Local e-commerce

For a long time now big tech’s model of huge choice, low costs and rapid delivery has created a moat that local shops cannot cross. However, their comparative advantage has been the local shopping experience. The convenience of being able to get something immediately, the serendipity of passing a local shop and taking a look inside, and the human connection that comes with meeting a retailer face to face.

Covid-19 has altered this as “safety” has become a new vector we all have to analyse. Global lockdowns are physically preventing us from shopping local and our concern for the wellbeing of ourselves and others is making people more cautious about returning to shopping as we knew it.

NB: The use of quotes was deliberate here as, while it’s evident that this is much safer for the customer, it’s becoming clear that the safety of delivery drivers and warehouse staff is far from certain.

So what happens to this money? Well in one scenario nothing, it sits in our pockets earning pitiful amount of interest. In another it flows directly to big tech’s usual suspects who are able to take advantage of the surging demand for online shopping.

Fortunately the cost and quality of out-of-the-box e-commerce solutions has plummeted in recent years, providing smaller retailers with a viable online solution. However, simply getting online doesn’t solve everything. As all good marketplaces know, control over the marketing channel is critical, and here smaller retailers face an uphill battle.

Local retailer discovery

If you’re restricted to using the Internet to discover local retailers you’ve got a few options, none of which are perfect.

Google isn’t going to help you find a local retailer when you do a product search. Google prioritises the same big platforms that I discussed earlier. And while this isn’t part of some big tech collusion, it is because they all view the customer in a similar way. Wide choice, low prices and fast delivery. Furthermore, Google prioritises the businesses that advertise, and, for the same reasons, this is an area where local businesses are less likely to compete. Google Maps definitely makes it easier to find stuff that’s near you in the real world, but it’s whole customer journey is centred around getting you there, not helping you uncover if that retailer also happens to have an online shop – maybe this is a trick they are missing?

Facebook and it’s suite of products isn’t going to help you either, at least not quickly. It’s probably true that the retailer you’re looking for has an Instagram account, but finding it without knowing what the retailer is called is going to take some time. It’s going to take a level of investment in uncovering who the local experts are, and working back through their feeds to be find the interesting retailers locally. Possible, probably enjoyable, but definitely not quick, and with no guarantee of available products at the other end.

It’s worth mentioning Trouva too. In many ways Trouva is tackling the problem I’ve highlighted head on, and you can even browse their directory geographically. Being able to search by location would be a nice addition, but the biggest issue is the range. Trouva is a marketplace business, not an engine for discovery. You will always be limited to the number of businesses they have managed to get on board which at close to 1,000 is pretty impressive already.

Making a connection

One of the joys of the local shopping experience is building a human connection with the people who work there. It’s possible to create genuine friendships with the people who work in the businesses around you, but assuming you don’t go that deep, the connection made by shopping local can be a simple as a smile and saying hello to a face you recognise when you walk in the door. In fact, it’s the later example of connection that copy writers all over the world have been trying to replicate in their products for decades. They know how powerful something as simple as “have a nice day” feels.

In my attempts to shop local during the lockdown I was surprised by my ability to forge connections despite being sat behind a screen when I ordered. Granted the strength varied greatly, but it was there.

Take for example a wine and beer seller on my high street. When I discovered he was selling online after walking past his shop I bought a few bits when I returned home. Within an hour someone was at my door with the wine in hand. As it turned out he was the owner and we got chatting about booze and how coronavirus was impacting him. I’ve bought a few more times off him since and popped into the shop once it re-opened. This won’t work if you want to sell all over the country of course, but if you offer a service akin to this to people within a small radius of your premises, you could build stronger ties to your community while offering more ways for locals to purchase.

Not everyone can deliver their own products though so what then? A cheese shop near me also started offering delivery, this time via bike courier. So not much face to face connection, but I was pleased a day or so after I got the cheese to find an email asking me if I liked it. And this wasn’t an automated via TrustPilot or alike, it had been written personally by someone from the shop who also suggested some other stuff I might like.

Similarly a book I ordered from local bookshop came via RoyalMail, however dropped inside was a hand written note from someone in the team thanking me for choosing them over their better funded rivals. To quote Paul Graham, small retailers can “do things that don’t scale” and this presents a big differentiator for them, even in an online context.

Local e-commerce

The desire to shop a local independent retailers is not a new one. Aside from the convenience that local shops offer, the desire to see the money you spend circulate within your local economy, and the joy for human connection when shopping are powerful forces.

As I have noted, it is possible to retain some of the human qualities of local shopping through e-commerce, however more creativity/innovation in this domain would be welcome.

The key challenge remains the significant structural disadvantages they face with regard to discovery and customer acquisition. This presents a huge problem, but one that is worthy of solving.

Daniel Bower

Blogging about platform regulation: algorithms, interoperability, kill zones as well as other bits and bobs. Read about my research, or read more about me.