Technische Hochschule Ingolstadt

Business School
International Retail Management

Bachelor’s thesis

Local Shopping Platform as a Means of Overcoming the Challenges

of Digital Transformation: User Requirements Assessment

Author: Anna Serebryakova

Issued on: 07.07.2021

Submitted on: 29.07.2021

First examiner: Prof. Dr. oec. publ. Lars Fend

Second examiner: Prof. Dr. rer. pol. Monika Ruschinski
Abstract

This thesis investigates a local shopping platform as a tool to address the

challenges faced by local retailer sector due to the accelerated digital
transformation during the Covid-19 pandemic. A user-centred approach chosen
for this research helps to evaluate and categorise the attributes placed on
platforms and thus identify the key aspects for platform acceptance and
engagement. Within this methodological approach, qualitative data collected
through content and survey analysis are quantified for the purpose of numerical
representation and subsequent verbal interpretation. For the content analysis,
there were selected 25 existing local shopping platforms, the data of which were
juxtaposed with the answers of 67 questionnaire participants. This research
shows that a potential user expresses a strong interest in using a local shopping
platform, but their awareness of the existence of such a platform is still relatively
limited. The study also shows that existing local shopping platforms do not
entirely meet all of the user requirements and suggests existing platforms
reprioritise their offerings and features based on user needs.

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Table of contents

Abstract ............................................................................................................. ii

Table of contents ............................................................................................. iii

List of figures.................................................................................................... v

List of tables .................................................................................................... vi

List of abbreviations ...................................................................................... vii

1. Introduction ................................................................................................ 1

1.1. Problem description............................................................................... 1

1.2. Aim ........................................................................................................ 3
1.3. Research questions and methodology .................................................. 3
2. Review of literature and theoretical framework ...................................... 6

2.1. Definitions of key terms ............................................................................ 6

2.1.1 Small and medium sized enterprises .............................................. 6
2.1.2 Local owner-operated retail businesses ......................................... 7
2.1.3 Crisis ............................................................................................... 7
2.1.4 Digital transformation ...................................................................... 8
2.1.5 Platform .......................................................................................... 9
2.1.6 Local shopping platform .................................................................. 9
2.1.7 User requirements ........................................................................ 10
2.2 Crisis-driven digital transformation ...................................................... 10
2.2.1 Local owner-operated retail outlet capabilities .............................. 10
2.2.2 Challenges of digital transformation.............................................. 13
2.2.3 Understanding shifted consumer behaviour ................................. 14
2.3 The concept of the local shopping platform ......................................... 15
2.3.1 Platform model description ........................................................... 15
2.3.1 Types of the local shopping platforms .......................................... 16
2.3.2 Stakeholders ................................................................................. 17
2.3.2.1 Platform owner .......................................................................... 17
2.3.2.2 Local owner-operated retail outlets ........................................... 18

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 2.3.2.3 User ........................................................................................... 18
2.3.3 Challenges .................................................................................... 19
2.4. Use of the Kano model to assess user requirements .......................... 20
3. Methodology ............................................................................................ 22

3.1. Research context and approach ......................................................... 22

3.2. Research methods .............................................................................. 22
3.3. Content analysis .................................................................................. 23
3.3.1. Sampling ....................................................................................... 23
3.3.2. Data collection .............................................................................. 23
3.3.3. Data analysis ................................................................................ 24
3.4. Survey analysis ................................................................................... 29
3.4.1. Data collection .............................................................................. 29
3.4.2. Data analysis ................................................................................ 33
4. Results ...................................................................................................... 36

4.1. User requirements assessment ........................................................... 36

3.1. Existing platforms attributes evaluation ............................................... 40
4. Conclusion ............................................................................................... 43

List of references ........................................................................................... 45

Appendix ......................................................................................................... 55

Declaration ...................................................................................................... 76

iv
List of figures

Figure 1: Structure of the thesis.............................................................................. 4

