Marketing
zykeria112
MKTG_CH06_se_cases1.pdf
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Case study
eBaY
Chapter 6
Creating Customers on the move
The advent of mobile commerce (m-commerce) has be- gun to create significant changes in the way consumers make purchasing decisions. The introduction of online shopping first began to draw customers away from brick- and-mortar retailers, changing the location of where they made their purchases. The use of mobile devices has ex- panded the location of purchase decisions even further, so now consumers can make purchases from almost any- where, so long as they have a mobile device with them. It also has leveled the playing field for consumers in many cases, as it allows them to comparison shop on prices of products that they might find in stores.
In 2009, the mobile commerce market generated $18.3 billion in total revenue. By 2015 it’s projected to reach over $119 billion. When it comes to m-commerce, eBay has jumped in with both feet. It is estimated to hold about 3.3 percent of m-commerce, compared to online retailer Amazon’s 1.5 percent. It also was estimated to sell $1.5 billion in goods via m-commerce in 2010, compared to $600 million in 2009. eBay launched its first mobile ap- plication for the iPhone in July 2008 and has since pro- duced 14 apps, including eBay Selling, StubHub, Deals, and Fashion. eBay’s core iPhone application has been downloaded 14 million times, and its entire stable of apps has seen over 30 million downloads worldwide. Purchases range from clothing and accessories to sporting event and concert tickets, computers and technology gadgets, col- lectables, and even luxury automobiles. Research indicates that more than half of regular m-commerce purchasers are comfortable spending over $100 on a mobile purchase, and 14 percent are willing to spend over $1,000.
eBay has been quick to embrace the trend toward comparison shopping, as potential buyers compare in- store prices online with those offered by other retailers. In June 2010, eBay purchased RedLaser, a mobile app that uses the cell phone camera to identify a product’s bar code and locate that product within eBay’s system.
If a buyer is searching for a certain designer jacket, for example, he could compare prices between eBay’s auc- 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, its ability to fully capitalize on this growth potential depends on how it is able to influence consumer purchasing deci- sions. Merely allowing consumers to search for items, com- pare prices, and then make a purchase isn’t enough. As eBay Vice President of mobile platforms Steve Yankovich says, “We want consumers to engage when they don’t have a purchase in mind.”
The combination of apps with mobile devices en- ables browsing and purchasing virtually anywhere at any time, especially during downtime—say when the poten- tial buyer is getting a haircut or waiting in line at the cof- fee shop. By enabling buyers more opportunities to shop and make purchases, eBay is hoping to spark purchases based on the buyer’s immediate situation. The eBay Fashion app is designed to inspire browsing and experi- mentation, offering features such as a clothing-focused search function, a virtual closet to save various finds, and a mix-and-match feature that allows users to pair up ar- ticles of clothing with various accessories. Users can even take a picture of themselves using the phone camera and the Fashion app will superimpose the outfits they cre- ate over their figure, allowing shoppers to digitally “try on” the looks. So if a purchaser saw a dress she liked at a party, she could “try it on” and match it up with acces- sories in her wardrobe. eBay is planning to release even more apps like eBay Fashion, targeting key eBay shop- ping demographics such as car enthusiasts and home- and-garden enthusiasts.
Early trends suggest that shoppers are responding to eBay’s efforts as well. As eBay has continued to develop the offerings of the eBay Fashion app, average user browsing
CASE STUDIES 1
time on the app has increased by 40 percent since its original release and mobile fashion sales tripled over the past year. If nothing else, the new trends in m-commerce move very quickly, and eBay must continue to innovate if it wants to stay ahead of the game. Says Yankovich, “Nobody knows what’s going to happen in mobile. We need to be ready to spin on a dime.”
Sources: Miguel Bustillo and Ann Zimmerman, “Phone-Wielding Shoppers Strike Fear into Retailers,” Wall Street Journal, December 15, 2010, http://online.wsj.com/article/SB100014240527487046940045760196917 69574496.html (Accessed November 8, 2012); Geoffrey Fowler and Ray Smith, “eBay Adds ‘Flash’ Fashion,” Wall Street Journal, March 29, 2010, http://online.wsj.com/article/SB100014240527023044344045751496717555 88744.html (Accessed November 8, 2012); Dan Macsai, “eBay Dials M for Makeover,” Fast Company, December 2010/January 2011, 42–44; “From the Winter Olympics to Designer Handbags and Sports Cars, M-Commerce Leader eBay Shares Global Mobile Shopping Moments for 2010,” BusinessWire.com, December 29, 2010, www.businesswire.com/news/home/20101229005467/en/Winter-olympics-Designer-Handbags-Sports -cars-M-commerce (Accessed November 8, 2012); “eBay Mobile Commerce Trends,” Online Marketing Trends, February 5, 2011, www.onlinemarketing-trends.com/2011/02/ebay-mobile-commerce-trends .html (Accessed November 8, 2012); Douglas MacMillan and Joseph Galante, “As Mobile Shopping Takes Off, eBay Is an Early Winner,” Bloomberg Businessweek, June 23, 2010, www.businessweek.com/magazine /content/10_27/b4185027420770.htm (Accessed November 8, 2012).
Q u e s t i o n s 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?
