eBay Blurs the Line Between Online, Offline Commerce

A growing number of purchases in local stores start with people doing online research. Simply put, savvy consumers prefer to check reviews on products and retailers these days  before they open their wallets.

According to Forrester Research $917 billion worth of purchases in 2009 -- or 43 percent of all U.S. retail sales -- were influenced by Web research. By 2014, 53 percent of sales will be Web-influenced, amounting to $1.4 trillion in sales. Those numbers are much higher than for online retail sales alone, which is expected to grow 10 percent a year to $278.9 billion in four years.

With consumers using the Web to research both online and offline purchases, eBay is among the major online retailers looking to profit from this trend. For quite a while, eBay has been broadening its model from online auctions to retail.

Late last year, for example, eBay paid $75 million to accquire Milo, marking the start of a push to serve retailers in local markets. “EBay wants to be the place that shoppers go to buy whatever they want anyway they want,” David Ramadge, head of local business development at eBay, said.

Milo provides product searches that end with a list of local stores that carry the item, along with the price and a Google map to get you to the location. EBay is testing software it calls Milo Fetch that makes it possible for a small business using Intuit QuickBooks, Microsoft Dynamics, and Retail Pro point-of-sale software to list its products automatically on Milo, eBay, and PriceGrabber.

Fetch pushes the inventory listing to the sites and tracks sales of the item online and offline. If the item sells out, then it’s listed as sold out on the sites until the product becomes available again. Fetch is read only software, so no data is changed in a retailer’s system, Ramadge said.

Setting up Fetch won’t be easy for many small businesses. Retailers that use bar codes and standard descriptions of products will find it much easier to get started than businesses that sell unique items without bar codes and use their own shorthand to describe items. For those businesses, much of the setup will be manual and, depending on the number of items, could take a long time.

Then there’s the question of standing out among the hundreds, if not thousands, of retailers hawking similar products. Ramadge claimed sellers on Milo are treated equally and can’t buy greater attention. He wouldn't say what eBay will do after it takes Milo Fetch out of beta.

For now, the service is free. EBay may decide to keep it that way, offering paid add-on services in the future, or it may move to a subscription model, Ramadge said.

EBay also won’t say when the testing phase for Fetch will end. The majority of products that head to the eBay site through Fetch end up on the company’s Garden site, which is set up for experimental services.

Small businesses that want to widen their presence on the Web may find the experience of using Fetch useful, at least while it’s free. If eBay starts charging for the service, though, retailers will have to decide whether it can generate enough sales for them to justify the cost.