Title of Post: eBay – Going the Extra Mile in the Value Management Chain
Organization Name: eBay
Industry: E-commerce (consumer-to-consumer & business-to-consumer sales services via Internet)
Web Reference: www.ebay.ca
In order to stay competitive and remain on the cutting edge of a complex business world, more companies are incorporating social media technologies into their supply chain management strategies. In our always-on, online world of e-commerce, consumers have become increasingly demanding, setting their expectations high when it comes to service. At the same time, supply chain organizations are slowly beginning to realize that deploying the latest technologies, in the form of social business networks, can help them create better supply chain efficiencies and buyer-seller relationships. After all, social networking is not really about socializing, is it? It’s about facilitating people-to-people communication and collaboration.
In the world of e-commerce supply chain circles, the term “social media” has no image problem. It carries no baggage. eBay is no stranger to the use of social media tools for business and for developing consumer relationships. eBay offers an online platform where millions of items are traded each day. It provides an online payment system, venues for customer feedback, relationships with other websites and a small business exchange feature. In their article eBay: The World’s Largest Online Marketplace, J. Gopalkrishnan and V.K. Gupta reveal,
A key part of the objective at eBay is to develop the work ethic and culture of eBay as a fun, open and trusting environment and to keep the organization focused on the big picture objectives and key priorities. These community values mean that the entire strategy lies in “trust” to build e-loyalty, for long-term, profitable relationships, these set of core values encourages open and honest communication between its members.
They further note,
eBay community values are incredibly amazing since it focuses on trading millions of dollars on mere faith and trust among the community members.
The ability to innovate and leverage new business relationships, either company-to-company or person-to-person, is a key value proposition of social business networks. A substantial opportunity in this innovation process exists between buyers and sellers in the supply chain. It is this link that is the focus of eBay’s newest twist on utilizing social media to optimize the customer’s experience. Building on its social network foundation, eBay has launched “eBay Now”, the company’s local shopping service.
Supported by a mobile or desktop app, this service promises that personal shoppers will complete a shop-and-drop-off not just the same day but “in about an hour”. Instead of building multiple warehouses and staffing them to provide exceptional delivery times to customers, eBay Now will use existing retailers as supply chain partners and distribution centres. The eBay Now service currently operates in San Francisco and the Peninsula, San Jose, Chicago, New York, and Dallas. It partners with department stores like Macy’s, Target, Walgreens and also stores like BestBuy, Home Depot, and Office Depot. By leveraging the supply chain systems of these local stores, eBay does not need to build its own supply chain in order to literally, go the extra mile, to deliver a fantastic customer experience.
JJ McCarthy, Head of Local Marketing at eBay, in an interview with Retail’s Edge, highlights two things. First, “we’re all busier, more consumed. Each generation is more accustomed to on demand. It doesn’t matter which screen we’re using or where we’re standing, we expect many options and we want the choice of getting things delivered quickly, or even now.” Second, “the infrastructure is coming online. Mobile is a big factor. Retailers need to embrace new ways and are recognizing that they need this to maintain top line.”
eBay is one of the notable success stories of the dot-com world. It is now a multi-billion dollar business with operations in over thirty countries. eBay expanded from its original “set-time” auction format to include “Buy It Now” standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money transfers (via PayPal[4]) and other services. (Netra Shetty)
These are simple examples of using technology to minimize inventory ownership by maximizing social networks. Technology advances and the need to work outside of normal business hours and locations, are creating increasingly mobile and distributed consumers. To respond to these demands, organizations are supplementing standard corporate communications with new consumer-focused tools and applications. Could a mobile app, a personal shopper with a smart phone, and a borrowed supply chain system represent the next generation of technology and supply chain integration?
We are only at the beginning of this transformation. Understanding it is the first step, what you do with the knowledge is the next.
Lessons for Others
- Don’t wait for the perfect solution to get started. Seek out innovation and ideas and test them.
- Know what your competition is doing.
- Build on your strengths.
- Find gaps or partnerships.
- Recognize that social networking goes beyond Facebook, LinkedIn, Twitter and other publicly accessible sites. Focus on what needs to be done.
References
Supply Chain Management of eBay
The Social Side of Supply Chain Management
eBay: “The world’s largest online marketplace”