Ebay Enterprise has gone through immense changes recently. In July eBay Inc. sold eBay Enterprise for $925 millionto a group of investment companies, which in turn spun off the divisions into four companies: eBay Enterprise; eBay Enterprise Marketing Solutions; Magento Commerce; and the CRM division of eBay Enterprise, which was acquired by Zeta Interactive.
1to1 Media caught up with Tom Barone, vice president of North America operations at eBay Enterprise, to discuss what these changes mean for the company and its role in helping retailers improve in the customer experience.
1to1 Media: There have been a lot of changes at ebay Enterprise recently; what part of the customer experience does the company focus on now?
Tom Barone: We're still called eBay Enterprise but we are now a private entity and no longer owned by eBay. We're a big provider of services for omnichannel solutions for brick-and-mortar stores and online retailers. What we do is enable retailers to leverage their brick-and-mortar stores to provide better customer experiences and increase their sales and inventory efficiency such as through in-store pickup or ship-from-store services.
DSW is one of your clients. How are you helping this brand improve its customer experience?
TB: Our work started with DSW in 2011 and we've continued to evolve our solutions for them. They started with ship-from-store services and recently added in-store pickup to offer a seamless experience to consumers. Part of the value for DSW of these services is the fact that they can better leverage their store inventory on their e-commerce site.
What we've seen from retailers is that their traditional e-commerce warehouse might be out of stock while a store might be overstocked and this improves inventory efficiency. That in turn reduces in-store markdowns and because we can route merchandise to a store closest to the customers, it's a better experience for them.
What trends are you seeing in ship-from-store services versus in-store pickups? Do retailers prefer to offer one service over the other?
TB: We're seeing growth in both. I do think we're seeing more growth in ship-from-store services though. Retailers are realizing this is an opportunity to leverage in-store inventory. At the same time, in-store pickup is a very viable channel. Retailers like this because it allows them to drive more traffic to the stores and reduces shipping costs.
But a lot of the debate around in-store pickup is truly incremental. For example, would customers order something just because they can pick it up from the store or would they purchase it regardless? Whereas with ship from store, the benefits are clearer because that sale would be lost [by not being able to access in-store inventory]. That's another reason why we recommend starting with ship from store. There's a stronger business case for it.
What misconceptions do retailers have about the various shipping services?
TB: A lot of prospects tell us they want to start with in-store pickups. As the news reports about Black Friday indicated, store traffic is down and mobile commerce is up. Retailers need to drive traffic to their stores. But we strongly recommend against that because most retailers don't have a good handle on their in-store inventory or it's not as efficient as they think it is.
We recommend starting with ship from store, because if a customer orders something, the retailer can re-route things from store A, B, or C and the customer will never know how it got there. As long as the merchandise is somewhere in the retailer's inventory, it will get to the customer. In the case of in-store pickup, if a customer shows up at a store and the item isn't there, that's a poor experience. We recommend retailers focus on ship-from-store services for six to nine months, work out the kinks in their system, and improve their in-store inventory accuracy before evolving to in-store pickups. That's the path that DSW took. The company started with ship from store, got really good at that, and then moved on to pick-up-from-store services.
What do you think about drone deliveries? Could that soon become a viable service?
TB: I might be cynical, but I think drone deliveries are more hype from companies like Amazon and Google than reality. There are tremendous regulatory and logistical hurdles to be overcome. Actually, I think the concept of Uber or Lyft providing on-demand local delivery services is more realistic. We'll see those types of local delivery channels become common long before drones.