eBay Hustles to Reach More Customers on the Same Day
Jul 23, 2013 5:00 AM PT
eBay revealed Monday that it has made its mobile-focused eBay Now service accessible via the desktop and expanded its same-day delivery service areas, as the competition among online retailers intensifies.
The company first tested same-day delivery in San Francisco about a year ago. Later it rolled out the service in San Jose and New York. eBay's expansion will continue into the Bay Area, Brooklyn and Queens, as well as Chicago and Dallas later in the summer.
eBay shoppers can access eBay Now from the desktop and order items from the company's retail partners, including Target and Best Buy, during normal store hours. For a US$5 fee, eBay said the products should be delivered in about an hour. Shoppers must spend $25 or more on their order to be eligible for the service.
The eBay Now and same-day shipping changes were effective Monday.
eBay is also adding an in-store pick-up option to be launched later this year.
Not a Game Changer
eBay is not the only etailer ramping up its same-day delivery options. Amazon is experimenting with its AmazonFresh service, which makes speedy deliveries of groceries and other Amazon products -- electronics, toys, books, etc. -- to customers in the Seattle area. Walmart is testing similar services with its Walmart to Go program.
Online shoppers are drawn to the promise of faster shipments, said e-commerce consultant Rob Abdul, but same-day service is unlikely to be a deal breaker for most of them.
"Consumers are much more interested in free delivery and lower prices than in the same-day delivery of goods," he told the E-Commerce Times.
That means that even if certain retailers aren't able to match Amazon, Walmart or eBay's infrastructure in terms of same-day delivery capabilities, they might be able to offer their own competitive advantage that could impact a larger share of buyers, Abdul noted.
"This is a premium service with a price tag," he pointed out. "Other retailers that cannot compete with the same-day delivery may counter this by dropping or cutting delivery prices on items or existing delivery times. That will have a much greater impact on the market, as opposed to the small market that the same-day delivery is available to."
To truly challenge Amazon's online retail dominance, eBay needs to do more than guarantee same-day delivery in a few select areas, said Trip Chowdhry, senior analyst for Global Equities Research.
"The biggest mistake eBay can do is to simply copy what other people are doing," he told the E-Commerce Times. "eBay's current business is a cash flow business, but it's slow and declining. It needs to get into same-day delivery, but it can't count on that. More importantly, it needs to be able to offer some kind of product or offer, maybe through same-day delivery, that no one else can."
One area where it does have an edge is mobile, said Chowdhry. With consumers increasingly turning toward smartphones and tablets to purchase goods, eBay's investments in that area have paid off. Its mobile business attracted 3 million new customers in the latest quarter and enjoyed 90 percent growth.
eBay's mobile operations are key to the company's growth, said Chowdhry.
"eBay has invested a lot in mobile, but it needs to put more efforts into mobile payments and expanding its mobile platform and delivery options," he added. "They have to do same-day delivery -- but to think it's a game changer? Probably not."