Smart Retail in Smart Cities:

Best Practice Analysis of Local Online Platforms

Katrin Schade, Marcus Hübscher and Tanja Korzer

Institute of Urban Development and Construction Management, Leipzig University,

Grimmaische Straße 12, Leipzig, Germany

Keywords: e-Commerce, Local Online Platform, Smart City, European City, Smart Retail.

Abstract: Against the background of urban transformation processes aggravated by e-commerce, this paper discusses

chances and challenges of local online platforms. Three hypotheses are introduced. Firstly, the rapid

emergence of numerous local online platforms in various European countries is linked to the urban heritage

of the European City. Secondly, the success of these platforms depends on the integration of diverse services.

Thirdly it is argued, that platforms need to adapt to future topics of smart retail which is why a more holistic

approach is appropriate. A best practice analysis is conducted, which gives an insight into the variety and

complexity of local online platforms.

1 ADAPT OR DIE: SPATIAL

IMPACTS OF E-COMMERCE

High growth rates in e-commerce have contributed to

urban transformation processes in Europe in the last

decade (Beckmann et al., 2016, p. 8). Location-wise,

primary effects of e-commerce caused by market

leaders such as Amazon and eBay are expected to

change persisting structures in the retail sector. In

Germany alone, a close-down of 50.000 shops is

predicted until 2020 (HDE, 2016). As a consequence,

shop vacancies rise and city centers decline (fig. 1).

Figure 1: Shop vacancies in different (sub)urban settings in

Leipzig (2018), own source.

Whereas mainly small towns used to be affected,

shop vacancies in city centers in e.g. Leipzig are

already noticeable. Operation-wise, especially small

and medium-sized owner-managed retailers struggle

to get involved with omni-channel services, whereas

chain stores tend to adapt faster to trends in e-

commerce.

1.1 The Origin of Local Online

Platforms

For the last six years, diverse digital bottom-up retail

initiatives in Germany and other European countries

have been emerging. The main goal of these so called

local online platforms (LOPs) is to retain purchasing

power in the respective region, concerning only

respective local, mainly brick and mortar retailers.

LOPs network local retailers with a universal

digital platform, such as homepage or app. Some

platforms also contain location-based information,

for example event calendars or information on local

activities in the city centers. Either way, LOPs present

a multilateral approach by initiating omni-channel

services which aim to improve retailers’ perception

through customers in digital and urban space, to

survive on the market.

Probably one of the most popular LOPs within the

academic discourse that emerged in Germany is

‘Online City Wuppertal’. The platform started in

2013, funded as a pilot project of the joint initiative

Schade, K., Hübscher, M. and Korzer, T.

Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms.

DOI: 10.5220/0006844901470157

In Proceedings of the 15th International Joint Conference on e-Business and Telecommunications (ICETE 2018) - Volume 1: DCNET, ICE-B, OPTICS, SIGMAP and WINSYS, pages 147-157

ISBN: 978-989-758-319-3

147

of the German state, its counties and cities, called

‘Nationale Stadtentwicklungspolitik’ (national urban

development policy). The pilot project ‘Online City

Wuppertal’ aims at transforming stationary retail,

with the help of omni-channel services (Haderlein,

2018). The website of ‘Online City Wuppertal’

includes 59 different profiles of mainly local retailers

who have a local store in Wuppertal. For local

retailers, an advantage of the platform is that the

operator helps local retailers, who do not have an own

web shop, to sell their products online through the

website of ‘Online City Wuppertal’. The website

contains a large categorized web shop out of all the

products the participating local retailers offer, like a

local version of Amazon. Local retailers who already

have an own web shop or website can also become

members. For them, the advantage is that the platform

has an own budget for marketing that is larger than

the expected budget of a single local retailer. Thus,

‘Online City Wuppertal’ contributes to improving,

the local retailers’ perception through customers in

digital and urban space and to survive on the market.

Additionally, the platform contains a few urban

services, e.g. it informs about local events in the city

center of Wuppertal. However, the success of ‘Online

City Wuppertal’ seems to be unsteady for different

reasons, e.g. the number of customers visiting and

buying on the platform is low (Haderlein, 2018).

By now, Germany counts more LOPs than any

other country. The platforms try to follow the

example of ‘Online City Wuppertal’ or even become

more successful (CIMA, 2018). However, the

platforms differ from each other concerning their

functionalities and specializations. There seem to be

relevant differences that lead to either success or

failure of LOPs which is why the paper offers a best

practice analysis. The authors aim to analyze chances

and challenges of LOPs to offer smart retail services

in smart cities.

