“eBay Deine Stadt” – A sustainable model for local online marketplaces

Case Study

Background

Owner-operated bricks-and-mortar retail has come under pressure, which can be felt in many German city centers. While it was initially competition from chain stores and shopping centers, and later online retail, which captured market share, the Corona crisis has changed the face of city centers over the past two years. Many cities are trying to find answers to this and revitalize downtowns with different measures. One of these responses is local online marketplaces, which aim to make local supply visible and tie in local demand. However, the success of these initiatives has been extraordinarily low in the past. Despite extensive funding, most of the initiatives have failed and provide no added value to customers or retailers, and thus no contribution to the revitalization of city centers. Our study on local online marketplaces provides a more comprehensive insight into the topic.

The eBay marketplace thrives on the diversity of its thousands of small and medium-sized merchants. This includes a large proportion of merchants with a local retail store, which is why eBay has been committed to stationary retail for many years with various solutions and initiatives. In March 2020, for example, eBay Germany launched an extensive immediate assistance program for brick-and-mortar retailers to offer them a free sales channel despite the corona-induced lockdown. In 2020, eStrategy Consulting also developed a concept for a sustainable approach to local online marketplaces for its client eBay in an exchange with cities and municipalities, business development and city marketing organizations, trade associations, and the German Retail Association (HDE).

Objectives

The project is intended to make a contribution to stationary retail and the revitalization of city centers by analyzing the systematic problems of local online marketplaces and avoiding them in an alternative approach. These problems include, for example, the low reach of local online marketplaces, the large efforts and low benefits for retailers, and the resulting low attractiveness for customers. Many projects have already been discontinued neither before a critical mass of supply and demand could be reached. In addition to the risk of failure, the initial investment and ongoing costs of the projects were also very high for the cities.

The goal of eBay Germany is to offer cities and stationary retailers an attractive and sustainable model for a local online marketplace. eBay is to be perceived as a committed partner of retailers in the long term and, in doing so, also attract new small and medium-sized sellers and open up new opportunities for them. Cities and municipalities are to be given the opportunity to support local retail and also the city centers. In addition, as many cities as possible are to be won over for a partnership with eBay in order to further expand the model with them.

Solution

Based on an extensive market and competition analysis as well as expert interviews with local stakeholders, eStrategy Consulting developed a concept for a platform for local online marketplaces for its client eBay Germany, which is closely integrated with the eBay marketplace. The merchant can continue to operate in the eBay seller account and use all the advantages of the established online marketplace, for example, the reach or the payment procedure. At the same time, his offers are displayed on the local online marketplace and can be seen and purchased here by local customers. The commercial seller on eBay is thus automatically offered two channels – the eBay marketplace and the local online marketplace. In addition, local merchants are supported and guided to success in the first six months as part of an extensive onboarding program.

The success of the merchants is the decisive factor for why the local online marketplace within the framework of “eBay Deine Stadt” also works sustainably for the cities. In addition, eBay offers cities a technical platform that can be implemented and operated cost-effectively. In addition, eBay already brings critical mass to virtually every German city, so that the local online marketplace can be implemented very quickly. Extensive communication and marketing measures round off the concept. The concept was evaluated and presented to the customer in the fall of 2020 with municipal stakeholders, the trade association and other experts. Subsequently, the project was implemented under the management of eStrategy Consulting and was able to celebrate its go-live with the first ten cities in mid-April 2021. Click here for the eBay press release on the launch of eBay Dene Stadt.

Media coverage:

20220516eBay Deine Stadt – Pressestimmen

Results

eBay Deine Stadt is a project to strengthen bricks-and-mortar retailing by eBay Germany and the German Retail Association (HDE). Launched in mid-April 2021 in an initial ten cities, 30 cities & regions are now taking part – since the end of March 2022, eBay has also included the German capital, Berlin bei eBay [Verlinkung]. The offerings of 12,000 retailers can now be found on the local marketplaces. The solution represents a win-win-win situation for cities, merchants and for eBay. The fact that the approach works sustainably is shown both by the reactions of those responsible in the cities & regions, and by the feedback from the merchants.

