Case Study

eBaY

Creating Customerson themove

The adventofmobile commerce (m-commerce) hasbe-guntocreate significant changesinthe way consumersmakepurchasing decisions.Theintroductionofonline shopping first began to draw customers away from brick-and-mortar retailers, changing the location of wheretheymade their purchases. The useofmobile devices hasex-pandedthelocationofpurchase decisions even further, so now consumers can make purchases from almostany-where, so long as they haveamobile device with them. It also has leveled the playing field for consumersinmany cases,as itallows themtocomparison shoponpricesofproducts that they might find in stores.

In2009, themobile commerce market generated $18.3 billionintotal revenue.By2015 it's projectedtoreach over $119 billion. Whenitcomestom-commerce, eBay has jumped in with both feet. Itisestimated to hold about3.3percentofm-commerce, comparedtoonline retailer Amazon's 1.5 percent. It also was estimated tosell$1.5 billioningoods via m-commercein2010, compared to $600 million in 2009. eBay launched its first mobileap-plication fortheiPhoneinJuly 2008 and has sincepro-duced14apps, including eBay Selling, StubHub, Deals,andFashion. eBay'scoreiPhone applicationhas beendownloaded 14 million times, and its entire stable ofappshas seen over 30 million downloads worldwide. Purchases range from clothing and accessories to sporting eventandconcert tickets, computers and technology gadgets,col-lectables, and even luxury automobiles. Research indicates that more than half of regular m-commerce purchasersarecomfortable spending over $100on amobile purchase, and 14 percent are willing to spend over$1,000.

eBayhasbeen quicktoembracethetrend toward comparison shopping,aspotential buyers comparein-store prices online with those offered by other retailers. In June 2010, eBay purchased RedLaser,amobile appthatuses the cell phone camera to identify a product's barcodeand locate that product within eBay'ssystem.

Ifabuyer is searching foracertain designer jacket, for example,hecould compare prices between eBay'sauc-tions, flat-priced buy-it-now options, and eBay's Fashion Vault, which offers limited-time deep discounts on select high-end merchandise.

But while eBay has excelled in m-commerce so far,itsability to fully capitalize on this growth potential depends on howit isable to influence consumer purchasingdeci-sions. Merely allowing consumers to search for items,com-pare prices, and then makeapurchase isn't enough.AseBay Vice Presidentofmobile platforms Steve Yankovich says, "Wewantconsumerstoengage whentheydon'thaveapurchase in mind."

Thecombinationofapps with mobile devicesen-ables browsing and purchasing virtually anywhere atanytime, especially during downtimesay when the poten-tial buyer is gettingahaircut or waiting in line at thecof-fee shop. By enabling buyers more opportunities toshopand make purchases, eBayishopingtospark purchasesbased on thebuyer's immediate situation.The eBayFashion appisdesignedtoinspire browsing and experi-mentation, offering features suchas aclothing-focused search function,avirtual closet to save various finds,and amix-and-match feature that allows userstopair upar-ticles of clothing with various accessories. Users caneventake a picture of themselves using the phone cameraand theFashionapp willsuperimposetheoutfits theycre- ateover their figure, allowing shopperstodigitally "try on" the looks.Soifapurchaser sawadress she likedat aparty, she could "tryiton" and matchitup with acces-soriesinher wardrobe. eBayisplanningtoreleaseevenmore apps like eBay Fashion, targeting key eBayshop-ping demographics suchas carenthusiasts andhome-and-garden enthusiasts.

Early trends suggest that shoppers are respondingtoeBay's efforts as well. As eBay has continued to developtheofferings of the eBay Fashion app, average user browsing

time on the app hasincreasedby 40percent sinceitsoriginal release and mobile fashion sales tripled overthepast year. If nothing else, the new trendsinm-commerce move very quickly, and eBay must continue to innovate ifitwants to stay ahead of the game. Says Yankovich, "Nobody knows what's goingtohappeninmobile. We needto beready to spin onadime."

Questions

1. Which stages of the consumer decision-making process are affected most by comparison shopping on mobile platforms? Explain.

2. Based on the goal expressed by Steve Yancovich, which stage of the consumer decision-making process is eBay trying to influence? How are they doing so?