1.2 Aim and Scope of the Paper

To address the lack of research, a best practice

analysis of LOPs is carried out, focusing on the

chances and challenges of existing platforms. This is

done in the light of smart cities. Within the analysis,

the importance of a more holistic approach is

demonstrated. We propose three hypotheses. Firstly,

the high amount of LOPs in Europe raises the

question, why similar strategies cannot be observed

in comparable economic contexts such as North

America. We explain this by means of a literature

review of the historic development of each city model

and argue that characteristics of the European City

facilitate the emergence of local online platforms.

Whereas most platforms’ focus lies on commerce,

there are also LOPs that contain urban, especially city

center-relevant services, in addition to retail services,

such as ‘Online City Wuppertal’, e.g. they inform

about local events or list local clubs. The location

specific aspects help to distinguish cities and

contribute to their uniqueness. Introducing the

empirical analysis with the second hypothesis, we

claim that the success of local online platforms

depends on the integration of diverse services. The

strength and competitiveness therefore lies in the

location’s specific characteristics.

Currently, one notices a rise and fall of LOPs.

This might be due to the platforms’ still being in a

starting phase. Also the high number of competitors

plays a key role. We thirdly argue that local online

platforms need to adapt to future topics of smart retail

in order to survive on the market.

2 STATE OF THE ART IN

RESEARCH

At the present time only few scholars have examined

LOPs. This sections gives an overview about the

existing framework sources, starting with the

concepts of smart city and smart retail. Emphasis is

put on the spatial distribution of emerging LOPs.

Therefore, geographical patterns are not only

identified, but also tried to understand by means of

the existing academic discourse.

2.1 Future Topics of Smart Retail

The smart city approach does not primarily refer to e-

commerce. However, according to Silva et al. (2018,

p. 700) “[…] utilization of best practices and

applications of e-commerce and e-business to

escalate the city productivity is known as smart

economy. […]”. Moreover, Bakıcı et al. (2013, p.

139) define the “[…] smart city as a high-tech

intensive and advanced city that connects people,

information and city elements using new technologies

in order to create a sustainable, greener city,

competitive and innovative commerce, and an

increased life quality.” Silva et al.’s discussion of the

smart city, is based on the city of Barcelona. Both

definitions highlight a strong interaction between

smart city and e-commerce. This interaction is taken

into consideration when future topics of smart retail

are defined and analyzed. The following future topics

ICE-B 2018 - International Conference on e-Business

148

of smart retail are examined within SURTRADE

(2018), a current research project in Germany that

focuses on smart urban retail services. The future

topics will be applied later in this paper, in order to

explain the possible survival of LOPs on the market:

Integration, Usability, Community and

Sustainability.

Integration describes e-commerce interfaces

including different urban functions. Smart cities

represent diverse urban functions in their centers

apart from commerce such as gastronomy, different

kinds of services, tourist attraction activities and

others. Hence, looking at LOPs an integrated

approach needs to be adapted in order to show smart

cities’ diversity.

Usability refers to the design and accessibility of

digital services, which are going to be more

individual in smart cities and particularly e-

commerce in the future. All services should be

accessible to everyone in every location.

The third overlapping future topic is Community.

It refers to the fact that multidimensional

communication and networking in smart cities as well

as e-commerce is becoming more and more

important. Concepts of Community such as sharing

and the networking of interest groups need to be

simplified.

Fourthly, Sustainability is an overall relevant

aspect in smart cities and e-commerce concepts. One

can differ between financial, ecological and social

Sustainability (Adams 2006). When it comes to

stamina of e-commerce platforms, primarily financial

Sustainability must be regarded. Especially when

brick and mortar retail is already struggling, a

sustainable financing concept for the applying e-

commerce platform is an important issue. However,

e-commerce is not just a temporal phenomenon and

needs to be strongly adapted to brick and mortar retail

in future smart cities.

