eBay Launches Crowdsource Gift Buying
By Tom Ryan
eBay last week launched an online group gift buying service designed
to make it easier for consumers to collectively purchase gifts. The application,
said the auction house, aims to "relieve costs during tough economic times
and help groups crowdsource excellent gift ideas."
According to a statement
from eBay, any item on its website can be purchased this way through groupgifts.eBay.com
rather than by a typical individual bid. Extended family members or friends
can be invited to help purchase a gift through Facebook or e-mail. Those looking
to join would choose an amount to contribute and pay using either PayPal or
a credit card. A personal note from each can be added.
Beyond cost savings for
individuals and efficiencies in gathering gift-givers, eBay Group Gifts "is
a lot of fun" and capitalizes on emerging social
media tools, the company said. Ideal opportunities were said to be graduation
presents, holiday presents, and any other typical registry events calling for
group buying.
"eBay Group Gifts was designed to address a real world need for people
who want to join together to give a bigger and better gift for someone they
care about," said Amit Menipaz, who led the project at eBay, in the statement.
Speaking
to USA Today, Sucharita Mulpuru, vice president for Forrester
Research, doesn’t think the tool will gain "any mass adoption."
"To make this work, you need to really promote it, and you need to change
consumer habits around how they may be doing group-gifting," said Ms.
Mulpuru. "I’m
not convinced the market is so huge that it will change anyone’s habits."
eBay
North America vice president Christopher Payne told USA Today, "eBay
Group Gifts lets you do in three minutes what is otherwise a time-consuming
and painful process that can take weeks to complete."
Discussion Questions: What do you think of the opportunity to drive group
buying via social media tools? Are consumers ready for group buying online? How
would you rate groupgifts.eBay.com?
How do you feel when you hear, “Hey, let’s go together and buy (fill in the blank) for Christmas? I don’t know about you but I cringe.
It may be hugely successful, but I still cringe at the thought.
It’s an interesting idea, but it won’t be a game-changer for eBay. Instead it offers a novel approach to encourage more purchasing through eBay’s seller base. eBay has not fundamentally altered its business model in years. This will add another wrinkle in time for the holidays.
Fact: Digital social networks have given people the ability to organize quickly and efficiently regardless of the cause or event.
So, there’s no reason why thousands of consumers can’t come together to purchase the same item en mass through social buying networks.
I also see social buying progressing to the point where these mass purchases are being made directly from the manufacturer, which will cause massive disruption in retail. Any retailer that doesn’t somehow add value through distribution will be at risk.
It’s entirely plausible that social buying groups will in some cases become more formidable in scale and buying power than many mid-sized retailers, making it almost inevitable that manufacturers will be willing to deal direct.
If anyone is interested, there’s more on this in the following post.
It seems that the marketing department at eBay is trying something new & worthwhile to reach into networks of people for awareness and consideration. Good for them.
From the shopper’s perspective, I think that group buying makes a lot of sense, especially since the behavior has been going on for years in the off-line world. Technology makes it easier.
However, I don’t think that eBay is in the best position to execute this. A traditional retailer, such as Best Buy or Walmart could do it better. Here’s why: on eBay, the group needs to worry about whether the gift will “expire” or sell out before they raise the money–clearly a concern around the holidays. (eBay tells you that you can buy an alternate gift or get your money refunded. So obviously, they are concerned about this eventuality too.) A traditional retailer could guarantee availability of the product.
Also, the eBay gift ringleader needs Paypal. A traditional retailer doesn’t need to put these restrictions around the purchase.
If a group of friends wants to buy a gift, would they choose eBay? Sure, if it is the only game in town. Otherwise, I think that other retailers can thank eBay for contributing a great idea for the Holidays.
Isn’t it easier and more relevant to buy a gift card?