With Amazon in Its Crosshairs, eBay to Launch Same-Day Delivery for eBay.com Purchases by Year’s End
In the race to scale a same-day delivery service nationwide, eBay says it’s ready to step on the gas.
CEO John Donahoe said in an interview last week that his company will this year begin rolling out same-day delivery options for eBay.com transactions in which the buyer and seller are located in the same geographic area. Buyers will be able to choose immediate delivery or pick a time window later in the day to get the delivery. They will also have the option to pick their product up or opt for normal shipping. Buyers currently can only choose from traditional shipping options.
“On the core eBay site by the end of the year, we will give those choices on items on the eBay marketplace where the buyer is in the same city as the seller,” Donahoe said.
EBay has been testing the same-day delivery function up to now with its eBay Now mobile app and mobile website, which let shoppers in Manhattan, San Francisco and San Jose order from stores such as Macy’s, Home Depot and Walgreens, and get delivery in about an hour. EBay employs the delivery person, and charges customers $5 for the service. Customers must spend $25.
Today, the company is also announcing the launch of eBay Now for the desktop — a critical expansion, it says, since daytime deliveries during office hours have been big, including on Fridays, the highest-volume sales day of the week. The desktop version will organize goods by store brand, in an attempt to mimic how most people make buying decisions locally in brick-and-mortar stores. It will also let a shopper track where its product is in the delivery process. The service will also be available in parts of Brooklyn and Queens in New York City and the Bay Area peninsula, starting today, with Chicago and Dallas launches coming soon.
Ebay, of course, is not alone among tech heavyweights in the desire to create a massive same-delivery business. Google recently introduced Google Shopping Express in the San Francisco Bay Area, as it looks to boost its giant local advertising business with local deliveries.
And Amazon recently expanded its AmazonFresh grocery delivery business outside of Seattle to neighborhoods in Los Angeles, after operating the business solely in its hometown for five-plus years.
Industry observers expect that if Amazon is able to break even on that business, it will soon load up delivery trucks with other, higher-margin goods from Amazon, such as electronics. In this way, many view grocery delivery for Amazon as merely a means to an end through which it is ramping up demand for something that people buy weekly to justify the cost of same-day delivery for other goods bought less frequently, but with much higher prices and profit margins.
The grocery business could also add another category of marketers to Amazon’s advertising business — supermarket and food brands. Amazon’s advertising business is still small by its standards — about $600 million last year according to an estimate from research firm eMarketer — but growing rapidly.
It will be interesting to watch what traction eBay Now gets in new markets. It currently has three-and-a-half stars in the App Store, with many of the negative reviews simply complaining that it’s not available in a certain market. Still, eBay will have to, in many ways, continue to change America’s perception of who it is — from a marketplace to buy old video games or antique goods to a company to rely on for same-day delivery of new clothes from Macy’s or wood flooring from Home Depot.
But if it can change that perception widely — and nothing does it for us Americans like telling us we don’t need to get off the couch to go to the store — eBay will try to convince brick-and-mortar retailers that it should be the service to handle all of their same-day deliveries. Rather than wait for the remainder of the 85 percent of retail to come online, eBay is going out into the offline world to get a piece of it.
“No one retailer is likely to do it themselves,” Donahoe said last week, a message he has delivered in the past.
To that end, eBay has said it will start experimenting with outsourced delivery to complement its own delivery people, who are a mix of part-time and full-time employees. Donahoe said eBay could, for example, look to outsource to businesses that own trucks but have significant downtime, such as newspaper companies. He also wouldn’t rule out experimenting with a “pure collaborative consumption” model, where individuals unaffiliated with a company deliver on behalf of eBay.