2.2 Mapping LOPs

LOPs are a relatively new phenomenon. Data, both

on concept and economic success is rare (Beckmann

et al., 2016: 10). However, a few primary studies exist

whose results are available online. In 2015, the

company CIMA Beratung + Management GmbH was

commissioned by the Bavarian Ministry of Economic

Affairs and Media, Energy and Technology and the

Bavarian Trade Association to investigate LOPs. Due

to the rapid development in the area, the project

stakeholders decided to expand the market

investigation. Data is available on the website

‘Gemeinsam Online’ (English: together online). The

high and continually increasing amount of platforms

on the website provides a comprehensive overview of

platforms in Germany. The study, however, does not

consider LOPs outside of the country. In contrast to

this, the website ‘Local Commerce’ offers an insight

into platforms in Europe and is updated regularly by

its initiator Andreas Haderlein. The website lists

related local stakeholders and provides an overview

on the strengths and weaknesses of each platform in

relation to their relevance for e-commerce. Despite

both investigations’ relevance for local e-commerce,

no comparative research of LOPs has been done so

far. Analyzing existing framework sources from a

spatial point of view, the vast majority of LOPs can

be found in European cities, with highest densities in

Germany, Switzerland, Austria and Italy. Only a

small fraction of platforms is detected outside of

Europe, such as Shop Midland, Canada. Thus, the

distribution of LOPs seems to follow a certain spatial

pattern and needs to be questioned.

2.3 The European City – Cradle of

Local Online Platforms?

LOPs emerge in several European cities. In no other

part of the world, a similar density of platforms can

be observed so far. Surprisingly, the United States of

America show a much higher level of digitalization

than the European Union, when it comes to

businesses and economics (McKinsey and Company,

2016, p. 12). Consequently, there must be another

explanation for the high number of already existing

LOPs in Europe. This section develops the hypothesis

that the emergence of digital bottom-up retail

initiatives is strongly linked to the traditions of the

European City, as an antithesis to American

urbanism.

One of the main reasons that has probably caused

the rise of LOPs is the aim to compensate loss in total

revenue of brick and mortar retail. Particularly small

and medium-sized towns are predicted to be the losers

of retail digitization (BearingPoint und IIHD, 2015,

p. 8). In spite of that, the example of Leipzig shows,

that vacancies are an issue even in Germany’s fastest

growing city (Leibert, 2017, p. 10), counting about

600.000 inhabitants and approx. increasing by 20.000

people per year. Over the last ten years, vacancy rates

in Leipzig’s city center oscillated between nine and

twelve percent (Korzer et al., 2017, p. 3). In different

urban settings persistent vacancies can be observed,

such as in greenfield shopping malls, secondary

prime locations or even high streets.

These trends apply to cities worldwide, such as in

Akure, Nigeria (Bello and Ezeokoli, 2015); the UK

Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms

149

(Hughes and Jackson, 2015) or the U.S. (Bushmeneva

2016), but the reactions differ particularly between

American and European cities. Based on theory in

urban geography, the following paragraphs outline

both city models, highlighting aspects that influence

the rise of LOPs.

The model of the American City has been

depicted by Burgess in the 1920s. His concentric zone

model characterizes the Central Business District

(CBD) as the center of economic, cultural and

political life (Jessen, 2002, p. 212). Häußermann

points out that CBDs have been mainly characterized

by commercial usages before WW2, which means

that a change of center-specific functions has taken

place since then (Häußermann, 2001, p. 249).

Particularly the process of suburbanization has

undermined existing functional structures in the city.

Based on increasing real incomes, a vast part of the

society was able to realize their American dream of

living in single-family homes in the suburbs (Hahn,

2014, p. 20). The residential suburbanization was

followed by a commercial suburbanization from the

1950s onwards (Jessen, 2002, p. 214), reinforcing the

competition between center and greenfield.

Moreover, the development of shopping malls, based

on the ideas of Victor Gruen, has been transforming

periphery-center relations since then (Hahn 2014, p.

109; see alsp Fig. 5). Thus, the degradation of city

centers in the American City is not a new

phenomenon but has been evolving since the early

1940s (Hahn, 2014, p. 74). In that respect, digitization

can be regarded as a process reinforcing the

competition between center and suburb.

Figure 2: American urbanism between CBD and suburbs,

based on Michael (2015, p. 222).

To some extent, this also applies to European

cities. However, the original conditions are different

there. In the European City, history and tradition play

a crucial role. The city center was and still is a place

of identification (Häußermann, 2001, p. 249). It

connects different functions such as living,

commerce, labor, culture and education in the same

public space (Hassenpflug, 2002, p. 43). Compared to

North America, commercial suburbanization hit

European countries not only later, their locations

were also much more controlled by planning

authorities (Klus 2013, pp. 20-21). Consequently, the

city center has been able to keep much of its

commercial function until now (Jessen, 2002, p. 220).

Nevertheless, e-commerce poses a new and additional

challenge for brick and mortar retailers leading to

decreasing sales and close-down of shops. Thus,

digitization in the European context coincides with

more or less intact retail structures in city centers

compared to American cities. Consequently, the

emergence of LOPs can be regarded as a response to

these negative outcomes from the retailer’s point of

view. However, these platforms should not be

regarded as protest. They rather try to cope with

digitization in a proactive way. Apart from that, the

rise of these platforms can also be traced back to a

broad civic consciousness in the European City. Most

of the analyzed platforms have been initiated by

means of digital bottom-up retail initiatives, e.g. by

citizens, local retailers or local IT companies.

