E-commerce giant eBay today made its latest moves to blur the lines between online and offline commerce, and it’s chosen the UK to do it: it launched a new “Click & Collect” service, where shoppers can buy goods from eBay online and then select a physical retail location where they can be delivered. On top of this, eBay said it will be bringing its same-day delivery option, eBay Now, to the UK, its first push outside of the U.S. for the service.
“Our eBay Now service is coming to Europe, starting with London next year,” eBay president Devin Wenig announced in a presentation in London today.
EBay has been working on Click & Connect for about a year already, and the UK is the first, but not only, market where eBay plans to take the service. Wenig told me the UK was selected for the debut because early trials showed UK shoppers to be the most receptive, with 40% opting for in-store pickups when they were offered, compared to just 7-8% of U.S. consumers.
“This is part of the bigger picture. This is the march around the world to bring offline and online together, and offer our consumers choice,” Wenig told me in an interview. “I wouldn’t be surprised if Click & Collect became a global option, along with eBay Now becoming a pretty global option. We are shrinking the gap…I definitely think we can export this to other places.”
Click & Collect it will operate on two levels: for large retailers who have physical stores and also sell on eBay, they can now give users the option to pick up goods in those stores instead of having them delivered. For smaller eBay merchants, eBay has struck a deal with the Argos chain of stores for home goods for users to get their ordered goods delivered there.
The Argos deal will cover, at first, 150 UK stores and some 50 eBay merchants, Wenig said. The idea is that this will give consumers who do not want to buy certain items with delayed delivery more convenience in getting those goods more instantly, coupling that with the physical retail shopping they’re going to do anyway.
EBay says that it will be working with a “trusted” national partner to help implement Click & Connect (and presumably the eBay Now delivery network), but has not named that company. Meanwhile, it has a relationship with collect.co.uk already for eBay sellers to drop off packages at a network of some 5,000 stores for posting to buyers.
Meanwhile, it makes sense for eBay to expand eBay Now to international markets, which make up some 64% of the company’s total revenues in its marketplace division. (For context, Marketplaces accounted for $2 billion of eBay’s $3.9 billion in revenue last quarter.)
Up to today, eBay Now has been growing only in the U.S., first opening for business in San Francisco in August 2012. It now works in a few other cities, including Chicago, Dallas, and the wider New York and Bay Area regions. And eBay has also expanded eBay Now from a mobile-only product to one that also can be used on the desktop.
While eBay Now is a competitor against the likes of Amazon Prime and (to a lesser extent) Google Shopping Express, Click & Collect is more akin (but not the same as) the delivery locker services that these rivals have rolled out. Amazon Locker is live in the UK, while Google has yet to extend its BufferBox-fuelled service outside of the U.S. and Canada. Another UK competitor that works across more than just those walled gardens is My ByBox.
A new way to shop, and a new chapter for fulfilment, too
Wenig says that between eBay Now and Click & Collect, it may not be moving into locker services any time soon. “Lockers is not something right now that we’re exploring, but we’re following where our customers will take us. Think of Click & Collect as lockers with a sales associate attached to it. I’m not sure if [also offering lockers] is a choice that they need.”
While different locker services give consumer the convenience of being able to get deliveries of online goods to secure locations without having to be around to sign for them, Click & Collect is attempting to do something more: it’s trying to get those consumers specifically into retail locations, where they may potentially do more shopping.
“This new way to shop — with different online merchants and collection at convenient locations — could create immense opportunities for sellers,” said Wenig today.
With Click & Collect, pick-up is one aspect of the service; the other is that merchants are also working with Argos (and maybe others in the future) for the actual fulfilment of those orders. That is to say, if you buy a blender from an eBay merchant that is offering Click & Connect through Argos, that merchant sources the blender from Argos stock.
“Argos will have a separate part of their warehouse for merchants who sell on eBay,” Wenig told me. “They will have just-in-time inventory to meet orders.” He explained that since Argos already has a courier network, this will also help move items between different retail locations. This will mean that “high velocity” items (his term) will be available quickly for those buying online, “within an hour or something like that.” Less popular items may take longer to fulfil. It sounds like stock info for now may be real-time, too.
The move is an interesting one both for eBay and for the physical stores with which it will partner.
For eBay, it brings the company closer to where most people are still spending the vast majority of their money. For example, stats out from the U.S. Census Bureau in August note that in Q2 of this year $64.8 billion was spent in e-commerce. But total retail sales were $1,126.2 billion. In other words, only 5.75% of retail sales in the U.S., one of the bigger e-commerce markets, are online.
But for brick-and-mortar retailers, the longer-term writing is on the wall. Online continues to grow faster than offline (5% versus 1%, says the USCB), and at a time when many physical retailers are seeing stagnant growth or even declines in sales, it’s important for brick-and-mortar companies to continue embracing avenues like the Internet to connect with users. You could argue that is was also part of the logic behind why another UK retailer, Tesco, yesterday announced its first tablet product, Hudl.
This is, by far, not eBay’s first move to connect better with the high street. PayPal’s here mobile payment solution puts eBay right at the point of sale for transactions with smaller merchants. And eBay has also created a touchscreen store window for Kate Spade Saturday to browse items, and check-in and QR Code services to quickly check for and buy items online.
Update: I’ve interviewed Wenig since initial publication and have updated this story with his comments.