Commerce Weekly: How Steve Jobs changed the way we buy

The iPod, iTunes, iPhone, and Apple Store have all shaped commerce.

We’re changing the name of this blog from ePayments Week to Commerce Weekly to better reflect the wider scope of our coverage — not just payment, but communication and transaction technologies along the entire commercial value chain.

With that in mind, here’s what caught my eye this week.

Steve Jobs’ commercial legacy

First generation iPodIt’s difficult to write about anything else today, with the entire tech and creative universe mourning the loss of an uncompromising genius. Much has already been published about the ways that Steve Jobs changed how we work and interact with computers. Less has been written about how he changed the way we shop and buy. Here are three thoughts on that.

The iPod and the iTunes store. As Jobs said before introducing the iPhone in 2007, the iPod “didn’t just change the way we listen to music. It changed the entire music industry.” Its pairing with the iTunes store actually went further, creating the first simple, sustainable platform for purchasing and downloading all kinds of digital media, including TV shows, movies, books, college lectures, and more. As of June 2011, iTunes had 225 million accounts, and through them more than 15 billion songs have been sold, making it the world’s number one music store. Apple extended the model to software with the App Store, which has distributed more than 14 billion apps in three years.

The iPhone and in-app purchases. Although there were smart phones before the introduction of the iPhone in January 2007, finding and installing new applications for them wasn’t easy. The iPhone changed that, making it simple to download and install new apps and opening the landscape for mobile app developers. By doing so, it broadened the opportunity for consumers to make purchases inside mobile apps. In-app purchases have helped make the freemium model (free to install, paid for with subsequent purchases inside the application) the dominant one for mobile apps, on iOS and other mobile platforms.

Apple Store in New York City
The Apple Store at 59th Street and Fifth Avenue, New York City. Via Fletcher6, Wikimedia Commons.

The Apple Store. Apple opened its first physical retail stores in 2001, just as other computer makers were closing theirs. But Apple’s innovations — cutting-edge architectural design, the Genius Bar, iPhone and iPad checkout — made their stores a destination for Apple fans and the curious alike. Ten years on, Apple has 357 stores across the world.

Even all this was a small part of Jobs’ legacy. I’d like to think the best part of what he gave us — even better than all the cool toys — was a shining, successful example of what’s possible when you don’t compromise your vision. He demonstrated to two generations of creative geeks what’s possible when you commit yourself to making a thing work the way it really should. That’s a rare feat in a world where too many things don’t.

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eBay CEO: We won’t compete with our customers

Ahead of eBay’s Innovate conference, Robert Scoble talked with eBay’s chief executive John Donahoe about the changes underway in retail, mobile, and social commerce. Donahoe predicted that rapidly evolving technology will drive “more changes in the way consumers pay and shop in the next three years than we’ve seen in the last 15 to 20.”

Scoble has posted the interview on YouTube (it’s also embedded below). Among the highlights:

  • Donahoe positioned eBay’s commerce ecosystem as a merchant-friendly alternative to Amazon: “We provide all the tools to help third-party developers create businesses for merchants, and we will never compete with [merchants].”
  • There are 500,000 developers working with Magento (the open-source ecommerce platform that eBay purchased earlier this year) and, according to Forrester, that work has generated more than $1 billion in revenue for them.
  • Mobile is a big opportunity because “people don’t want to enter a credit card number into a mobile device. It’s cumbersome,” and they don’t believe it’s secure.
  • Katie Mitic, who leads Facebook’s platform and marketing efforts, is joining eBay’s board. Donahoe positioned this as a significant gesture as eBay tries to work with Facebook to figure out the social shopping connection.
  • eBay is increasingly global: of the $60 billion in volume last year on eBay, 55% came from the U.S. and 45% happened outside the U.S. What’s more, 20% of eBay’s transactions cross borders. “So, $5 billion worth of goods was exported out of the U.S. on eBay.”
  • eBay will remain platform- and operating-system agnostic. “We’ve lost the hubris of thinking we’re going to decide for them. Our consumers will tell us where we need to go.”

There were a few notable gaps where Donahoe was honest about not having the answers.

  • On China: Although some Chinese sellers use eBay and PayPal for transactions with customers outside of the country, foreign companies can’t tap the enormous market in transactions within the country. He expects PayPal to partner with a Chinese bank or other financial service in the next few years.
  • On social commerce: While eBay is beginning to see elements of social entering the shopping experience, there’s still no clarity on what the social shopping experience means. Is it Facebook coming to eBay, or eBay merchandise selling through Facebook (or both)?

Got news?

News tips and suggestions are always welcome, so please send them along.

If you’re interested in learning more about the commerce space, check out PayPal DevZone on X.commerce, a collaboration between O’Reilly and PayPal.

iPod Photo via Wikimedia Commons.


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