Moreover, there is a tradition of sovereign

intervention when it comes to urban planning and

social balance in the European City (Jessen, 2002, p.

218-219). In the case of LOPs, public subsidies and a

strong cooperation with authorities play a crucial role,

always trying to balance free market economy and

preservation of European urban identities.

In summary, the aspects mentioned above

facilitate the emergence of LOPs in European cities.

Of course, models such as the European or American

City are theoretical constructs (Böhme, 2002, p. 49).

In spite of that, several common and opposite aspects

cannot be denied in both cultural areas. In a

globalizing world, the differences between both city

models seem to blur. Aspects of the American

urbanism have been taken over in Europe in the last

decades, such as shopping architecture or market-

orientation of administration. Simultaneously in

North America, city planners have proclaimed the

European model as a possible answer to the urban

problems there (Jessen, 2002, p. 223). Against the

background of Sustainability objectives, the

European City serves as a model for urban planning

and design (Hannemann and Mettenberger, 2011, p.

68). Digitization poses challenges to both continents

and requires smart answers.

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3 METHOD

3.1 Method and Background

With the thought of LOPs still being a phenomenon

of the European City but drawing a potential for other

city models such as the American City, it is still

uncertain, how platforms differ from each other and

what kind of functionalities help LOPs to survive on

the market. A best practice analysis of LOPs shall

help to analyze chances and challenges of the

platforms in the light of smart cities. The best practice

analysis of existing platforms is based on a

quantitative analysis (fig. 3).

Figure 3: Best practice analysis of LOPs, own source.

The analysis of LOPs will be completed by a

qualitative analysis, in order to get specific

information concerning chances and challenges of

best practice LOPs. The paper at hand concentrates

on findings of the quantitative analysis.

The first step of the best practice analysis is to

detect LOPs. We find evidence on different websites

(fig. 4).

LOPs are also detected by searching online with

key words in order to look for incidences worldwide.

This happens to be rather complicated because of

difficulties to find the right keywords. Since LOPs are

a new phenomenon, there are different expressions

for the same meaning. For example, in German one

can refer to “Lokale Online-Plattformen” (English:

Local Online Platforms) in the same way as “Lokale

Online-Marktplätze” (English: Virtual Local

Marketplaces). Also word combinations like “brick

and mortar retail online”, “municipal center AND

virtual AND marketplace”, “together online AND

commerce” or “smart retail service platform” are used

and translated into other languages.

Figure 4: LOPs named in this paper, own source.

Figure 5: eight best practice LOPs concerning

functionalities, tools & services and specialization, based

on Haderlein.

We find 95 different LOPs and identify 42 out of

95 platforms that stand out due to their number of

functionalities, tools and services (Haderlein 2018).

Fig. 5 displays the different functionalities and, as an

example, the the tools and services of the

functionality ‘cross-channel services’. The selection

is done by a tabular display of the LOPs with the

counted numbers of functionalities, tools and services

per LOP.

We then rank the platforms and filter eight best

practices concerning their amount of functionalities,

tools and services but also their different

organization

functions

administration

technical structure

ranking

municipal representatives

operators

retailers

number of

research objects

detailed portraits

best practices

expert interviews

name online access

Online City Wuppertal https://atalanda.com/wuppertal

Lokaso in Siegen https://siegen.lokaso.de

Wir in Günzburg https://wir-in-guenzburg.de

Shop Midland http://www.shopmidland.com

Kauf.in Essen http://www.kauf.in

FutureCityLangenfeld https://www.futurecitylangenfeld.org

Allyouneed City in Bonn https://city.allyouneed.com/de

Mönchengladbach bei eBay https://www.ebay.de/rpp/mg

imGrätzl https://www.imgraetzl.at

Shöpping.at https://www.shoepping.at

Findeling https://www.findeling.de/berlin

Atalanda https://atalanda.com

Lokaso https://www.lokaso.net/de/home/

CIMA Beratung + Management

GmbH

https://gemeinsam.online.