Figure 2: Pipeline model ...................................................................................... 15
Figure 3. Platform business model........................................................................ 16
Figure 4: Local shopping platform model ............................................................... 17
Figure 5: Preferred geographic coverage of existing LSPs ...................................... 26
Figure 6: Preferred social media channels of existing LSPs .................................... 27
Figure 7: Presence of review section in existing LSPs ............................................ 27

v
List of tables

Table 1: SWOT analysis ...................................................................................... 12

Table 2. Kano model qualities .............................................................................. 21
Table 3: Attributes and services on existing LSPs (May-June 2021) ........................ 25
Table 4: List of platform attributes......................................................................... 31
Table 5: Kano evaluation model ........................................................................... 32
Table 6: Results of the survey analysis ................................................................. 34
Table 7: Kano survey results ................................................................................ 36

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List of abbreviations

Abbreviation Meaning
DI Dissatisfaction index
LOORO Local owner-operated retail outlet
RQ Research question
SI Satisfaction index
SME Small and medium sized enterprise
SWOT Strengths, Weaknesses, Opportunities, and Threats
UI User interface
UX User experience

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 1. Introduction

1.1. Problem description

Small and medium-sized businesses, especially the local retail sector, have been
hit hardest by the Covid-19 pandemic, forcing them to cease operations, close
down or find new ways to survive.1 As the pandemic made digital transformation
not only an option but a necessity,2 and the nature of Covid-19 crisis forced
retailers to switch to digital channels in a rapid manner, making the right decision
threatened the survival of local shops, which are a part of country culture and
identity as well as a fundamental element of the economic strength.3

It has therefore become particularly important for local retailers with a traditional
business model to find an advantageous route to digital transformation.4
However, especially in times of uncertainty, it is critical to be financially capable,
technically, managerially skilled, as well as being willing to change,5 as the
absence of these can have a negative impact on the implementation or
adaptation of an e-business strategy. This raises the question of whether all
retailers, particularly local independent stores focusing on physical sales area the
most, are capable to overcome challenges of the digital transformation on their
own. A few studies doubt the ability of local independent stores to tackle the
challenge, drawing attention to their need for external support.6

Platform as the business model, that has seen substantial growth and “disrupted
other industries”7 in recent decades due to its “value orchestration mechanism”8,
creating continuous value to all sides, is identified as a path for success or the

1 cf. Bärsch et al., 2021, p. 2.

2 cf. Fletcher et al., 2020, p. 3.
3 cf. Bollweg, 2018, p. 3.
4
cf. Verhoef et al., 2021, pp. 889-901.
5 cf. Eggers, 2020, p. 200.
6 cf. Bollweg et al., 2018, p. 10.
7
cf. Reinartz et al., 2020, p. 20.
8
cf. Gatautis, 2017, pp. 585-591.

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“the poster child of the digital transformation”9. In fact, large e-marketplaces have
seen a rapid increase from 42% to 45% in 2020, whereas the share of online
shops continue to decline.10 On the one hand, giant marketplaces, such as
Amazon or eBay, appear to be a promising solution for independent local stores
to overcome the challenges and survive the instability times. However, intense
competition and aggressive substitution of low-priced analogues hinders the
survival and growth of small businesses.11

Local shopping platforms, unlike existing giant e-marketplaces, specifically target

retailers from a particular region on one side and users on the other with the local
focus as a part of their unique selling proposition.12 This type of business model,
as an additional sales and communication channel, which is aimed specifically at
connecting local stores and customers in the digital realm,13 can therefore be
viewed as a solution for addressing the burden of digital transformation for local
retailers.

Nevertheless, studies still define this model to lead the “premature approach”14
being in the early stage of the development. Moreover, changing customer
behaviour as a result of the pandemic has created a high level of uncertainty
about the success of this type of platform.15 Therefore, one cannot deny the
importance of emerging digital persona in the shifted customer journey and the
customer expectation of digital services that have arisen ever since.

