EcommerceBytes Contributing Editor Greg Holden covered today's keynote by eBay CEO John Donahoe at the 2014 Internet Retailer Conference on Wednesday morning. Greg and I are covering the conference here in Chicago.
I ran into John before the keynote - he reminded me he grew up in the Chicago area. I asked if he could speak about the new seller defect rates going into effect in August, and about the departure of David Marcus, who is stepping down as President of PayPal and joining Facebook.
John's handler said he's not doing media interviews today (I told John I'd love to interview him by phone at some point after the conference). He did say that consumer expectations continue to rise, the reason behind Seller Releases. He wasn't sure there would be a Seller Release in July, and said eBay tries to group the changes together as much as possible.
It was a disappointment that John didn't take questions, but one could certainly see there are lots of questions he would not have wanted to be asked, from eBay's recent security breach, to losing the president of its PayPal payments unit, and of course, the impact of Google's manual action on eBay exposure in search.
Now on to Greg's coverage of John's keynote address to online retailers, in which he said eBay enabled $212 billion of commerce in 2013, and talked about a "Commerce Revolution."
What I want to talk about is the commerce revolution that we're right in the midst of. I think we're in the early days of this. I believe we're going to see more change in how consumers shop and pay over the next 3 to 5 years than we have seen over the last 20 years.
You may say that's a bold statement. Analogy: the media world. (Asks how many use ipads and tablets. Many hands. Five years ago I never thought I would give up my physical newspapers or magazines, but now, I want my information where I want it and how I want it. It transforms consumer behavior. Tech enabled it, it put the consumer in charge.
Not all the incumbents were losers. Some new startups won, some lost. What's happened in the media industry is now beginning to happen in the world of commerce and payments. In this case the technology is mobile payments and smartphones. It's blurring the lines between ecommerce and retail. In the world of today, the consumer wants a seamless experience. In over 60 percent of transactions that closed in a retail store last year, the consumer accessed the web at some point during the shopping experience. The connected consumer is clearly in charge during this commerce revolution.
I want to share our experience at eBay. Our company is blessed to be at the epicenter of what is going on. Magento, etc.: those platforms enabled $212 billion of commerce last year.
Here is what we're seeing. We talk about 4 competitive battlefields: mobile, global local, data.
Mobile: increasingly we are using multiple screens when we shop. The ability to connect with consumers through multiple screens is essential. Data about how consumers are shopping during the day
(Shows chart) Green line: behavior at work. Look at red line: the smartphone. Consumers through the day are checking their smartphones and shopping. In over half those sessions less than 2 minutes per session: we call it snacking. Throughout the day.
Blue line: tablets. At home at night, consumers are buying on their tablets. Whether in front of TV or lying in bed. Consumers will often access several different devices during the day. We have to provide seamless experience.
Local: 80 percent of ecommerce happens within 15 miles of consumer's house. Every morning I walk into Starbucks. Smartphone in pocket. I don't take it out. At barista, that person sees my picture on sales system. Hey John, would you like the usual? He or she hands it to me, she presses a button, I walk out, I get a text saying I've paid. I get personalized service. Paying was taken out of the equation. Technology is offering a chance to reimagine the experience or local consumers and local retailers.
Global: Tech is also enabling global commerce. Gives merchants of all sizes greater opportunity. BHFO, Cedar Rapids, 2003. Sell fashion design apparel in eBay. 30% sold to consumers outside the U.S. Jack Sheng, here, one of the original eBay sellers, built a global business. eBay allows businesses to reach consumers all over the world.
Data: How merchants can engage those consumers where they want and how they want. Think about the personalization. Lot of talk about it. But still in early days. Wisdom of crowds information: people who bought this tend to buy this. Recently a lot of effort in curation. Curated content. Now you can customize the eBay feed. The things you are interested in that is relevant to you. Noteworthy; consumers that engage with this buy 22 percent more. The more personal you make it, the more consumers tend to buy.
Mobile is creating a whole new set of companies shaping experiences. What's gone slower is how consumer behavior occurs inside a physical store. It's still likely to change, but it will take more time.
As we look at our experience I want to suggest four themes that suggest how this commerce rev is occurring:
1. Consumer In. Many of us were merchants. We talk about "omni channel, multi channel." We talk in merchant terms. We were really interested in why some consumers were using smartphones while others use laptop. Did consumer research. We asked. "I don't know, I was just shopping." We think in merchant terms, but consumers just want to shop. They don't think in channel terms. How do we think through the eyes of the consumer ad provide seamless experience? Our job to make it easy as possible for them.
2. Consumer Choice. We want to see buyers who buy online and have it shipped home. Or pick up in store. Or have it delivered today. eBay Now. Offline buyers. Trying to understand, who are these buyers? They are the same buyer, the same consumer. Argos, in UK. Online retailers are looking for ways to connect with consumers through mobile tech. Storefront - touchscreen technology to buy something in store.
3. Consumer Service. Early days, it was self-help. Then offline, you get service. But consumers love the value and selection they get online but they love the service offline. They often want and need help and want to get that resolved, often by a human being. Consumers like returns. 25% get returned in one form or another. Growing trend to return to a physical location. Being able to have a service offering that goes beyond just good prices is a winner. We are seeing online partnering with offline company to provide great service.
4. Personalization. You have an enormous data about your consumers. We are still in early days about how we leverage that data. Wisdom of crowds: most popular item selling today, etc. That is not yet true personalization. There is a lot of experimentation and no one has cracked the nut about how to provide consumers with the best experience possible. This is going to be one of the biggest sources of innovation over the next 3 to 5 years. Good thing about personalization is it doesn't matter if you are a big company or small one. You build relationships leveraging data.
These are insights we are seeing. Commercial for eBay: we will partner with you.
We're in the midst of a commerce revolution. I would argue we are still in the early days of this commerce revolution.
I wouldn't believe the conventional wisdoms you read in the media that "Offline is dead. Mobile is the only thing." I assert over next 3 to 5 there will be opportunitiess for multiple winners and users. Some offline retailers will deliver great online experiences. There will be online companies that thrive, and others that struggle. Some mobile commerce companies some will be winners and some won't.
Here is the lesson from the media revolution: instead of focusing whether you are online, mobile, or offline, the winners will be the one that put consumers in the middle. Not always easy to do. Looking at everything through consumers eyes, understanding that they like choice, and if you can't provide it, partner with others to provide it. Service. and Leveraging your data to provide stronger relationships. Those who can embrace those four themes will be the difference between winners and losers in this revolution.
About the Author
Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires, both published by Osborne-McGraw Hill. Find out more on Greg's website, GregHolden.com, which includes his blog, a list of his books, and his fiction and biographical writing.