Andreas Haderlein https://localcommerce.info

Koblenz University

https://www.hs-

koblenz.de/rmc/fachbereiche/wirtschaft/akt

uelles/detail/_n/harvard-business-manager-

berichtet-ueber-studie-der-hochschule-

koblenz/

LOPs named in this paper

information platforms on LOPs

LOP operators

study on LOPs

https://www.frankfurt-

airport.com/de/infopool/flughafenplan.html

Frankfurt Airport Online Shopping

best practice LOPs

x out of 12 functionalities offered +

specialization

Online City Wuppertal 8 (spec.: most functionalities)

Lokaso in Siegen 8 (spec.: logistic services)

imGrätzl (Vienna) 7 (spec.: city districts)

Wir-in-Günzburg.de 6 (spec.: online advertising & communication)

shöpping.at 5 (spec.: platform of platforms)

Findeling 5 (spec.: selected vendors)

Frankfurt Airport Online Shopping 5 (spec.: certain space)

Future City Langenfeld 1 (spec.: concept of urban development)

Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms

151

specializations (fig. 6). We then focus on future topics

of smart retail in order to show how LOPs apply to

them, which is explained under 3.2.

Figure 6: functionalities and tools & services of LOPs,

based on Haderlein.

3.2 Measuring Future Topics in LOPs

Figure 7: Characteristics of future topics and way of

measurement in the best practice analysis, own source.

Concerning the smart city approach, future topics of

smart retail investigated by the research project

SURTRADE (2018) were named in section 2.1. Fig.

7 summarizes the characteristics of each future topic.

In the quantitative analysis we use the future topics to

explain chances and challenges of LOPs in relation to

smart retail services. Therefore, fig. 7 also contains a

measurement to what extent the future topics are

considered by the eight best practice LOPs.

4 ANALYSIS OF LOCAL ONLINE

PLATFORMS

Based on the method described in the section before

this chapter presents the empirical findings. Firstly,

the structural similarities and differences of selected

42 LOPs are outlined. Secondly, the eight best

practice LOPs will be measured concerning future

topics of smart retail.

4.1 More than Shopping?

In the paper, it was argued that the emergence of

LOPs is strongly linked to the characteristics of the

European City. Apart from this spatial perspective,

platforms’ specialization in the light of functionalities

and services are also a relevant aspect. The platforms

started to emerge in 2011 (fig. 8). Particularly from

2012 on, a rising growth rate in total start-ups can be

observed each year, peaking in 2015. After that, the

growth rate slowed down again. In addition, a

constant number of close-downs can be observed

from 2015 on.

Figure 8: Start-up of online-platforms, based on Haderlein

(2018).

There is a possible relation between start-ups and

the product lifecycle model of Vernon (1966, p. 16).

The model identifies five stages of product

development: introduction or launching phase,

growth, maturity, saturation and decline. During the

first phase of introduction, a high number of products

from different companies emerges. For reasons of

competitiveness, not all products persist on the

market. When it comes to LOPs, a similar conclusion

no. functionalities

1 check-out & payment

2 cross-channel services

3 mobile services

4 digital infrastructure

5 customer loyalty

6 logistic services

7 moderation & project management

8 online advertising & communication

9 promotions

10 services for vendors

11 social media

12 advertising & communication (offline)

Functionalities of LOPs

Tools and Services of the functionality "cross-channel services"

Check & Reserve

Click & Collect

Kaufnah (finding products of local vendors)

brand finder

product finder

shopping-tours (online planning tool)

Integration urban functions, for example notification of

events in the city, information apart from local

retail in the respective region

measurement: available / partially av. / not av.

Usability open accessibility, digital services in the form of

categorization of products and stakeholders,

compatibility with different digital devices

(mobile, laptop, computer)

measurement: open accessibility: yes / no;

digital services: available /partially av. / not av.;

compatibility: all / two / not

Community sharing concepts, B2B+B2C+C2C communication,

number and activity of platform stakeholders

measurement: sharing: yes / partially / no;

B2B+B2C+C2C: all / two / one / no; number of

stakeholders: more than 3 / 2-3 / 1; activity of

stakeholders: all / more dimensional / one dim.

Sustainability social, ecological, financial/economical

measurement: available / partially av. / not av.

2011

2012

2013

2014

2015

2016

start-ups

close-downs

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can be drawn. Of course, these platforms do not

compete with each other directly due to their location-

based approach. Still, without public funding,

platforms need to perform in a financially sustainable

way in order to survive on the market. Difficulties

might arise due to a lack of professionalism,

acceptance or integration. Considering LOPs as

products in a lifecycle, it can be pointed out that their

launching phase is still ongoing. In this stage of trial

and error, a strong market movement is still to be

expected. In spite of that, several companies started

exporting their business models to various cities,

namely Atalanda and Lokaso competing for

leadership on the German market.

