In Germany’s inner cities are coming back to life. But the pedestrian zones remain far away from the rush of visitors, as they did before the pandemic. In the meantime, increasing numbers of infections are causing new worries.
Against this background of the worsening corona crisis, the online marketplace Ebay is now drawing an initial interim balance of a campaign launched in spring with the aim of paving the way for small businesspeople into e-commerce via local online marketplaces. With the support of the German Trade Association (HDE), the digital platform “Deine Stadt” was launched in mid-April in initially ten municipalities with offers from boutiques, garden centers, jewelers and other local shops.
A good four months later, the results are mixed, at least when measured against the original claims. Since the activation, according to Ebay, over 1200 commercial dealers from the cities that initially took part have opened a new online shop on “Your City”. A total of 2.7 million items have been sold there since mid-April, said an Ebay spokesman.
The numbers reflect progress, but not yet a breakthrough. In April, the deputy managing director of HDE, Stefan Tromp, said that “tens of thousands of medium-sized companies” had reservations about digitization. One of the tasks of the trade association is to convince the skeptics with low-threshold offers. According to the Federal Statistical Office, there are around 340,000 retail establishments in Germany.
Customers are switching to large platforms
So far, local online marketplaces have often failed due to limited supply. Customers often switch quickly to large platforms such as Amazon, Otto.de or Zalando or do not even look at local offers. However, many small retailers avoid the digital giants because they fear addiction. However, the local customer base is often not enough to run your own online shop economically – a dilemma.
The “Deine Stadt” portal promises merchants to solve the dilemma through standardization and nationwide distribution of the items that are listed. City portals are a good example of how the digitization of retail can succeed, said Tromp. “Corona has increased the pressure for digitization in retail enormously,” said the expert. The joint project with Ebay is proving to be a “success story that comes at exactly the right time.”
But the number of newcomers has so far been manageable. Right at the beginning, in addition to large cities such as Nuremberg, Mönchengladbach and Lübeck, there were also smaller towns and regions. A few medium-sized towns such as Marburg, Amberg and Pirmasens have been added since April. Ebays Germany boss Oliver Klinck had told WELT in April that they were “in talks with over 100 other cities” about a possible participation. “The number was correct and there have now been a few more cities that have come our way,” he said now. However, implementation in town halls takes time.
“Ebay Your City” was to be understood from the outset as a sustainable model for local trade and aimed at the long term, assured Klinck and at the same time expressed cautious criticism of the pace of decision-making by some municipalities. “If I would like the decision-making processes to run faster in some cities: Yes. Am I disappointed: No, “said the Germany boss.
Reduce distance to Amazon
Nevertheless, more municipalities are already connected than originally planned by the end of the year. The integration of classic shops and digital business is evidently progressing particularly quickly in Nuremberg. The Franconian metropolis started with 110 dealers on the marketplace, and another 400 have been added in the past six months.
“We are still in contact with more than 100 cities and hope that the great numbers we are presenting today will give us further impetus for the good conversations,” said Klinck. Ebay hopes to be able to close the gap to the market leader Amazon with its local initiative in Germany.
Although the stationary stores have been open again for months, there is nothing to indicate that the run on e-commerce will abate. While online retail is expected to skyrocket by almost a fifth to 87.1 billion euros in the current year according to the latest HDE forecast and will thus grow more strongly than expected in the spring, traditional retail will probably have to accept slight losses. Its sales could slide below the threshold of 500 billion euros for the first time.
The situation is particularly acute for boutiques, textile chains and department stores. For the stationary clothing trade, a minus of 13 percent is expected for this year, which would amount to a loss of 37 percent compared to the last year 2019, which was unaffected by the lockdown. Meanwhile, the digital clothing trade is reporting high growth rates. Market leader Zalando’s business grew by 40 percent in the second quarter.
However, there are also winners in stationary retail. At bicycle dealers, for example, the cash register rang significantly louder in the first four months of 2021, with sales up 17 percent compared to the same period in the previous year. The grocery trade was also one of the beneficiaries of the closure of restaurants and pubs, with growth of four percent. In contrast, consumer electronics and toy stores lost more than 20 percent of their business volume. Jewelers, hardware stores and furniture dealers got away with slightly smaller losses.
A closer integration of brick-and-mortar and digital sales remains urgent. According to a study by the Cologne-based EHI Institute for Retail Research, despite the Ebay model and similar initiatives, only around 45 percent of traditional retailers also sell their goods online. In addition to their own online shops, purely digital marketplaces such as Ebay are used or marketplace operators with their own sales activities such as Amazon. More recently, social networks with a sales function have been added, such as Instagram. A complete abandonment of digital distribution channels is likely to be increasingly difficult for retailers of all stripes to sustain.
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