eBay's Donahoe: Mobile Apps Revolutionizing Retail

By Alan Wolf -- TWICE, 1/30/2012

LAS VEGAS — Smartphone shopping apps will continue to radically alter the way consumers shop and pay, but are also providing brick-and-mortar retailers with new tools to drive traffic to their stores.

That was the message presented by eBay president/ CEO John Donahoe in his keynote address at the Consumer Electronics Association’s (CEA) annual 2012 Leaders In Technology (LIT) dinner, held last month at the Wynn hotel during 2012 International CES.

Donahoe said m-commerce and related technologies will bring more change in consumer shopping patterns over the next three years than has occurred in the past 15, and pointed to how the iPad has “significantly transformed” the way consumers access media since the device’s arrival just three years ago.

“The same thing is happening in retail, led by consumer- enabled technology,” he said, citing the 50 percent of all retail transactions that involved some degree of web access last year – and his own company’s $5 billion in m-commerce volume in 2011.

Within CE, eBay generated $4.2 billion in domestic transactions last year, which, Donahoe indicated, would have put it in ninth place on TWICE’s Top 100 CE Retailers Report, ahead of RadioShack.

But much of eBay’s revenue is derived from its retail services subsidiaries, including PayPal and storelocator shopping app Milo, which are enabling brickand- mortar merchants to compete with e-tailers as the smartphone continues “blurring the line between e-commerce and retail.”

Milo, for example, shows consumers where they can find a product locally and allows them to purchase it with one click for pick up at the store, which provides the retailer with additional attachment-sale opportunities.

Donahoe also cited Best Buy’s work with Shopkick’s location-based mobile app, which sends tailored offers to customers as they stroll past its stores.

“Consumers feel like they have a mall in their pocket — they want it when they want it and how they want it — and merchants of all sizes are confronting change,” he said. Some dealers will suffer as a result of the retail revolution, he added, but those who embrace the new technologies will thrive.

The LIT gathering, which draws a litany of retail, manufacturing and government luminaries, also featured an address by Nevada Gov. Brian Sandoval, who is working to transform Las Vegas and his state into a data and high-tech development hub.

In his opening remarks, master of ceremonies Gary Shapiro, president/CEO of CEA, noted that this year’s International CES was on track to be the largest in the show’s history, and reiterated the importance of techindustry innovation as a key economic driver.