Apart from the numeric monitoring of the

platforms, structural similarities and differences were

analyzed beneath 42 profiled LOPs. Firstly, in most

of the platforms, communication takes place in a one-

dimensional meaning, i.e. vendors utilize platforms

by providing information to the customer. Contrary to

that, a mutual exchange between retailers and

customers or a link between customers does rarely

take place. In Kauf.in Essen for example, this is

exactly the case. Although the platform focuses on

promoting products no communication between

involved players takes place which can be considered

as one of the reasons for its current closure.

Secondly, few platforms integrate urban functions

apart from commerce. Of course, retail is one of the

main motivations for LOPs to emerge. However, the

success of these platforms also depends on the overall

attractiveness for their users, which might increase by

providing different services. While Lokaso in Siegen

currently shows growing sales without integrating

functions apart from commerce, other platforms such

as FutureCityLangenfeld try to draw a complete

digital image of the urban.

Thirdly, platforms tend to specialize in one

function, which is considered as a strategy to develop

and apply expert knowledge and to offer professional

services. The example Allyouneed City in Bonn

specializes in logistics, providing highly

sophisticated services, for example a delivery-time

within 120-minutes.

Fourthly, in most of the platforms a lack of active

participation of local stakeholders can be identified.

However, this is crucial for a platform that needs to

develop persistent structures. Networks and

integration contribute to the acceptance of platforms,

in addition to stationary shopping. Only multiple

stakeholders are able to represent the plurality of the

urban. Mönchengladbach bei eBay, a local platform

using eBay’s infrastructure, may enjoy high

popularity due to its brand, but it fails to connect

urban stakeholders.

LOPs are still in the phase of introduction. Their

success is difficult to measure solely from an ex-post

perspective. Considering the constraints of such

analysis, a representative survey conducted by

Koblenz University revealed that platforms did not

significantly increase sales for most of the 200

interviewed retailers. This illustrates the difficulties

that these platforms face, especially in their initial

phase (Reimann 2018, n.p.). In order to work

successfully, platforms have to be designed in a

financially sustainable way, provoking daily visits of

their customers and addressing different target

groups.

4.2 Smart Retail in Smart Cities

In section 2.1, Integration, Usability, Community and

Sustainability were defined as future topics of smart

retail. In order to find out about LOPs chances and

challenges to survive on the market, the eight best

practice LOPs are measured concerning their

consideration of the future topics in this section. Of

particular interest are similarities and differences of

LOPs, specific examples will be given.

Integration of LOPs can be divided into two

categories. First, platforms were viewed with regard

to their inclusion of diverse stakeholders. Second,

functionalities and services that went beyond

commerce in the light of other city-center relevant

functionalities, were identified. It is noticeable that

the platforms differ to a great extent in the

involvement of number and type of stakeholders.

Commonly, they involve local stakeholders to

guarantee the projects’ funding on the one hand, and

possibly, to build credibility among interest groups,

on the other hand. Frequently, projects are financed

from different sources. It is not uncommon for the

federal state, the city and the operator to pay costs that

can only be partially transferred to the participating

vendors. Even though local stakeholders are involved

in financing the project, it is not clear to what extent

they are in fact actively involved in the project’s

content. They might merely be advocates or donors or

both. Typically, local stakeholders are respective

states, city administrations, chambers of industry and

commerce, city marketing associations, private

associations, restaurateurs, banks and other service

providers, for example in the field of logistics and

others. Some platforms are even involved in regional

initiatives such as marketing campaigns like ‘buy

local’ or ‘Heimat shoppen’ (English: home town

shopping), in which respective stakeholders often

Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms

153

firstly get to know each other. However, from the

quantitative results, initially no conclusions can be

drawn from the amount of stakeholders on the success

of the respective platforms because this would require

a network analysis. Considering that, the Integration

of other city-center relevant functionalities beyond

commerce are regarded and differences are

determined. Most platforms focus solely on

commerce associated with optimizing omni-channel

services. There are a few platforms, such as Wir in

Günzburg, which illustrate a local event calendar,

gastronomy and an overview of private associations

on site. Also, there are few examples such as imGrätzl

from Vienna in Austria, which do not consider

commerce as being independent. The operator

understands commerce in a neighborhood-based

approach which is similar to the functional,

multifaceted structure of a neighborhood, without

focusing on commerce itself.

Usability can be divided into three categories.

First of all, it is important to which extent respective

platforms are compatible to different target and

interest groups. In this regard, it is interesting,

whether people are capable and therefore willing to

use the platform. This can, for example, depend on

quantitative factors such as age, gender, family

situation, work, education, but also habits, disabilities

or specific everyday situations. Secondly, Usability is

determined by the website design, i.e. clarity, help

and contact details, comprehensiveness of product

categories, search settings and other special features.