Currently, there is limited research on owner-managed local retail outlets facing

the challenges of digital transformation, especially during the pandemic. Previous
studies have focused on identifying the development of types of local platforms
in Germany, analysing the services that existing local shopping platforms offer,16

9 Reinartz et al., 2020, p. 4.

10 HDE, 2021, p. 25.
11 cf. Cavallo, 2018, p. 3.
12 cf. Bärsch et al., 2019, p. 3.
13 cf. Bollweg, 2018, p. 95.
14 Bärsch et al., 2019, p. 604.
15 cf. Loxton et al., 2020, p. 166.
16 cf. Bärsch et al., 2019.

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as well as analysing user behaviour on local shopping platforms based on the
web usage data.17 However, there is a significant backlog in research, based on
the evidence available, in analysing the extent to which the services offered on
local shopping platforms meet user needs.

1.2. Aim

The aim of this thesis is to assess user requirements for attributes present on
local shopping platforms, as a means of overcoming challenges of accelerated
digital transformation caused by the Covid-19 pandemic, and to determine the
extent to which value propositions on existing platforms of this type meet
customer needs. This thesis therefore fills a research gap by addressing the issue
from a customer-centred approach.

1.3. Research questions and methodology

The following five research questions were formulated in order to achieve the aim
of this thesis:

RQ1: How can the strengths and weaknesses of local retail owner-
operated retail businesses help or hinder their ability to survive a
pandemic?

RQ 2: What are the challenges posed by the digital transformation

accelerated by the Covid-19 pandemic to local retailers with a traditional
business model, and how might this affect their survival and growth?

RQ 3: How does customer behaviour change during a pandemic, and what

are the stronger touchpoints?

RQ 4: To what extent does the local shopping platform provide a value

proposition to its stakeholders, with a particular focus on the user side?

17 cf. Bollweg et al., 2018.

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 RQ 5: How willing are customers to use a local shopping platform during
a pandemic, and what requirements are placed on the platform to meet
customers' needs?

Therefore, to approach these research questions and achieve the defined aim,
the study is divided into several sections (Figure 1).

Figure 1: Structure of the thesis

In the first section, i.e., literature review and theoretical framework, the objective
is to define key terms, analyse the capabilities and challenges of local retailers in
times of a pandemic through the prism of a SWOT analysis, understand local
stores digital capabilities to respond in times of the pandemic. Following that it is

4
crucial to analyse the customer journey in the event of a pandemic, define
stronger and weaker touchpoints, as well as understand value proposition that a
platform can provide to all stakeholders, including local businesses and
customers.

The next chapter focuses on the evaluation of the platform attributes by analysing
current services of local shopping platforms through the content analysis as well
as the evaluation of user requirements through a survey analysis.

Finally, the key variables and requirements that determine local shopping
platforms acceptance and engagement must be identified.

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 2. Review of literature and theoretical framework

The purpose of this chapter is to define the key terms used in this thesis, to
conduct a literature review on the capabilities of small and medium-sized
enterprises with a strong focus on local owner-operated retail shops, to assess
their potential pathways for digital transformation, and to conduct a literature
review on local shopping platforms as a tool to tackle the challenges posed by
the pandemic.

2.1. Definitions of key terms

2.1.1 Small and medium sized enterprises

As locally operated retail stores fall into the segment of small and medium-sized
enterprises, it is important to clarify what is meant by the term, with a focus on
local owner-operated retail outlets (LOOROs)18 throughout this paper.

