eBay’s (EBAY) one-hour delivery experiment is over in the U.S.
The company says the eBay Now service, including the recently-launched program in Brooklyn, NY, is being “retired” here, although it will continue in the U.K.
eBay Now began in San Francisco in 2012 and expanded to Chicago, Dallas, New York and London. It involves the use of couriers picking up merchandise from retailers, such as and Best Buy (BBY) and Home Depot (HD), and delivering them to customers in as little as an hour. But now in a press release, eBay says when it comes to America:
"While we saw encouraging results with the eBay Now service, we always intended it as a pilot, and we are now exploring delivery and pick-up/drop-off programs that are relevant to many more of our 25 million sellers, and that cover a wider variety of inventory that consumers tell us they want."
Yahoo Finance Senior Columnist Michael Santoli says immediate delivery of purchases just isn’t practical financially.
“It really does make sense in terms of pleasing customers, perhaps,” he explains. “But that doesn’t make it a really good business.”
Santoli believes eBay was playing out of its league with eBay Now.
“It really represents the difference between eBay and Amazon (AMZN),” he argues. “Amazon can try these things and be very aggressive on these fronts because it has such a fast-growing core business. eBay is a little bit in a retrenchment mode-- they’re not growing as fast, they can’t simply experiment as freely.”
And Santoli says eBay executives just decided to cut their losses.
“They said it was a pilot program,” he notes. “And it proved to be something that they did not want to throw further investment at.”
Along with eBay Now, eBay says it’s also dropping the eBay Valet, Fashion and Motors apps. Santoli thinks a lot of that has to do with the recent spin off of eBay’s PayPal (PYPL) payment unit.
“The split of legacy eBay and PayPal is definitely causing eBay proper to curtail their ambitions a little bit,” he says. “You see them sunset a few other product categories after the split.”
And Santoli feels these pullbacks in the post-PayPal era are understandable considering where eBay may be heading in the future.
“A lot of people think the old eBay is now primed to become an acquisition target down the road,” he points out. “They do have a good business, they are an e-commerce player of substantial scale, but the growth is really not that strong right now, and I do think that’s going to force them to prioritize exactly where they want to lay their bets.”
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