eBay Innovation

ebay eBay is making a comeback by transforming itself into every retailer’s best defense against Amazon, reports JP Mangalindan in Fortune (2/23/13). Not long ago, eBay was itself a victim of Amazon, which, among other things, launched Amazon Auctions, an eBay knockoff. But it was “Amazon’s insatiable desire to dominate all of retailing” that “proved to be an opportunity for eBay — a chance for the platform to become sort of a Switzerland of e-commerce, helping retailers fend off a common foe.” As eBay’s Devin Wenig says, “eBay wants to partner with the market sellers of the world, not put them out of business.”

The new eBay model is “a full-service e-commerce operation that helps big retailers such as Home Depot, Macy’s, and hundreds of others navigate the complex world of mobile payments, online comparison shopping, and same-day delivery.” eBay’s PayPal, the payments service it acquired in 2002, can now be used “at any brick-and-mortar location that accepts the Discover card,” which “pushes PayPal into stores … as consumers become more comfortable using their phones to pay for items and transfer money.”

PayPal is central to CEO John Donahoe’s big bet “that smartphones would transform the shopping and paying experience for consumers.” His plan also includes a suite of apps including Zong and RedLaser, designed “to help retailers close sales with customers — no matter how they choose to browse, buy and pay.” Today, eBay’s legacy business, auctions, accounts for less than ten percent of its business. Bill McComb of upscale retailer Fifth & Pacific, which is making good use of eBay’s “smart portfolio that enables his brands to reach online shoppers quickly and easily,” suggests that Amazon could assemble similar tools. “But they’ll never do that,” he says.

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