E-Collaboration Among Indies Aims to Fight Big Chains

Discussion
Sep 11, 2012

For independent retailers without the means to conduct e-commerce competitively, being able to offer seamless online shopping and delivery could be deemed Utopian. But self-described growth and innovation consultants, Inzenka, have teamed with Unilever, supply chain consultants Sequoia, brand management and packaging consultancy Pi Global and eziserv technology suppliers to test just such a facility in the small English town of Hereford prior to a nationwide rollout.

While normally working with large blue chip corporates, London and New York-based Inzenka were asked to be part of the OpenHighStreet project in order to create "a new differentiated venture into the market based on validated unmet consumer and retailer needs."

OpenHighStreet lets consumers browse multiple indie retailers online, comparing prices, examining products with a webcam, and discussing them using webchat. A single payment is taken for all purchases and a single delivery or collection organized. As soon as products go into the shopping cart, a message shows the next available delivery time. For collections, a local center will offer a choice of time slots.

The Daily Telegraph described a "virtual high street" charging flat commissions to businesses that can’t afford to run their own websites. Funding comes from the government’s technology strategy board plus private sector backers such as Unilever.

Inzenka’s Aby Handler told RetailWire the proposition’s highlights are offering consumers quality, trust and the personal touch from the comfort of their home as well as "an aggregated delivery at a convenient time for a flat fee." Local independent businesses gain "the platform to grow and compete with the large retailers."

He added, "Initially our focus is purely the U.K. but once we fully develop the innovative informed logistics infrastructure with the right partnerships and franchisee models/network, there will be benefits to expand this beyond U.K. to the E.U. and U.S. This might be fast-tracked if we see increased franchisee and partnership demands from abroad."

Facebook and Twitter will be used to solicit comments and suggestions from both shoppers and retailers prior to national rollout.

Does aggregating local independent shops in a single e-commerce site hold potential in the U.S.? How would such as program work ideally in the U.S.? Does it offer a competitive solution against bigger online players?

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17 Comments on "E-Collaboration Among Indies Aims to Fight Big Chains"

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Adrian Weidmann
BrainTrust

This is an innovative idea and great use of technology. This will offer accessibility and awareness to small independent retailers and artisans. I hope to read about the success they’ve achieved in the months to come. An independent online coop is not going to become a competitive solution against the likes of Amazon, but it should certainly offer local specialties a global ‘endcap’ for products and services. It may be a way to revitalize and leverage rural economies and specialties.

Ken Lonyai
BrainTrust

Back in the ’90s, there were all kinds of attempts at online shopping malls — aggregate destinations for small sellers. This sounds like the 2012 version of that and it sounds like it has little more benefit for small retailers. If you’re so small that you have no budget to hire competent e-commerce developers/strategists and just want a presence managed for you, this sort of thing is better than nothing. If you’ve worked hard to develop a unique brand identity for your store, cultivated clientele beyond local customers, want control of how you present products and how YOU interact with YOUR customers, why would you squander all that for a one size fits all solution — local or not?

Seemingly, this is designed for the benefit of the creators more than for any local business.

Max Goldberg
BrainTrust

Portions of this concept were tried by numerous e-tail aggregators in the late 1990s and they all failed. Small retailers did not like having their products side by side with competitors’ in a shopping environment that they could not control. In addition, there were customer service problems. These issues have not gone away.

It’s not difficult for any retailer to have ecommerce capabilities. Many hosting and logistical solutions are offered. Also, e-tail may not be a practical use of time and resources for many small retailers. The pros and cons need to be carefully considered before making the leap.

Gene Hoffman
Guest
Gene Hoffman
4 years 9 months ago

Many things, including a single e-commerce site, might hold potential for independent grocers, except for unrelenting fate: timely evolution. Nonetheless, it’s worth trying.

The independent grocer, not blessed with endless, vital resources, now appears to be like an old soldier and is fading away — save for the truly unique ones such as Woodman’s.

Ben Ball
BrainTrust

Giving independent retailers a more prominent presence online is good of course. And localizing it to a specific geography or region would certainly make it more convenient. But this sounds like a “customized version” of Amazon or eBay. Do we really need another one?

Gene Detroyer
BrainTrust

This is an excellent idea with huge hurdles to overcome…

1. Once I go to the site, can I shop for the item I am looking for, or must I shop the merchants individually? If I have to shop the merchants individually it fails.
2. Can I have free delivery and free returns? Once this gets going, those elements will be standard in e-commerce.
3. Do I have single point customer service? If so, will customer service be able to speak for all the retailers in one voice?
4. Can they break through to power Amazon and their rivals? If I want a particular product, I go to Amazon. There is a 90% plus chance they have. If they do, I go no further. Why would I go to a site that reduces my chance of shopping success?