Most sources rely on the number of employees and revenues to identify small
and medium-sized businesses.19 OECD glossary, for instance, defines the upper
limit of European small enterprises as those with less than 50 employees and 10
and in some cases 5, i.e., micro enterprises.20 With regard to the general qualities
of small and medium-sized, these are defined as "non-subsidiary and
independent"21 enterprises, which classify themselves as small or medium-sized
companies, given that micro-enterprises are also included in this category. In
terms of standard revenues of small and medium-sized enterprises22, the
European Commission publication sets a threshold, namely up to €10 million for
small, and no more than €2 million in annual turnover for micro enterprises.23

18 cf. Bärsch et al., 2019, pp. 602-616.

19 cf. Cacciolatti et al., 2015, p. 7.
20 cf. OECD Statistics, 2005.
21 cf. OECD Statistics, 2005.
22 OECD Statistics, 2005.
23 OJ L 222, 14.8.1978, pp. 11-31.

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 2.1.2 Local owner-operated retail businesses
Since this thesis sheds light specifically on local owner-operated retail
businesses (LOOROs), it is important to identify the characteristics that define
this target group. As mentioned in other studies, LOOROs are enterprises
operating on individual business models.24 Since there is limited literature on
describing and defining the above-mentioned term, there were collected several
characteristics from existing published studies that frame the concept. These
characteristics will contribute to the development of a unified definition of the
concept.

LOOROs are therefore usually characterised by their geographical location,

namely a strong focus on traditional brick-and-mortar retail areas with the fixed
opening hours, independence and the owner engaged in the day-to-day activities
at the retail location.25 What is more, this type of retailers are generally known for
their differentiated high quality of products, often produced locally.

2.1.3 Crisis
Given that this research analyses events related to the Covid-19 pandemic, it is
worth noting that this event is referred to as a crisis in most of the literature and
publications reviewed.26 Since the term crisis can refer to a wide range of
phenomena, the strategic response to the crisis, as well as the approach to it,
depends on its nature.27 A general definition of the crisis is “some breakdown in
a system that creates shared stress”28. To be more precise, the general feature
of the Covid-19 pandemic is its unexpected nature, with a high level of uncertainty
in terms of its duration.29 This characteristic to some degree overlaps with the
view in other studies defining crisis as a “period of unexpected and unfavourable
external environment shift” 30. Moreover, one of the key attributes of the definition

24 cf. Bollweg et al., 2020, pp. 173ff.

25 cf. Bollweg et al., 2018, p. 4.
26 cf. Fabeil et al., 2020, p. 838
27 cf. Kraesgenberg, 2016, p. 10.
28 Coombs, 2019, p. 3.
29 cf. Rupani et al., 2020, pp. 1ff.
30 Beliaeva et al., 2020, pp. 165ff.

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of a pandemic is its "simultaneous worldwide transmission"31. This definition is
helpful for understanding the global impact of this specific event.

2.1.4 Digital transformation

In the literature, there seems to be no general definition of the process of digital
transformation since it is a complex concept that encompasses various
components within its framework, such as digitization and digitalization. 32 While
the terms "digitization", "digitalization" and “digital transformation” share the root
"digital", their meanings are not the same.33 To be more precise, digitization is a
conversion of information that can be transformed from analogue to digital data
and later be available through information technology,34 whereas digitalization is
defined as a usage of digital technology to “support”, “improve” business
processes, as well as a “conversion” of the information that can be available
through digital technology.35

Digital transformation, on the other hand, is a complex and strategic activity, as

well as a “holistic process of continuous changes” that employs digital technology
as a tool to develop a new business model in order to create more value.36 Other
authors consider digital technology to play a clearly smaller role in the process.
To be more precise, digital transformation is defined as a “sociocultural process
rather than as a technical feat”37 that starts first with the organizational culture.
Finally, it should be noted that the prominent feature of the digital transformation
discussed in this thesis lies in its accelerated nature, triggered by the Covid-19
pandemic.38

31 WHO, 2020.
32
cf. Saarikko et al., 2020, pp. 825ff.
33 cf. Zimmermann et al., 2021, pp. 3-8.
34 cf. Ritter et al., 2020, pp. 180ff.
35
cf. Ritter et al., 2020, pp. 180ff.
36 cf. Fletcher et al., 2020, p. 4.
37 Saarikko et al., 2020, pp. 825-839.
38 cf. Soto-Acosta et al., 2020, pp. 260-266.