In the fall of 2021, the local retail awards were presented for the first time under the patronage of the Federal Minister of Economics and Technology, Peter Altmaier. A top-class jury of experts led by Stephan Tromp (Deputy Managing Director of HDE – – German Trade Association), Boris Hedde (Managing Director of the IFH – Institute for Retail Research), Dr. Ulrike Regele (Head of Retail at DIHK – German Chamber of Industry and Commerce), Linde Scheers (CMO eBay Germany) and Jürgen Block (Managing Director of the BCSD – German City Marketing Association) analyzed the balances and campaigns of all participating cities and selected the winners in various categories. At the same time, the experts gave valuable advice on the direction and further development of “eBay Deine Stadt”.

Voices after one year eBay Deine Stadt

“eBay Deine Stadt started as a model project. Our plan was to work closely with cities and municipalities, business development agencies, politicians and associations to contribute our respective strengths to local commerce. eBay provides the infrastructure and, right from the start, a critical mass of merchants and offers. The cities, municipalities and associations perform important educational work on site. The merchants, in turn, enrich the local marketplaces with their diverse and unique offerings. Together, we have created 30 attractive local online marketplaces. The fact that 30 cities are now involved is testimony to the success and sustainability of the project.”

Oliver Klinck, Managing Director, eBay Deutschland

“We have already launched local online marketplaces in the past and also closely observed the many other models. We came to the conclusion that, in addition to a relevant number of interested merchants and the associated attractive offer, we need to win strong local partners right from the start in order to launch together with them. We can only be successful in the long term if we have regular individual discussions with our partners and continue to develop the local marketplaces together.”

Andreas Haentsch, Senior Director Home & Garden, Collectibles/Toys und Seller Initiatives, eBay Germa

“Our HDE consumer barometer fell for the sixth month in a row in May and has now reached a record low. The Ukraine war, the consequences of the Corona pandemic and inflation are putting a massive damper on consumers’ spending mood. This is hitting many small and medium-sized retailers particularly hard. They are therefore dependent on additional sales channels as well as on more visibility for their offers, especially digital visibility. The ‘eBay Deine Stadt’ project offers all this and is therefore an important support for local retail businesses.”

Stephan Tromp, Deputy Managing Director of HDE - German Trade Association

“I’ve seen many attempts to establish local online marketplaces over the past few years. And almost all of them have failed. After one year of ‘eBay Deine Stadt’ and a look at the numbers, it looks like this initiative is a positive exception. In my view, the decisive factor for success is that eBay already has a critical mass of merchants with their goods and a large customer base. At the same time, current crises and customer expectations are increasing the pressure on brick-and-mortar retailers to look for additional digital sales channels. Online marketplaces like eBay offer a comparatively fast and uncomplicated entry. Through ‘eBay Deine Stadt’, retailers gain additional local visibility.”

Prof. Dr. Gerrit Heinemann, Head of eWeb Research Center at Hochschule Niederrhein

Role of eStrategy Consulting

As part of its commitment to eBay’s immediate support program for stationary retail, eStrategy Consulting developed the concept for “eBay Deine Stadt” in the summer of 2020 in exchange with experts from cities and municipalities. For the realization of the concept the commercial and technical design was developed and based on this the sales strategy as well as the project and implementation planning were worked out. eStrategy Consulting leads the project “eBay Deine Stadt” and is in close exchange with the participating as well as many interested cities.

eStrategy Consulting coordinates the onboardings of the cities across the board with the teams within different eBay organizations and service providers. In this context, eStrategy Consulting was responsible for the identification of contact persons, the presentation of the idea and the onboarding of the cities including contractual agreements. The final step for the implementation of the concept was the project management for eBay Germany. In this context, eStrategy Consulting led the briefing and the monitoring of the technical implementation. Furthermore eStrategy Consulting was responsible for the internal coordination of onboarding of the cities and the launch of the project. At the same time eStrategy Consulting is responsible for the conceptual development of the local online marketplace.