Bloomberg News

EBay Plays ‘Anti-Amazon’ Offering $10 In-Store Discount

December 20, 2011

(Adds EBay’s application in third paragraph.)

Dec. 16 (Bloomberg) -- EBay Inc., the world’s largest online marketplace, will give consumers an incentive to shop in stores after Amazon.com Inc. came under fire last week for offering shoppers a discount to do the opposite.

EBay will offer customers who spend $100 online a $10 discount for purchases in certain stores, it said in an e-mailed statement today. People must buy on the web from Toys R Us Inc., Dick’s Sporting Goods Inc. or Aeropostale Inc. using EBay’s PayPal payments servicer.

Amazon drew criticism from Senator Olympia Snowe, a Maine Republican, last week for offering a 5 percent discount to entice people to use a new mobile application to compare prices with physical stores. While EBay also offers an app for price checking it doesn’t actively compete with retailers on its site.

EBay is “trying to be the anti-Amazon in a sense,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. The company is “positioning itself as a partner with traditional retailers, where as Amazon is trying to accelerate that shift away from stores.”

Amazon, the world’s largest online retailer, and San Jose, California-based EBay are vying for a greater share of the retail market where e-commerce accounted for just 4.6 percent of total retail sales in the third quarter, according to the U.S. Department of Commerce. EBay’s $10 promotion began today and will run until Dec. 19.

American Booksellers

Amazon’s Price Check app, which also drew criticism from the American Booksellers Association last week, allows shoppers to look up online prices by scanning products at a store using their phones. EBay users can also check and compare prices in stores with a barcode scanner using its mobile application.

The difference, said Brian Blair, an analyst at Wedge Partners Corp. in New York., is that “Amazon is a direct competitor to brick-and-mortar retailers.” The Seattle-based retailer drew fire because the app lets the company gather in- store prices and adjust its own to be more competitive, he said.

EBay has developed relationships with brick-and-mortar stores this year through the $2.4 billion acquisition of GSI Commerce Inc., which manages websites and inventory for 180 retailers, including the ones participating in EBay’s promotion.

Sally Fouts, an Amazon spokeswoman, didn’t immediately respond to a request for comment.

EBay rose 2.7 percent to $30.40 at the close in New York. Amazon was unchanged at $181.26.

--Editors: Niamh Ring, Jeffrey Tannenbaum

To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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