Marketplaces: a solution to the digitalization of local businesses?

Summary

In 2019, 49% of Europeans considered that consuming locally would support the economy. In France, this figure rises to 68% according to a study by IPSOS for E.Leclerc on new consumption, conducted in April 2020. A societal change in consumption is taking place! The slow consumption (local, ethical …) takes the place of the fast consumption, based on an industrial model.

As you can imagine, the health situation and the repeated confinements have greatly contributed to increase this percentage. All local businesses found themselves in the same situation and faced the same question: how to sell their products in a containment  situation if their business cannot welcome customers? The answer: digitalization.

COVID crisis, a booster of digitalization and slow consumption

The increase in local consumption does not date from the containment. This trend was already present, between the problems of transporting certain goods, the long delivery times and the greater awareness of ecological problems in recent years. The society wants to consume ethically, responsibly and locally in short circuits.

Initially focused on food, the desire to consume locally on other products appeared later to support the local shops economically.

Confinement was the trigger for the digitalization of many local businesses. Many merchants already had a storefront site, but no e-commerce solution. In this case, the marketplace model, which allows to centralize a large quantity of products, is particularly adapted, because it allows a better visibility, whether it is for small or large merchants.

The digitalization of local businesses

According to the Confédération des Commerçants de France, there are 600,000 independent food and non-food shops in France, most of them local. There is therefore a great opportunity for the creation of local marketplaces.

Several models of local marketplaces are already present on the market. We can mention Cocote, launched in 2017 first as a price comparator for local products, to become in 2020 a committed eco-responsible marketplace of products made in France with a wide range of categories. Consumers can shop at multiple merchants at the same time, with the option of collaborative delivery that puts different users in contact with each other to agree on delivery arrangements in exchange for a fee. This can be between two buyers or between a buyer and his seller.

In the same operation, you have Mon Petit Ecommerce, created in 2018 for local food businesses and expanded to non-food business during containment. Containment that allowed them to set up a collaboration with the Val d’Europe agglomeration that gave birth to Mon Petit Ecommerce au Val d’Europe.

A free and voluntary alternative was also launched in March 2020. Founded by Arnaud Lemercier, the Faire mes courses platform has succeeded in attracting no less than 12,270 merchants and reaching 23,528 cities in just a few months.

We can therefore say that the interest and viability of a marketplace model for local businesses is no longer to be proven. Several other projects along the same lines have been created in recent years, such as Epicery, which counts Monoprix among its shareholders, Ma ville Mon shopping, which is a subsidiary of La Poste, and Pour de bon, Ollca, Boutigo, Locavor, and the latest, the mobile application The-ring.io.

All together, they don’t even represent 1% of local businesses in France. This shows that everything is to be done in this market and that there is a real opportunity for penetration.

Marketplaces, the digital solution for local businesses in cities

In addition to general marketplaces, cities are starting to use this digital solution to promote their local businesses. Confinement has greatly contributed to the democratization of e-commerce via marketplaces offering cities the possibility to give more visibility to all their businesses.

This is the case, for example, of the city of Alès which, although of the Covid 19 crisis, launched the marketplace Ales of Course in April 2020. It counts 156 merchants, offers the sale of physical products but also services and offers click & collect, home delivery or relay points. The platform also offers solidarity vouchers allowing consumers to support the businesses in their towns. This feature is completely in line with the current trend to consume locally to support the local economy.

The cities of Roanne and Montélimar have also set up their platforms which are respectively Achetez en Roannais and Hello Montelo. The particularity of Hello Montelo is that it makes the deliveries by bike when the orders are for the city of Montélimar. Therefore, until the end of the process, the marketplace is a part of the responsible consumption

Local marketplaces have great potential for development

It may be counter-intuitive to associate local marketplaces with European expansion, but it is possible. La ruche qui dit oui is a good example. Created in 2011 by Guillaume Chéron, this marketplace aims to be local, fair and promotes short circuits. Initially based in Toulouse, it is now present throughout Europe (France, Belgium, Germany, Spain, the United Kingdom, Italy, the Netherlands, Switzerland, Denmark, etc.) with nearly 10,000 registered producers and 1,500 click and collect points. Based on a commission-based business model, the platform grants itself 20% on each order placed.

This expansion on a European level clearly shows the development potential of these local marketplaces.

Conclusion

There is a lot to be done in the local business sector, the potential for market penetration is very high. The most present platforms today are in B2C, but B2B is also to be exploited. The sector is only at the beginning of its digitalization. As you can see, the e-commerce marketplace model meets the constraints of these businesses by offering a new distribution channel but also because it’s in line with the new eco-friendly consumption habits.

It is now up to you not to miss the boat and to start creating your local marketplace.

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