EBay wants to be fashion’s 800-pound gorilla.

The Web site, which revolutionized e-commerce in 1995 by connecting buyers and sellers in an auction format where price was set by the convergence of supply and demand, unveiled its first fashion app for the iPhone on Thursday. The company recently introduced an iPad fashion app, and an app for the BlackBerry mobile phone is due next.

This story first appeared in the July 16, 2010 issue of WWD. Subscribe Today.

The new fashion app could have major consequences for eBay and its competitors, and for consumers as well. Users will have access to the 20 million fashion items offered through eBay’s Marketplace. The app can be used to browse, virtually try on and buy products at any time of the day, anywhere the iPhone gets a signal (airplanes, yes; subways, no.) It can be downloaded for free on iTunes.

EBay’s core iPhone application has been downloaded 10 million times, the company said. A measure of the iPhone app’s potential: EBay expects to more than double its $600 million gross fashion merchandise volume of last year to $1.5 billion this year.

“Over the past year, we have made significant investments in dramatically enhancing the way customers shop for fashion on eBay,” said Dinesh Lathi, eBay Inc.’s vice president of North America. “[We] feel that mobile offers a great medium to continue our innovation in delivering a personalized experience and connecting our buyers with the world’s largest online selection of branded, designer and vintage clothing, shoes and accessories. It also enables our sellers, regardless of their size, to participate in mobile commerce in groundbreaking ways.”

With $5.45 billion in worldwide gross merchandise volume in apparel last year, eBay is the largest seller of clothing online. Apparel is also the company’s top mobile category in terms of items sold, and the second-largest after automobiles in terms of volume.

Not content with merely selling more apparel online than any other company, eBay wants to offer more exclusive fashion to its client base of more than 90 million active users. For example, eBay this year introduced exclusive capsule collections by Narciso Rodriguez and Norma Kamali.

Products are listed under the headings women’s, men’s, kids, baby and vintage, with the latter organized by decade.

While some online features will be carried over to mobile phones, a spokeswoman stressed that only merchandise not being sold at full price will be offered via the new app, which has a variety of selling platforms. There are outlet stores for Lord & Taylor, Aldo and Timberland. The Fashion Vault consists of flash sales featuring a single brand such as Max Mara, French Connection and Escada. The company said it is continuing Vault with similar brands. Exclusive collections are a result of partnerships with designers such as Rodriguez, and Daily Deals lists auctions ending in the next 10 minutes. Users can customize their list to show, say, only Giorgio Armani auctions ending in the next 10 minutes.

Other features of the mobile phone app include a virtual-style gallery of the latest trends and a “browse similar items” option that brings up more choices. A tap on the closet icon opens a user’s personal closet, where favorite fashions can be stored. With the outfit builder, looks can be assembled by mixing and matching pieces from the closet and virtually trying on clothing. A user can “dress” a downloaded photo of himself or herself. Items can also be dragged and dropped onto a simple dress form. There are also the requisite social media–sharing functions so that friends and family can veto any potential purchases.

Cashless payment is key to transacting mobile business, and eBay has a leg up with PayPal, a sister company. With PayPal’s “bump” app for iPhones, shoppers can transfer money between two phones by simply “bumping” or bringing one phone into contact with another phone.

For sellers, the mobile app offers the ability to download and list an item in 60 seconds or less. A seller can also see examples of similar items and their selling price to get an idea of what to charge.

Two purchasing options include “buy it now” and auction. Ebay said it has seen a steady increase in consumers buying at fixed prices, rather than at auction. The company has faced criticism in recent years for heavily promoting “buy it now,” which is favored by customers seeking instant gratification. Critics say it diminishes the site’s original stated goal of an interchange between buyers and sellers based on honesty and trust. EBay is still fairly laissez-faire, offering sellers suggestions on how to present their products rather than strict guidelines.

EBay is eager to build its stable of brands and outlet stores. For the first time, the company hired people with merchandising backgrounds to help sellers position their products. A dedicated buyer monitors what’s selling on eBay, then approaches the brands and asks them to consider selling directly on eBay.

EBay, like other large e-commerce sites, has been working to improve its fashion. In the spring the category received its own portal, fashion.ebay.com; improved visuals; gave pages editorial features, and has started hosting videos on the site. Rival Amazon, meanwhile, has taken a big interest in fashion, as evidenced by its acquisitions of Zappos and Shopbop.