An auspicious e-mergence for the online shopper?

This blog is a follow-up to the topics discussed in an earlier “iCredit” blog.

eBay Inc. and Yahoo Japan Corp., the online auction site that dominates the Japanese market, are now a team.  While earlier attempts by eBay to compete with the Yahoo site failed miserably, this happy union appears a fortunate compromise for both companies and their consumers.  Japanese products are increasingly popular in the West, from comic books to collector items.  Kismet, it would seem, to combine two of the most powerful online auction sites for the two countries.

And that’s not all eBay’s been up to.  Skype, the expensive 2.6 billion dollar 2005 acquisition of eBay will no longer lay semi-dormant.  CEO of eBAy Meg Whitman has promised an influx of investment into the Skype infrastructure which, despite complaints, promises to increase in membership dramatically; Skype will encompass over 355 million users when it adds 110 million new users via an agreement with MySpace. 

One reason the news is so exciting is the potential online payment plans that may soon be available through eBay’s Skype.  The idea to send online bills to consumers in the form of an addition to the  phone bill in not new.  A company called eCharge marketed the idea in the 1990s.  But it never took off quite like expectations predicted, rather like (and at the time of) eBay’s purchase of Skype.

Yet what eBay may soon be able to produce is an Internet auction/social networking platform that collapses geography and eases financial worries for both vendor and consumer.  Already there has been talk of Skype as a way to sell digital content.  It appears to have the tools, the money, and the technology.  Has eBay determined this is the time?

Companies increasingly hail eCommerce as an invisible shopping mall consuming global commerce. Everyone is rushing to build better, wider, and more prominent e-entryways into the online bonanza. An i-idea receiving a lot of press this present season is “social shopping”.

“Social shopping” (e.g. ThisNext.com, Wists.com, etc.) combines social networks with online shopping in order to build trustworthy consumer spaces in which to launch new products and evaluate current products and services. While these sites might i-inspire real purchases (via online recommendations), virtual shopping is not yet incredibly competitive with online shopping for many tangible items.

Shoppers go online to browse possible purchases but many prefer to buy in the real world. There is still not enough social capital or trust invested in general online product purchase. Time will increase online traffic to social shopping sites for the stuff that can’t be found at the (geographically) local shopping centre, but current eCommerce is more essential elsewhere—in online fields that will carry increasing importance as Internet shopping expands.

Much eCommerce is “i^3”, that is, “international, Internet, or intangible”. International purchases include vacation plans or holiday rentals and transportation. Internet services such as broadband or wifi make up the second i-product category. Intangible purchases include “products” like music, car insurance, or credit cards. These “i-products” make up the fastest-growing online markets, and the companies that cater to them have heavily-trafficked e-Entries. A member of the third category, the “intangible” credit options available to consumers, will be of huge importance in the coming consumer era online.

The concerns that these credit eVendors must address will influence the future of eCommerce. Means of e-payment and means of monitoring e-payment are major consumer concerns. PayPal, the exclusive online payment service currently owned by eBay, is experiencing legal frustrations that will no doubt create precedents, both legal and social, by which to judge future online payment services. Credit cards are competing for compatibility and recognition online by both e-consumers and e-vendors. Consumers online are evaluating their payment options for usability, reliability, and privacy and security. The payment services that are best able to guarantee (and make e-visible) their eCommerce competence in these fields will win a current and future online consumer base.

Social Buzz about different credit cards is already incriminating companies that may not necessarily deserve it. The TJX scandal is not the fault of Visa or Mastercard, yet analysis online demonstrates that a lot of Blog Buzz links the two cards to “identity theft” as a result. (Ironically, this breach was not even connected to shopping online, but to the mere existence of electronic consumer data.) Such Buzz-worthy scandals also play into the growing concern with consumer debt as the dollar dives and the global economy experiences a growing amount of apprehension over future energy costs. Whether or not credit companies are directly involved in these concerns, Buzz analysis suggests that they make useful scapegoats.

Credit companies need to be aware of and involved in this discussion online. Companies need to demonstrate that a faulty economy is bad for credit lenders as much as borrowers. Credit cards need to construct a form of e-trust between consumer and card in order to climb out of the current crisis and into the digital future of commerce. Consumers are anxious to participate in the online market, but anxiety is not an emotion that should be connected to method of payment. Credit cards are necessary in the current consumer client; cards need not be a necessary evil.