Report • 27.11.2017

Lokaso.Siegen: Siegerland’s online marketplace celebrates its one-year anniversary

An asset for the region, but also a benefit for retailers?

It has been one year since the Lokaso.Siegen online marketplace has gone live. That’s why we headed for the scenic Siegerland again and asked for feedback.

Patrick Schulte, Managing Director of Lokaso GmbH, is overall pleased with the platform development and very positive about the situation. “At this point we are able to meet between 50 and 60 percent of everyday needs with Lokaso.Siegen. We keep acquiring more and more new customers, while the number of orders we handle per month is also increasing. We are currently processing between 300 and 350 orders every month.“

Schulte is definitely aware of the fact that this concept doesn’t make him rich. He says that his emphasis is to illustrate that this concept works and that’s something he has definitely accomplished. Lokaso Siegen offers free same-day delivery with no minimum purchase amount, even if the shopping cart includes items from various vendors.

Having said that, Schulte has to scold the Siegerland. “When people ask us about our biggest problem, it’s the fact that end consumers don’t believe we truly offer free door to door delivery starting from the first euro and at the retail price. Wherever we are able to showcase this feature, we attract regular customers. Once customers have seen this concept in action, they continue to shop with Lokaso.“

On September 3, 2016 Lokaso Siegen went online. Initially, there were 19 retailers from the region, meanwhile there are 39, and it is likely to have been more, as some shops are no longer participating in the project. Instead of initially 20,000 articles, customers now find 1.4 million products on the website. With almost 1.3 million articles, the category "Books" is the largest product group. The average shopping cart is 32 Euro.

The online shop’s usability needs some improvement

That being said, the online store has not been fully perfected yet: even though the products in a category can be assigned to individual retailers, there is no additional filter function. What’s more, the search function is a full-text search. This makes the search process more difficult for end customers because searches also display products that only vaguely match the requested item.

Product descriptions are completely missing or misleading....
Product descriptions are completely missing or misleading.
Source: Screenshot

Schulte adds, “Design, product description, and product quality are recurring topics. We continue to work on improving the platform. This is a continuous process we have to share with the retailers. There is a need for communication in this area because some retailers are new to e-commerce and still need to gain a certain understanding of the processes.” It is clear that this not an easy process and becomes obvious if you take a closer look at the shop. Products frequently are being assigned to the wrong categories. For example, outdoor apparel shows up in the “wildlife” category and not in “fashion“. The same applies to jams and spreads customers can find under the “Toys & Baby“ category. In addition, the product selection doesn’t reflect seasonal patterns. For example, one retailer still offers Easter decorations right before the start of Christmas season.

Schulte knows that it can be difficult to raise awareness about “e-commerce“ aspects. “To ensure that end customers are able to find what they are looking for, the portal preferably needs a seamless product selection. Both providers and retailers must initially and continually update the selection and this requires interfaces, which we provide and further develop as an operator. The retailer does not pay extra for this feature.“ In other words, the problem is not the technology but rather the actual retailers. After all, despite the technical support and a small amount of work, some partners still have a hard time and this is also reflected in their appearance. They lack the awareness of the requirements needed for online retail.

Click here to read the interview about the concept behind Lokaso.Siegen.

What retailers from Siegen and the surrounding area have to say

Whether it’s fashion, bathroom design, optics, groceries or beauty items – many different retailers have partnered up with Lokaso.Siegen. All of them have different motives for doing so. Manuela Fuchs from Farbenrausch explains, “Even though I don’t generate the number of sales I actually need, I will stay with Lokaso because it is a great advertising platform for me. I am familiar with several other local projects that I knew would not work. However, Lokaso’s concept makes great sense to me. I am still backing it up all the way.“

Joachim Hebel from Gut & Gerne adds, “We currently don’t see a boost in the popularity of our business. However, we are still sticking with the platform even though it does not cover our investment at the moment. It simply needs some more time to get off the ground.“

Karin Setz from Röstwelt also believes in the project. “I am especially excited about the regional focus. It is important to position yourself for broader success. The amount of work it requires is manageable. And although sales could be better, that’s actually always the case. You have to keep realistic expectations.“

Having said that, conversations with other retailers, and especially food retailers that offer daily use products clearly show that they are the big winners of Lokaso.Siegen. That’s also why Gerd Grothe from Feuer und Feines (a specialty shop for home décor and accessories) has already ended his collaboration with the platform. “We are unable to register any profits in our line of business. Lokaso doesn’t deliver the desired frequency. We also operate our own online store and are very active in the social media realm.“

Customers who are convinced of the concept also order again....
Customers who are convinced of the concept also order again.
Source: Lokaso GmbH

"Understanding a digital process that arouses respect among retailers is the best thing we have been able to achieve. If the retailer is enthusiastic and helps to make the product range attractive, consumers are more delighted." (Patrick Schulte, Managing Director)

Lokaso expands in 2018 and creates additional synergy effects

The concept is primarily shaped by and created for the region. It is the emotional values and a feeling of solidarity that are particularly effective in this setting. “We are not just interested in pure economic aspects. The overall system pays off, we have been in the black since December, yet nobody will become a millionaire doing this. We provide this channel as a service for retailers in the region,“ Schulte points out.

That’s also why other cities and communities have expressed interest in Lokaso. Arnsberg, Isartal (near Munich), Bigge, the communities of Altenkirchen and Wittgenstein, and even Dos Hermanas, a town near Sevilla – some of them have already signed contracts with Lokaso GmbH and are ready for 2018.

In addition, Schulte wants to increasingly focus on synergies. “The addition of Bigge, Altenkirchen, and Wittgenstein adds regions to Siegen that are located directly next to each other. If an item is unavailable in one region but available in the neighboring area, it gets delivered with a shipping delay. This service is designed to close gaps in the product selection.“

Lokaso is not a cash cow like Amazon but rather a serious attempt to boost the local retail sector. Retailers should thus take this chance and finally do their homework because this is the kind of great concept they could never get off the ground on their own.

Authors: Melanie Günther and Julia Pott

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