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 2.1.5 Platform
A platform is a business model with a “two-sided market” 39, although it may also
include more markets, that consists of a demand, or “demanders”, a supply side,
or “providers”, and a network orchestrator,40 in this research however the focus
is put on the two-sided market. The main activity operated on the platform is the
“exchange of products, services and information” between “autonomous”
participants of each side.41

It is also necessary to distinguish between the terms "digital platform" and

"marketplace". Based on the reviewed literature, every marketplace is a platform,
although not every platform includes a transaction when it is a precondition for a
marketplace.42

2.1.6 Local shopping platform

A local shopping platform is defined in the reviewed literature as a mediator
between retailers of a specific type from a certain region on one side, i.e., local
owner operated retail outlets, and users on the other side, operating in the digital
space.43 Although the function of the platform is similar to the existing
marketplaces (e.g. Amazon or Etsy), its business model, as mentioned in the
reviewed sources, is not identical, namely these platforms set restrictions on the
type of retailer, their location, and may also restrict service to a specific customer
bound to a certain geographical area.44

The main functions that the local shopping platform perform are exchange of the
information between the supply side, i.e., local stores, and the demand side, i.e.,
customers.45 Additionally, the types of the attributes these platforms offer may

39
Kim, 2016, p. 51.
40 cf. Laczko et al., 2019, pp. 214-230.
41
cf. Cusumano et al., 2020, pp. 46-54.
42 cf. Vautier, 2019.
43 cf. Bärsch et al., 2019, p. 5.
44 CCEC, 2016, p. 11.
45 cf. Bärsch et al., 2019, p. 604.

9
vary, as they can function in transactional (i.e., a marketplace) or non-
transactional modes.46

2.1.7 User requirements

Finally, since this research focuses on both potential and existing users of the
local shopping platform, it is important to define what is meant by user
requirements in this thesis.

The general definition of user requirements is interpreted in the reviewed

literature as a business need, an expectation of a certain system, as it determines
the critical success of its business operation.47 Generally, this term is widely used
in software engineering and was also chosen for this study. Therefore, this
research has a customer-centred approach with a focus on user requirements,
defined as the needs of existing customers, visitors and potential shoppers.

2.2 Crisis-driven digital transformation

The objective of this chapter is to conduct a literature review of the strengths and
weaknesses of small and medium enterprises, particularly locally owned,
independent retailers, analyse their threats and opportunities, i.e., digital strategic
options and the consequences they bring, in times of a pandemic to understand
whether digital platform can help retailers survive pandemics and grow in the long
term.

2.2.1 Local owner-operated retail outlet capabilities

The productivity of small and medium enterprises is often compared to that of
large companies, although, in addition to the definition provided in the previous
section, it is essential to point out that they "are not smaller versions of large
firms"48. Hence, these businesses are considered to be “more vulnerable to
environmental effects” 49 due to their resource constraint. What is more, further

46 cf. Bärsch et al., 2019, p. 605.

47 cf. Maiden, 2008, pp. 90-91.
48 Olejnik, 2014, pp. 1-24.
49
Grimmer et al., 2015, pp. 409-424.

