SAN FRANCISCO: EBay, owner of the world's largest Internet marketplace, is teaming up with Macy's and Toys 'R' Us as it goes after revenue from shoppers who are out and about, not just online, during the holidays.
EBay is building mobile technology for retailers that helps consumers find and navigate stores and use discounts. The Macy's application, for example, senses when shoppers enter a store, sends a mobile coupon and gives directions to the right department to make a purchase.
"This is part of our playing in the commerce ocean, not just the e-commerce pond," Steve Yankovich, EBay's vice-president of mobile, said in an interview.
"We're going from a several-billion-dollar market in e-commerce, and in connecting through mobile to the actual physical store, we then have EBay playing in the trillion-dollar ocean."
By allying with real-world retailers, EBay stands to gain a larger share of the 95 per cent of shopping that, according to the United States Department of Commerce, still takes place in stores.
The company has been adding tools for retailers as it pursues new ways to boost revenue, which is estimated to rise to $14.1 billion this year. While that's up 62 per cent since 2009, it's still just a fraction of Amazon.com's projected $62 billion for 2012, according to data.
Macy's, Toys 'R' Us and EBay's other partners, including Best Buy Company and Target Corporation, benefit from a company whose expertise lies in both building technology and getting people to shop online. Yankovich declined to comment on how much revenue the partnerships are expected to generate for EBay, though he said "you'll see a lot more" of them in coming months.
"I'm not sure from an immediate monetisation standpoint that it's a huge opportunity, but from a brand-building and mobile-penetration standpoint, it's probably a significant opportunity," said Daniel Kurnos, an analyst at Benchmark in Delray Beach, Florida. "EBay is becoming more and more of a technology play." Retailers across the board are trying to target shoppers wherever they are, taking heed of trends that show more people are making purchases on mobile devices.
Customers who opt to go into stores want technology-driven perks in exchange for forgoing the convenience of shopping from a couch, Yankovich said. Retailers will pay for tools that can help consumers navigate crowds and find shortcuts to sales, he said. Shoppers are asking, "How are you going to help me, guide me, connect to me while I'm here?" he said.
Big-box retailers need to be a part of that. More than 18 per cent of shoppers used a smartphone or tablet to access a retailer's website on Cyber Monday, an increase of 70 per cent over 2011, according to a November 27 report from International Business Machines. Mobile sales almost doubled, making up 13 per cent of total Web-based purchases, IBM said.
EBay projects sales over mobile to reach $10 billion this year. About $57 billion sales transactions happened online in the third quarter, while total retail sales reached $1.1 trillion, according to the US Department of Commerce.
EBay chief executive John Donahoe is using GSI Commerce, which he acquired for $1.9 billion last year, to target potential partners in mobile technology.
The new in-store features became available in an update to the existing Macy's app 10 days before Black Friday. It garnered 200,000 new downloads, and prompted a third of the installed base to upgrade.
The transition into building software tools for physical retail partners has been under way since the company bought GSI last year. Yankovich, Donahoe and other EBay executives have been mentioning the prospect in meetings with chief executives and other top executives who run the physical stores for big brands.
Another customer, Toys 'R' Us-owned FAO Schwarz, worked with