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How Online Marketplaces Are Helping Local Stores Survive COVID-19
Aug
Retail giants like Amazon are blurring the lines of consumption. But with platforms that connect online consumption with local interests, willingness to buy locallytrend fueled by the COVID-19 pandemic is now giving rise to a recent phenomenon known as “digital localism.”
While the pandemic has led to border closures and an increased desire for local production and supply chains located close to home, enormous platforms such as Amazon have faced criticism for taking advantage of the economic hardships caused by the crisis for petite local businesses.
In Quebec, this has led to the emergence of recent platforms for selling local goods, such as Blue Basket, My Quebec zone, Boomerang, Inc. AND I’m buying by the lakea place to buy local products from the Lac St-Jean region in the province.
A local e-commerce platform for shopping centers has also been created, just like Evea ride-sharing cooperative platform that partners with taxi companies and gives drivers more control over their company.
These recent companies are reclaiming the meaning of consumption and production. And in these times of transition, aren’t we looking for ways to give more meaning to our lives?
The consumer-supplier era
Whether you want to carpool on Eva, trade goods with someone on Kijiji, or participate in a crowdfunding campaign on Ulule or conduct business on a site such as CourtIt is the concept of consumer and supplier that makes this transformation possible.
Consumption methods have increasingly moved away from production since the early 20th century. Consumers have become pure buyers. However, recent concepts such as collaborative consumption, the sharing economy, and community-based capitalism are now mixing up modes of consumption and production.
The place of the passive consumer is taken by the lively consumer who takes on the role of supplier, volunteer, or even partner.
For example, with NousRire (a play on the French “nourir,” “to feed”), a Quebec-based wholesale food purchasing group, clients become both suppliers and volunteers. In other words, they are partners in the organization.
(Nousrire.com)
Similar changes are occurring in the world of large-scale distribution. Examples include IKEA “Second life for furniture” serviceAND Marks & Spencer Exhibition (brief for “shopping and swapping”), a service enabling shoppers to return used clothes in boxes located in the British retailer’s stores.
Deadline “cooperative consumption” has been used to describe this recent trend of consumers also acting as vendors through these various platforms and apps. The same concept applies to Facebook Marketplace, Kijiji, InstaCart, and VarageSale.
It’s not just about saving money
What motivates consumers to adopt these recent practices?
While buyers and suppliers have both financial and utilitarian goals, suppliers in this model may also be motivated by factors that go beyond pure financial gain. These motivations may include financial constraints (debt, liquidity problems), a desire to socialize with others, contribute to society, or uncomplicated altruism.
In addition to the above-mentioned trading platforms, websites like Coursera offer people training and consulting resources. For outsourcing tasks, people can turn to Amazon Mechanical Turk.
Healthcare is undergoing a transformation towards digital care, which enables better distribution of resources and the possibility of offering advice and services through online forums, groups or patient communities.
Read more: Good governance is the missing recipe for better digital healthcare
Democratization of markets
The financial sector has also become more democratic. Crowdfunding platforms such as Ulule allow individuals to donate or invest in projects run by other parties, while platforms like eToro make investing in financial markets a more democratic process.
These platforms enable individuals to revitalize their local economy by redirecting capital to areas that are typically neglected by public or private investment.
Cryptocurrency and blockchain are also intriguing examples. Thousands of cryptocurrency systems, such as Bitcoin, are currently in operation, where cryptocurrency miners replace central banks. Facebook Blockchain-based payment system project Diem suggests that a “total digital ecosystem” is emerging: a dematerialized and value-free society with individuals at its core.
Read more: Finance professions must change to prevent technological extinction
In 2016, India even tried to create a cashless societyThis policy has had an impact on practices specific to developing countries, including cash on delivery, which has been transformed into cash on delivery. It is strenuous to say whether this is good or bad news. On the one hand, cooperation transactions, which are often informal, are becoming easier to perform. On the other hand, they are completely tracked and taxable.
Controversial economy
The collaborative economy is perhaps the most observable, well-documented and groundbreaking example of the ongoing transformation of the marketplace. Hotel owners are complaining about Airbnb and taxi companies are complaining about Uber, because basically anyone can now provide lodging or transportation for a fee. These debates in Quebec led to the creation of rights which are more genial to recent players. These rights in turn have, helped new platforms increase their activity.
This change allowed the authorities to transfer some of the responsibility for public services to the private sector. In public transport, the availability of carpooling services could compensate for the shortages in public transport. Citizens appreciate these practices because they meet their needs, maximize the employ of dormant resources, provide better access to resources for the indigent, and reduce unemployment.
However, it is still unclear whether by turning suppliers into “entrepreneurs” these platforms are changing or destroying working conditions, given the numerous problems faced by precarious workers.
Read more: California’s fight for ephemeral workers exposes agency abuses in Canada
CANADIAN PRESS/Nathan Denette
The illusion of power?
It’s vital to understand the impact that the algorithms used by these platforms have on governance, inclusivity, and user rights. The exponential amount of data generated by platforms has increased the ability of enormous companies to quickly identify user needs and accurately assess their ability to pay.
These possibilities can lead to discriminatory practices. In addition, platforms are notoriously murky about their pricing practices: they often adjust and revise prices in real time for each user.
Finally, because the collaborative economy is monopolized by tech giants, smaller platforms are less likely to emerge, let alone survive. In brief, by becoming a provider—whether as an entrepreneur, as a self-employed worker, or through a adaptable work schedule—consumers can only gain the illusion of power while they remain in the service of mega-platforms.
Will digital localism find its place in this world? Do platforms born during the COVID-19 pandemic to support local economies have any chance of survival in the long term?
According to the case study small and medium-sized car-sharing platforms in ChinaThe only way for smaller platforms to survive is to meet needs that the giants don’t: exploiting a specific customer segment, partner type, value proposition, or cost structure and revenue stream.
However, recent advances in digital technologies are clearly giving individuals more ways to contribute. This digital transformation, already underway, has accelerated during the COVID-19 pandemic and is unlikely to stop anytime soon.