Doug Fleener
Guest

I don’t see it. You’re not going to beat Amazon at its own game.

Most independent retailers should use e-commerce as a way to create incremental sales with their current customer, or to create new ones. If not, you’re just trying to compete as a commodity, e.g. Amazon and Walmart.

As Drucker said, “The purpose of business is to create and keep a customer.” I don’t think being part of an aggregated independent market achieves that.

W. Frank Dell II
BrainTrust

The concept of grouping different retailers together online has been discussed and tested many times. Amazon and eBay have been working in this area, but mostly to bring smaller retailers together. The real issue has been the execution.

To use a FedEx or UPS for delivery defeats the local retailer advantage. To have a driver go store to store picking up the merchandise just increases an already expensive delivery process. Retailers must centrally locate inventory which has been a major hurdle. Additionally there must efficient picking, accurate inventory and efficient delivery. All can be accomplished.

Martin Mehalchin
BrainTrust

I think this is a good concept in general. Etsy has done something similar for independent craftspeople and I could see a platform for unique, independent shops working on a regional basis. The involvement of Unilever in OpenHighStreet indicates that it may be more focused on grocery and drug including products that are widely distributed elsewhere; so it’s harder to see what the value for the consumer is. Also, having 4 different companies involved in the initiative is going to make it very difficult to execute well.

Matt Schmitt
BrainTrust

I doubt that an aggregation of independent retailers holds much promise in competing effectively with the big brands. Even with the downside risk of relying too much on Amazon, that’s still probably the best way for indies to leverage scale and audience.

Lee Kent
BrainTrust

This sorta spells AMAZON or even EBAY to me and they have figured out this model. Not sure how else to do it better and not sure this model will either. I’m all for giving the smaller retailer a play, but I’m also thinking the Amazon and eBay models do that too.

gordon arnold
Guest
The IT industries largest enterprise systems are strangled simply by the fact that they are a single minded vision of previously proven structures. Community systems developed by a group of like businesses working with a group of talented progressive IT businesses will create many new e-commerce business advantages, just as they have done in the past. What typically gets in the way is the misunderstanding of ownership with regards to software, reports, application templates and of course data. Success will follow when the pivotal membership of vendors combine and devise and incorporate a marketing plan that secures the interests and investments of the individual companies. The best plans have structured secured flexibility to add and remove participants from the vendor and business sides seamlessly. With these protections in place, groups of intelligent successful individuals will freely contribute to the benefit of the system. Hence, innovative creativity will follow and new ideas will be put into the e-commerce collective sites. As a body there is a collective ownership and responsibility to keep it fun and easy to use by the consumer. With so many interests involved, there is rarely a shortage of individuals willing to test the system improvements. However, developments… Read more »
Jonathan Marek
Guest

It isn’t clear to me what the brick-and-mortar store presence adds to this concept. Without deep and integrated reverse logistics capabilities, the band of small retailers can’t capture the return-to-store benefits of being multi-channel. Their cost base remains higher than “pure play” e-commerce retailers. And they risk taking their eye off running their stores most effectively.

Craig Sundstrom
Guest

“…lets consumers browse multiple indie retailers online, comparing prices, examining products…charging … commissions to businesses that can’t afford to run their own websites.”

There’s been a site like this for a long time: it also “aggregate[s] local independent shops,” offers online payment, various standard polices and guarantees, etc. It’s called eBay. So the answer is yes, there is a potential for such a site in the U.S.; and that potential has been filled for many years.

Ted Hurlbut
Guest
Ted Hurlbut
4 years 9 months ago

I just don’t see it. There’s a presumption in all this that the business model for independent retailers is not that much different for larger mass-market retailers, and that’s just not so.

The key to independent retailing is to create distinctive and compelling in-store experiences, built around exclusive, niche products, where price is not a key driver. An independent retailer’s website is just as much about representing that experience as it is selling merchandise.

I question how much additional business an aggregated website would generate for any given independent, and doubt that would be worth muddying that distinctive identity that each independent works so hard to create.

Ed Rosenbaum
BrainTrust

This is workable in the U.S. No question in my mind. Sure there will be hurdles. Every good or new idea had hurdles. I can’t name one that didn’t.

Ralph Jacobson
BrainTrust

As others have commented herein, this has been tried before, and with the low-cost resources available today, there is no reason for small retailers AND small CPGs not to have their own presence. These businesses can connect with global entities to get tagged and linked to shopper searches. This is all happening today, and I see no reason for this idea to be attempted again.

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