Auctions On Your Wrist? eBay Has High Hopes For The Apple Watch

The online marketplace dates back to an e-commerce era involving dial-up modems. Its leaders hope the Apple Watch will help accelerate its transition to the new online shopping era.

How can an e-commerce company built in the desktop era get customers to buy things from their wrists? That's the challenge for RJ Pittman, eBay's head of product, who came to the auction and marketplace giant in late 2013 from Apple, where he worked on the company's e-commerce platforms.

Despite a history that dates back to dial-up modems and a business whose sales are still made primarily on desktop computers, eBay is "uniquely suited to jump into wearables," Pittman told BuzzFeed News in an interview. Because the Apple Watch will be tethered to iPhones, "several hundred million" people who have downloaded eBay's app will be Watch-enabled, "just with the app they have."

While the 46-year-old Pittman wouldn't say much about the specific functions of eBay's watch app, he did say that he hoped efforts to get on users' wrists would take the entire company further down the line of "ephemeral" and "frictionless" commerce. "We're thinking about breaking the barrier of websites, even apps and downloads, and transact commerce at the speed of thought."

A specific example Pittman gave of what his team of five to seven people are working on is notifications: When you are outbid on an eBay auction, "you might get a little vibration on your wrist and have an outbid notice," he said. "You don't have to do anything to look at it and turn it away, or you can tap to bid it up and in one tap you're in the game. It's a new level of frictionless engagement."

Pittman did say that when eBay's app for the Apple Watch is released ("it's coming this spring, call it a few weeks or so, right on the heels of the launch of the Watch"), the vibrating notifications "will be part of the experience."

But, for now at least, the vast majority of eBay's activity will be on screens considerably larger than even the 42 millimeters the largest Apple Watch provides. Of the $83 billion transacted through eBay's marketplace in 2014, $28 billion (34%) came through mobile devices, up from over $20 billion in 2013.

The Chinese e-commerce giant Alibaba had 42% of its gross merchandise volume in China come from mobile in the last three months of this year — about 327 billion yuan (about $53 billion) worth, more than triple that of a year ago.

While eBay's scale is still massive — its $83 billion in general merchandise volume (all sales done on the marketplace, of which eBay takes a cut) in 2014 is comparable to Amazon's $74 billion in sales — its growth has slowed. eBay's chief financial officer Bob Swan said on a call with reporters to discuss the company's financial results that 2014 was a "year we're glad to have behind us," while its revenue from transactions on its marketplace grew only 1% in the fourth quarter of 2014, and 9% for the full year.

Sales at Amazon, by comparison, rose 20% in 2014, while at Etsy — a much smaller, much trendier entrant into the online marketplace business — sales rose 46% to $1.9 billion. And both competitors seem to have the wind at their backs, with Etsy approaching an IPO and Amazon on Tuesday announcing a new system that lets customers place orders by pressing buttons stuck on the walls of their kitchen pantries or laundry rooms.

Wearable computers like the Apple Watch will add to pressure on eBay to adapt to changing consumer habits, but Pittman also sees it as an opportunity to rethink the basics of the business. "What I love about this is that the 42mm screen real estate is a design constraint, it's driving something that I'm trying to do at eBay: simplify commerce," he said. "The watch forces you to your bare essentials, you don't get to build a web site or app in 42 millimeters. We get right down to the most important, most useful capabilities and put them in in a way that's only for one finger to tap."

There is, however, an intuitively designed and habit-forming mobile commerce product already under the eBay roof: Venmo, which eBay CEO John Donahoe recently said is "on fire." But Venmo is part of PayPal, which will soon be spun off from eBay into a new stand-alone company.

eBay overhauled its desktop design in late 2012, introducing more and bigger images — like Pinterest — along with enhanced personalization features, including curated collections that rotate daily. "What you'll see is a much deeper focus on design," eBay Marketplaces President David Wenig told AllThingsD after Pittman was hired. "We're placing a lot of emphasis on the user experiences, and so this feels like a natural evolution."

RJ Pittman joined eBay in late 2013. A previous version of this post misstated that he joined in late 2012.

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