during the second quarter, mobile attracted 6.6 million new buyers. The company said its total mobile volume grew 68 percent during the period, reaching $12.3 billion and representing 20 percent of volume.
Additionally, eBay’s apps reached 260 million downloads.
EBay’s Mr. Donahoe also pointed to how 60 percent of shoppers are using multiple screens and eBay’s efforts to address this trend by bringing together its mobile experiences to create a core and seamless experience.
“EBay is addressing a trend that is emerging as a very important one for retailers to understand,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston. “At Unbound Commerce we call this ‘mobile influenced’ purchases.
“Seamlessly connecting the omnichannel experience, across different devices, is extremely important,” he said. “It is equally important to be able to measure these sorts of purchases.
“While the initial experience might start on a desktop computer, an eBay shopper might check on prices and bids throughout the day on their mobile phone, and then finish the transaction in front of the television on a tablet. If 60 percent of eBay shoppers do this, then it is no wonder this is a high priority for eBay, and all retailers should pay attention.”
With revenue in its core Marketplaces businesses hurting, eBay is looking at mobile advertising as one possible solution.
To date, the eBay mobile offerings have had no or very few ads on mobile.
This will change starting in the third and fourth quarters when the company will begin testing adding more ads.
The challenge for eBay will be in delivering ads in such a way that they do not hurt the user experience.
“One of the implications of this mix shift to more mobile is we’ve made a decision on mobile to have no or very lows ads to date,” eBay’s Mr. Donahoe said during the conference call. “We think that’s been essential to our frictionless mobile experience that’s helped drive our mobile volumes, but has lower overall monetization.
“We’ll begin to – on mobile now, there is some, I think, tasteful ways to begin to add some ads into a mobile experience that doesn’t detract and we’ll be experimenting with those in Q3 and Q4,” he said.
EBay also reported that PayPal’s mobile volume away off the eBay platform now surpasses its mobile volume on eBay.
Mr. Donahoe said that the company sees real traction in how consumers are using their mobile devices more than ever before, which is why eBay acquired payments company Braintree, which inserts PayPal into the growing sharing economy via apps such as Uber and Airbnb and is prioritizing certain PayPal in-store experiences such as order ahead and order from the table.
However, PayPal’s mobile growth is likely occurring more online than in-store.
“It’s not surprising that mobile volumes are growing, considering that consumers are increasingly using their handheld devices as their primary computers,” said Nathalie Reinelt, analyst at Aite Group, Boston.
“However, I don’t believe that this data is significant at all when it comes to mobile payments at the point of sale,” she said “While consumers are very comfortable transacting online via their mobile phones, they still do not have sufficient incentive to use their mobile devices at physical merchants, particularly when it is rather hit-or-miss as to which merchants are participating in any of the available mPOS platforms – PayPal, Google Wallet, ISIS, etc.”
Chantal Tode is senior editor on Mobile Commerce Daily, New York