When you invent a category, you become that category, and the category is you. To customers, you and the category become synonymous.
But what happens when you jump into an entirely different category?
Will your current customers follow you? Will new customers be attracted to you?
That all depends...
eBay created the on-line auction category, and built an empire on that concept. Internet-based auctions became their Blue Ocean. But this article in Wired Magazine reveals how eBay is expanding into an entirely different line of business: One-hour deliver of products from local retailers.
The service promises to deliver customers products that they order from local retailers, within one hour. That's a far cry from what eBay is known for, and from the strategic advantages and capabilities that it has built and refined over the years.
There is nothing unique about eBay Now(that's what the service is called); in fact, the business model can be easily replicated by competitors. For example, the US Postal Service has introduced a service through which they will deliver products on the same day that they're ordered. (Sure, eBay Now's competitive slant is delivery within one hour, which is of course faster than same day. But let's face it - how often does a consumer really need that flat-screen TV within 60 minutes, instead of just one day?
Here's my prediction:
eBay Now will have limited success at best. It's moving into an area that leverages few, if any of its core competencies. It's also doing something that can be easily replicated by competitors, at a lower cost (The US Postal Service already has the core delivery infrastructure in place.)
Will eBay Now be successful? What do you think?