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Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms 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 Whereas mainly small towns used to be affected, shop vacancies in city centers in e.g. Leipzig are IMPACTS OF E-COMMERCE already noticeable. Operation-wise, especially small and medium-sized owner-managed retailers struggle High growth rates in e-commerce have contributed to to get involved with omni-channel services, whereas urban transformation processes in Europe in the last chain stores tend to adapt faster to trends in e- decade (Beckmann et al., 2016, p. 8). Location-wise, commerce. primary effects of e-commerce caused by market leaders such as Amazon and eBay are expected to 1.1 The Origin of Local Online change persisting structures in the retail sector. In Germany alone, a close-down of 50.000 shops is Platforms predicted until 2020 (HDE, 2016). As a consequence, For the last six years, diverse digital bottom-up retail shop vacancies rise and city centers decline (fig. 1). 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 Figure 1: Shop vacancies in different (sub)urban settings in 2013, funded as a pilot project of the joint initiative Leipzig (2018), own source. 147 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 Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved ICE-B 2018 - International Conference on e-Business of the German state, its counties and cities, called and argue that characteristics of the European City ‘Nationale Stadtentwicklungspolitik’ (national urban facilitate the emergence of local online platforms. development policy). The pilot project ‘Online City Whereas most platforms’ focus lies on commerce, Wuppertal’ aims at transforming stationary retail, there are also LOPs that contain urban, especially city with the help of omni-channel services (Haderlein, center-relevant services, in addition to retail services, 2018). The website of ‘Online City Wuppertal’ such as ‘Online City Wuppertal’, e.g. they inform includes 59 different profiles of mainly local retailers about local events or list local clubs. The location who have a local store in Wuppertal. For local specific aspects help to distinguish cities and retailers, an advantage of the platform is that the contribute to their uniqueness. Introducing the operator helps local retailers, who do not have an own empirical analysis with the second hypothesis, we web shop, to sell their products online through the claim that the success of local online platforms website of ‘Online City Wuppertal’. The website depends on the integration of diverse services. The contains a large categorized web shop out of all the strength and competitiveness therefore lies in the products the participating local retailers offer, like a location’s specific characteristics. local version of Amazon. Local retailers who already Currently, one notices a rise and fall of LOPs. have an own web shop or website can also become This might be due to the platforms’ still being in a members. For them, the advantage is that the platform starting phase. Also the high number of competitors has an own budget for marketing that is larger than plays a key role. We thirdly argue that local online the expected budget of a single local retailer. Thus, platforms need to adapt to future topics of smart retail ‘Online City Wuppertal’ contributes to improving, in order to survive on the market. the local retailers’ perception through customers in digital and urban space and to survive on the market. Additionally, the platform contains a few urban 2 STATE OF THE ART IN services, e.g. it informs about local events in the city center of Wuppertal. However, the success of ‘Online RESEARCH City Wuppertal’ seems to be unsteady for different reasons, e.g. the number of customers visiting and At the present time only few scholars have examined buying on the platform is low (Haderlein, 2018). LOPs. This sections gives an overview about the By now, Germany counts more LOPs than any existing framework sources, starting with the other country. The platforms try to follow the concepts of smart city and smart retail. Emphasis is example of ‘Online City Wuppertal’ or even become put on the spatial distribution of emerging LOPs. more successful (CIMA, 2018). However, the Therefore, geographical patterns are not only platforms differ from each other concerning their identified, but also tried to understand by means of functionalities and specializations. There seem to be the existing academic discourse. relevant differences that lead to either success or failure of LOPs which is why the paper offers a best 2.1 Future Topics of Smart Retail practice analysis. The authors aim to analyze chances and challenges of LOPs to offer smart retail services The smart city approach does not primarily refer to e- in smart cities. commerce. However, according to Silva et al. (2018, p. 700) “[…] utilization of best practices and 1.2 Aim and Scope of the Paper applications of e-commerce and e-business to escalate the city productivity is known as smart To address the lack of research, a best practice economy. […]”. Moreover, Bakıcı et al. (2013, p. analysis of LOPs is carried out, focusing on the 139) define the “[…] smart city as a high-tech chances and challenges of existing platforms. This is intensive and advanced city that connects people, done in the light of smart cities. Within the analysis, information and city elements using new technologies the importance of a more holistic approach is in order to create a sustainable, greener city, demonstrated. We propose three hypotheses. Firstly, competitive and innovative commerce, and an the high amount of LOPs in Europe raises the increased life quality.” Silva et al.’s discussion of the question, why similar strategies cannot be observed smart city, is based on the city of Barcelona. Both in comparable economic contexts such as North definitions highlight a strong interaction between America. We explain this by means of a literature smart city and e-commerce. This interaction is taken review of the historic development of each city model into consideration when future topics of smart retail are defined and analyzed. The following future topics 148 Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms of smart retail are examined within SURTRADE high and continually increasing amount of platforms (2018), a current research project in Germany that on the website provides a comprehensive overview of focuses on smart urban retail services. The future platforms in Germany. The study, however, does not topics will be applied later in this paper, in order to consider LOPs outside of the country. In contrast to explain the possible survival of LOPs on the market: this, the website ‘Local Commerce’ offers an insight Integration, Usability, Community and into platforms in Europe and is updated regularly by Sustainability. its initiator Andreas Haderlein. The website lists Integration describes e-commerce interfaces related local stakeholders and provides an overview including different urban functions. Smart cities on the strengths and weaknesses of each platform in represent diverse urban functions in their centers relation to their relevance for e-commerce. Despite apart from commerce such as gastronomy, different both investigations’ relevance for local e-commerce, kinds of services, tourist attraction activities and no comparative research of LOPs has been done so others. Hence, looking at LOPs an integrated far. Analyzing existing framework sources from a approach needs to be adapted in order to show smart spatial point of view, the vast majority of LOPs can cities’ diversity. be found in European cities, with highest densities in Usability refers to the design and accessibility of Germany, Switzerland, Austria and Italy. Only a digital services, which are going to be more small fraction of platforms is detected outside of individual in smart cities and particularly e- Europe, such as Shop Midland, Canada. Thus, the commerce in the future. All services should be distribution of LOPs seems to follow a certain spatial accessible to everyone in every location.
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