Thirdly, the compatibility of various devices is

essential for the shopping experience. Overall, most

LOPs are well structured. Frequently, shopping is

divided into categories such as fashion, electronics or

books, each of which can be subdivided. Most

platforms proof to be clear and relatively easy to use.

There is a lack of detailed product descriptions, so

that the desired product is sometimes assigned to a

wrong category or to not only one but several

matching categories. Here, an improvement must be

achieved in the future. Differences were investigated

in terms of website presentation. The arrangement of

individual search areas or applications are only partly

well-placed. As a result, the time required to navigate

the respective platforms increases and reduces the

chance of re-use at the same time. A particularly

creative website presentation can be achieved for

example via so-called “gamification”. This term is

defined as “a process of enhancing a service with

affordances for gameful experiences in order to

support user’s overall value creation.” (Huotari and

Hamari 2012, p. 19). Non-local retail platforms such

as Mister Spex (https://www.misterspex.de) already

apply this. The exclusive online retailer gives the user

the opportunity to try on different glasses with the

help of the camera of one’s electronic device. Most

platforms still have to catch up when it comes to

gamification, in order to be competitive. Only

‘Frankfurt Airport Online Shopping’ uses a map of

the airport area. The visitor receives information

about all kinds of interesting airport services besides

shopping, by clicking on different fields in the map.

The website could still improve introducing more

gamification elements. Not all LOPs are optimized

for mobile devices, like smartphone, pad or computer.

Hardly any platform has developed other applications

such as apps, which might have a marketing effect

and would contribute to cross-channel measures.

Most platforms have help and contact options, some

even have chatbots. Lokaso in Siegen integrates a

personalized assistance called ‘die gute Fee’

(English: the good fairy). Most platforms show

similar features regarding Usability but few special

features could be found. There is, for example, the

shipping calendar on shöpping.at, which allows

customers to determine the time of the goods’

delivery. In general, the more individual a page is

designed, the more likely the platform will be re-used.

While some processes become more

individualized, there are also future topics dealing

with processes that encourage Community

participation. From an operator’s perspective,

business to consumer communication is important

(B2C). This entails that the company, be it in the form

of the platform operator or in the form of the vendor,

can get into contact with the consumer in order to

initiate or improve processes. An example is the use

of chatbots, which encourage the customer to

communicate with the operator. Another example is

the connection of platforms to social media. Vendors

put information online for the consumer. The social

media website Pinterest stands, among other things,

for B2C communication. A local online platform, that

uses Pinterest, serves to enable the customer to select

the vendor community that he wants to follow. The

platform Findeling can be mentioned here. LOPs also

encourage business to business communication

(B2B). This includes, in particular, the provision of

vendor training, for example on how to use omni-

channel features, which are carried out by the

platform operators and are offered on many LOPs. So

far, there are hardly any platforms with the possibility

to connect customers (C2C). An exception is the LOP

imGrätzl. On this platform, vendors, residents and

other stakeholders connect with each other in the

community hub. They can share ideas through

various channels, including newsletters, Facebook

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and blogs. Also, imGrätzl is probably the only

platform that enables sharing. Other platforms are

geared to the revenue of the participating merchants

and do not work in this regard. However, multi-

dimensional communication can have a positive

effect on the multiple use of the platform. For

example, the large-scale omni-channel company

Tchibo (https://www.tchibo-share.de) is already

trying to tie customers by renting children’s clothing.

This effect of sharing is considered as a separate

future topic here, under the term Sustainability.

In terms of Sustainability, a distinction can be

made between financial, ecological and social

aspects, whereby the three forms often overlap

(Adams, 2006, p. 2). As mentioned before, Tchibo is

testing a sharing concept on its website. The renting

of children’s clothing has a social and a financial as

well as an ecological aspect. While parents can buy

used clothes, they save money and contribute to the

decrease of producing new energy-consuming goods

at the same time. Also some of the LOPs pursue social

Sustainability. In Siegen, for example, Lokaso is

supporting a project called “Zeitungspaten für

Schüler” (English: Newspaper Sponsors for

Students), whereby students in Siegen can receive

daily newspapers free of charge. Further fundraising

events can be found on a few other platforms. The

topic of ecologically sustainable delivery services is

often discussed and implemented, which concerns

both the consumption of materials and the delivery of

goods. This is still a relatively new territory for LOPs

but some have already started to use cargo bikes or e-

cars, for example. Another interesting project is

“Raumteiler” (English: room divider) at imGrätzl,

which can be understood as a cooperation with a

property developer to revitalize vacant spaces in the

city districts. So far, this contribution to sustainable

urban development is unique among LOPs.

