Mercator Blog

Mobile Innovation Drives eBay's Success
Date: January 31, 2014
Research Team

The National Retail Federation’s “Big Show,” NRF 103rd Annual Convention & Expo, in New York City January 12–15 was action packed, and many of the sessions were filled with valuable insights and recommendations for the future of retail commerce and payments. Below are highlights on two sessions that focused on best practices using emerging payments technology. See the previous Mercator Advisory Group Perspective on the themes of the NRF Convention & Expo.

Mobile Innovation as a Roadmap to Customer Success was an excellent session featuring a panel of key decision makers from eBay, Toys “R” Us, and FitForCommerce. The eBay representative talked about how important “Mobile” has become for eBay and its subsidiaries, especially PayPal. He offered some interesting facts on eBay:

  • eBay mobile sales will top $20 billion in 2014. In addition, PayPal will process $20 billion in mobile payments in 2014. 

  • One-third of all transactions at eBay are now via mobile. 

  • 79% of clients have expressed a desire for mobile coupons.
  • Digital services and tickets are the number 2 purchase on eBay, following clothing. 

  • eBay finds it has less than 6 seconds to convince customers to initiate a purchase before they lose interest and move on to using their smartphone for other purposes 

  • Adding the BUY IT NOW button at the bottom and top of the product view screen created a 30% jump in incremental sales. 

  • Cross-channel development is very important since engaging in one channel and continuing or finishing in another is very common these days, especially among the younger demographic. 

  • Consumers use smartphone differently from tablet. Smartphone interactions tend to be quick throughout the day, increasingly for product research and payments. Tablets are generally used in the evenings and weekends (albeit usage at work is also growing); the tablet’s richer imagery and responsive design lends it to browsing and buying. 

  • Tips to retailers for mobilizing their websites include rapid mobile site page load, high-quality graphics, no scrolling, easy checkout. Product search should be superb with same products online as in-store and with a QR/bar code reader. Checkout should be on product pages and should be easy with checkout button at both top and bottom of page, only limited data entry required, and payment services with stored credentials as well as guest checkout. 

  • Same-day delivery is key for success, and the practice will get more pronounced in 2014 and 2015. 

  • It is important for retailers to begin developing an omnichannel and digital strategy now since the technology development process is fairly complex and long. 

  • Mobile rewards to drive additional spend is also a key development requirement for all retailers. 

Beyond Borders: Lessons in Retail Expansion, a session on day 3 of the NRF show, offered valuable insights for global commerce. The speakers were executives from Deloitte, Claire’s, and Tom’s who discussed their experiences in developing a global market strategy and offered advice on how to approach and win in the global market. They noted that a “lift and shift” approach from domestic to global markets generally does not work. It is very important to develop a “glocal” strategy. This means that since consumer needs, shopping, regulations, and economic trends differ from region to region, strategy for each region of the world needs to be developed from a local perspective. Ensuring brand integrity is also crucial for success in the global markets.

The panelists recommended that retailers evaluate the competitive landscape, understand the local economic and regulatory situation, determine a market entry approach, and develop a digital strategy for global expansion. A good global expansion strategy by retailers or merchants would include determining growth objectives that depend on home market saturation, free cash flow to fund investment in the short and long term, scalable core capabilities, available management resources, determining risk tolerance, understanding consumer demand for their brand and sizing the growth rate of the market. The keys to success for a successful global strategy are as follows:

  • Do the research 

  • Think “glocal.” 

  • Blend expertise with brand experts. 

  • Stay flexible and nimble. 

  • Pick the right partners. 

  • Think digital AND physical. 

  • Expect the unexpected