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eBay's Plan to Best Amazon Hangs on Digital Wallets

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A New York Times writer takes a deep dive into eBay's strategy for competing with Amazon, finding that the company is looking far beyond the auctions that initially made it money, and is investing in a host of futuristic technologies that may or may not pay off in the long term.

Among them is the digital wallet, a way of saying that much of the personal data you carry physically—your ID cards, credit cards, etc—will, in eBay and other companies' dreams, be stored on your smartphone. Instead of improving on their core business model, eBay is betting on the digital wallet, as well as other initiatives such a "smart mirror" that, "takes your measurements and allows you to try on several outfits virtually and then purchase them from the screen."

The advantages of digital wallets for retailers are myriad. Not only will they be able to track shoppers in stores, they'll also be able to see purchase history and preferences—the sort of information that online retailers currently enjoy and brick-and-mortar shops tend to lack. Whether customers would appreciate such, uh, sharing with corporations is another story. "There's not much genuine demand for the digital wallet," asserts the Times. Why would consumers want to leave cash and credit cards behind? Credit cards are easy to use; cash, anonymous. Said eBay CEO John Donahoe, "I would say everything we're doing is just enabling the future."
· EBay's Strategy for Taking On Amazon [NYT]
· Retailers Test Technology That Follows You While You Shop [Racked]