Concerning Sustainability, the platforms still have to

catch up. Especially the issue of CO2-free and

resource-conserving delivery should be put on the

agenda more strongly to further support smart retail

in the future.

The analysis of eight best practices based on the

future topics of smart retail describe LOPs’ status quo

and their chances to survive on the market. Since

LOPs are still in the launching phase, further

development remains to be awaited and should be

analyzed.

5 CONCLUSION: HOLISTIC

APPROACH AS A FACTOR OF

SUCCESS

In this paper, three hypotheses concerning a

quantitative competitor analysis of LOPs are

introduced. Therefore, future topics of smart retail

were defined, linking e-commerce and the smart city

approach. Within the first steps of the analysis it is

shown that the search of platforms by definition is

difficult and requires further research. Still, 95 LOPs

are found and spatial disparities among those are

identified which leads to the hypothesis that the

development of LOPs is strongly linked to the

characteristics of the European City. Further research

has to address reasons for availability or lack of

platforms within various European countries and also

on- and offline spaces within respective regions.

Beside commerce, other center-relevant functions are

identified as possible success factors of 42 profiled

LOPs, which is expressed in the second hypothesis.

Few LOPs tend to integrate other functions, which

might be the result of the fact that platforms are in a

launching phase, i.e. means they are still developing.

In the third hypothesis, future topics of smart retail

are applied to eight best practices of LOPs. Large

gaps of development and crucial differences were

identified among integrated Community features and

ecological Sustainability, especially when it comes to

goods delivery. Similarities were mostly striking in

terms of Usability concerning platform design and

clarity, even though background product descriptions

ought to improve. Overall, the research refers to a

more holistic approach of LOPs which also takes into

account logistics, IT, urban development and

business, since smart retail covers several aspects.

Based on the analysis conducted, a set of factors of

success can be identified (fig. 9).

Figure 9: Factors of success of local online platforms, own

source.

•

Platforms are networks. Bottom-up projects are more likely to be

successful than top-down initiatives.

In order to address diverse target groups, platforms should

integrate urban functions.

Communication needs to be multidimensional to enable

networking.

In structurally weak regions, public funding is particularly

necessary.

Public funding helps, but a stable financial model is indispensable.

factors of success

Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms

155

The quantitative research approach that has been

chosen for this study offered a comprehensive

overview on existing platforms. In that respect,

literature reviews and desktop research were the main

instruments. According to their methodological

constraints, no in-depth portraying was possible. In

order to gain knowledge about structures and

organization of platforms, a qualitative analysis has

to be done. Moreover, the competitor analysis carried

out so far needs to be considered as a snap-shot,

observing a certain status quo. This neglects the fact

that the market for LOPs is currently moving at a vast

pace. The results also show the requirement to

redefine the scientific understanding of platforms,

since the growing variety leads to blurred definitions.

This paper argues, that the emergence of LOPs is

strongly intertwined with the European City.

However, further analysis needs to be done in order

to understand prevailing spatial disparities. A contrast

cannot only be identified between Europe and North

America. Platforms currently emerge particularly in

Central Europe, e.g. in Germany, Austria and

Switzerland, but also in Italy, which leads to the

question why these countries are currently the leaders

on the market. Apart from that, even within these

countries stark spatial contrasts can be observed when

it comes to the distribution of platforms, opening up

areas for further research.

Considered as a field of research, LOPs are

relevant from different disciplines’ perspectives. Of

course, commerce and business belong to the most

relevant aspects. Due to its smart approach, IT is a

further central aspect, providing necessary

infrastructures. As platforms redefine local

organizations between producer, retailer and

consumer, logistics is another discipline of

importance. Last but not least, the research object

addressed in this paper impacts spatial reorganization,

requiring an urban geography approach for a better

understanding of LOPs.

It remains uncertain whether LOPs as possible pre-

forms of smart retail service platforms will prove to

be viable in the future. The development and

feasibility must be examined individually for each

location, as this may be the real strength of urban

retail locations in the future.

ACKNOWLEDGEMENTS

This research and development project is funded by

the German Federal Ministry of Education and

Research (BMBF) within the program “Innovations

for Tomorrow’s Production, Services, and Work” and

managed by the Project Management Agency

Karlsruhe (PTKA). The authors are responsible for

the contents of this publication.

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