Local Commerce – Just A Hype?

The topic Local Commerce is currently much discussed and commented.
On the one hand, as one of the current trends in e-commerce and a source of salvation for the traditional brick-and-mortar retail trade, on the other hand, it is often seen critically as a wrong path for which there is no need and no opportunities.

Contrary to the skepticism that exists in some cases, however, new local commerce initiatives are currently being announced and also launched. A very good and comprehensive collection of current local commerce initiatives maintaines for example, cima.digital

Stationary Trade Is Under Pressure

So, there are some things going on in this not-so-new, but comparatively young field. This is not surprising, the stationary trade is increasingly under pressure from online retailers. Stationary retailers have little choice but to go their own way towards digitization and also be present in the online business in order to be successful in the future.
But the key question is: What is this best approach?
How can stationary retailers successfully build up a second foothold in the online business in addition to the classic retail business? How can the advantages from both worlds be best combined and used?
The idea of ​​tackling the current challenges together in the form of locally oriented online marketplaces is certainly promising. Costs for development, operation and marketing can be spread over many shoulders with this approach and do not have to be borne by each one alone - Together you are always stronger!

Status Quo…

If you take a look at the existing initiatives in Local Commerce, most of them actually run under the label
„Local Online Marketplace“. One finds, for example, promising examples such as Online City Wuppertal, which has received much attention thanks to a thought-out concept and is often referred to as a "lighthouse" project.

However, it will also be noted that most initiatives do not allow for the purchase of products, but only for reservation and pick-up in the store. In fact, it is more about "online storefronts" or "online catalogs" and not about "online marketplaces" in the strict sense.

Local Commerce – Just A Hype? - enlarge

Admittedly, the target group addressed with by this, i. e. customers who are looking for products online to subsequently buy offline, are an important (albeit unfortunately difficult to measure) aspect regarding the benefits and success of local commerce (also called "RoPo effect" - Research Online, Purchase Offline ).

But is not it a bit too short sighted, is it not a waste of significant opportunities and potentials if you rely exclusively on this segment?
Customers are used to getting online a complete shopping experience, with pure "online shop windows" many customers will be only disappointed. In order to really reach out to the majority of potential customers, you will not be able to get around with Local Commerce by providing a full featured online marketplace :
With reservation and pickup in store, but also Click & Collect, home delivery, same day delivery + requested delivery time ...

What Makes A Local Commerce Business „Local“?

Another variation of „local Online Marketplaces“ provide nationwide providers of platforms that address the topic of "local" in such a way that they offer the customer the option of filtering / restricting the offer to retailers in the vicinity, thus rolling out a platform virtually 1:1 for different cities or regions or similar.

The future will show how sustainable these approaches are and whether the "local character" of these concepts is sufficient to provide the necessary acceptance for both customers and vendors. Or if strategies which emphasize more on the topic "locally" prove to be more effective and more successful.
Be it through a consistent localization starting with the Look & Feel about enriching the product range with other services to the consideration of other local peculiarities or by an actual local anchoring by promoters and carers from the city or the region.

Not All Approaches Will Be Successful

Setting up a successful online marketplace is not a simple project in itself, both technically and economically (see also Top 10 Reasons Why Online Marketplaces Fail). Much more so in an evolving environment where time will show what works and what does not.

Meanwhile, however, solutions and approaches are propagated that will never work economically. An example:
The operator of the local "e-commerce portal" / the "virtual mall" should be appear to the customer as the seller of the products of the participating vendors (and thus have the risk of fraud, product liability, responsibility for returns, etc. on his side). In addition, the operator should take care of the shipping (picking up the goods at the dealers + deliver the goods to the shopper!).
Portal, Mall ... one probably do not know how to call this construct. Most likely, it would probably be a normal online store where the dealer should act as a distributed warehouse!?
The whole thing should be funded by fees for the vendors as well as transaction fees.
Well, you do not have to think long to realize that this model is economically ... something "adventurous".


One thing is for sure: There is no such thing as a patent remedy for how successful a Local Commerce Business can be and there will never be.
In view of the many different approaches, it will be exciting to see what works in the future, and what does not, in which direction the various initiatives develop, which establish themselves and which fail.

If you are planning a Local Commerce project, lets get in touch. We are happy to support you with our experience from numerous online marketplace projects. And with JaJuMa-Market, we offer you a flexible Online Marketplace Software with which you are also from the technical side in every case "Ready for the future of Local Commerce".