eBay Now has got us excited

  • John
  • Blogs
  • 6 August 2012
  • 1 Comment

Last night we read about eBay Now — and today we can’t stop talking about it in the office. We think it’s one of the most exciting pieces of marketing and commercial news we’ve read about in a long time. It brings together a lot of trends and ideas that individually seem exciting, but together are truly disruptive.

In short, eBay Now lets you buy any item from a local store (small independent, or big chain like Best Buy) and have it delivered the same day. You pay the delivery driver for the product at your door using a Paypal-powered app. There’s a charge for the delivery service, but eBay is waiving that during its current US trial, and in any case the fee is minor considering the convenience factor of same-day delivery.

What’s so impressive and disruptive about eBay Now?

 

Online, but local

 

First, it provides real competition for etailers like Amazon — same-day shipping is much easier when you’re starting from a shop a few miles away and have an army of drivers than when you have to rely on distant big-box warehouses and third-party delivery companies.

In that sense eBay Now looks like the saviour of retailers — finally, a way to get value from their network of stores in the age of ecommerce. But is it? eBay will own the customer experience and get all the customer data, inserting themselves as an intermediary. In a big-data world, knowing what people are ordering and when is an important source competitive advantage. Best Buy’s stores (for example) effectively become mini eBay warehouses or franchises, and may even have to offer deals and special terms to win eBay’s business against competition from other local retailers. Not owning your channel is a dangerous position to be in.

 

Seller ratings, but for drivers

 

Another really interesting bit is the fulfilment model. eBay isn’t spending money buying vans and hiring and training drivers. Individuals can sign up to act as couriers, picking your order up from the store and bringing it to you. It’s a crowdsourcing model — lots of casual labourers take jobs when they are available. eBay is the perfect company to make a success of this, because it already has a rating model in place: if your delivery is late or the driver is surly, rate them down and they’re less likely to get future orders. Drivers will start to compete to get the best rating and therefore the most business. This bit feels a lot like intelligent taxi service Uber — and if we look at the other interesting part of Uber’s business model, adaptive demand-driven pricing, we may guess that eBay could follow suit: want an order delivered at 6pm on a Friday? You’ll probably pay more because eBay’s delivery drivers are busy. We bet retailers wish they had load balancing built in to their business model!

A real use for mCommerce

 

The last piece of the puzzle is the mobile commerce element. Not only can you order from your smartphone, without having to navigate to multiple retailers’ poorly optimised mobile sites — eBay’s PayPal business fits in neatly, allowing you to pay at the point of receipt of goods without the hassle of cash or setting up accounts with individual retailers. You get to inspect the goods first and there’s real proof of delivery. Because it’s all smartphone-based between you and the driver, you can track his location in real time and know exactly when your delivery is going to arrive.

Ahead of its time?

 

So, a radically new channel that builds in mobile commerce, big data, crowdsourcing, trust models, location-based services… we bet cloud is in there somewhere! You can see why we think it’s a pretty big deal, and why eBay is the company to pull it off — as an established broker with a payment and trust infrastructure. But the really interesting thing is that all the pieces are in place and eBay actually needs to do very little to roll this out internationally — it doesn’t need to recruit, open any warehouses, or set up much new infrastructure. In fact the only obstacle will be explaining to everyone just how clever an idea it really is.

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