10
study suggests that the amount of resources these firms possess corresponds to
the company success or failure.50

As a matter of fact, when exploring the resources these firms lack the most, the
result refers to financial constraint, such as “low profit margins”, “lower revenues”,
“higher payroll costs” and “lower margins than large enterprise”.51 Moreover,
further studies show that during times of crisis, creative and innovative SMEs
have more difficulty obtaining finance.52

Further research findings point to a "lack of managerial competence", "poor

management", “lack of skills and expertise”, "little experience” as well as
“informality and lack of systems” as a general weakness of SMEs.53 Limited
technical skills is further compounded by the observation that the lack of this
resource can drastically affect the potential of companies e-business strategies.54

Nevertheless, while the failure rate of small businesses is found to be high, some
authors believe that it is often “overstated”.55 In other words, small and medium
enterprises do have their strength as well, and this strength is even more
impactful in times of economic instability. Thus, the evidence from the study
supports Schumpeter's finding by observing smaller firms receiving additional
growth in times of crisis.56 In other words, small and medium enterprises, unlike
large companies, are more flexible in responding to the changing external
environment. What is more, the smaller the firm, the more flexible it is and the
“ability to be innovative in niche markets” even gives a competitive advantage for
such firms.57 However, the level of agility and flexibility is highly dependent on the
right management and leadership.58

50 cf. Vaaland et al., 2007, pp. 20-31.

51 Eggers, 2020, p. 200.
52 cf. Lee et al., 2015, pp. 370-380.
53 cf. Grimmer et al., 2015, pp. 409-424.
54 Vaaland et al., 2007, pp. 20-31.
55 Mazzarol et al., 2020, p. 38.
56 cf. Bartz et al., 2016, pp. 196-215.
57 cf. Kraiczy, 2019.
58 cf. Mazzarol et al., 2020, p. 38.

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Table 1: SWOT analysis59

Strength Weaknesses
o Flexibility o Financial resources
o Small size o Limited geographic scope
o Innovation o No technical skills
o Less bureaucratic structure o Marketing knowledge
o Flat hierarchy o Digital transformation capabilities
o Informality and lack of systems o Unwillingness to change
o Experts in goods / services o Organizational resources
o Lack of managerial experience
Opportunities Threads
o Competitive advantage o Bankruptcy
o Enlarge geographical scope in o Failure to adapt to digital
times of a pandemic transformation during the
o Growth pandemic
o Open up new revenue streams
o Offer value proposition in crisis
times

From the evidence in the literature reviewed, it can be concluded through the
prism of the SWOT analysis (Table 1) that small businesses, which tend to be
more innovative, have the potential to thrive and grow in times of crisis due to
their flexibility and quick decision-making, although any wrong decision can lead
to failure. They are able to be more adaptable to changes. However, financial
capability, leadership as well as technical, and management skills play an
essential role in this regard, especially in times of instability. What is more, the
introduction of proven technologies is expensive, and yet it can lead to growth.
The lack of these skills and resources can have a negative effect on a company
ability to implement or change its own e-business strategy. In other words, these
skills are especially important in designing the right e-strategy and ensuring
company growth. Therefore, the provided analysis answers RQ1 (Figure 5).

Consequently, after analysing the strengths and weaknesses of small and

medium enterprises businesses, local stores in particular, during both periods of
crisis and economic stability, it is critical to understand the best pandemic
measures these businesses can take.

59 Own elaboration based on the reviewed literature with the focus on Augsdorfer, 2013.

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 2.2.2 Challenges of digital transformation
The evidence of the study suggests that small and medium-sized businesses lag
behind large corporations and only the latter can implement successful “digital
strategies”60 due to their financial capability and understanding of the complexity
of new technologies.61 Nevertheless, the adoption and use of digital technologies
by SMEs is vital for surviving and the lack of it can “cause a serious concern”62.

Although e-commerce as well as digital transformation are not a novel topic, and
it has been largely grown pre-pandemic,63 the adoption of e-commerce by SMEs
is growing, however it is still comparatively slow.64 The study shows that only a
small percentage, i.e., 22% of businesses are using their websites to undertake
e-commerce transactions.65 as well as most of the enterprises operate only the
basic technology, such as e-mail and a website. They can reach the final stage,
i.e. digital transformation, although it entails reaching the four previous stages
including e-mail, website, e-commerce and e-business.66

In conclusion, reaching digital transformation is critical, however it will not have

any effect or rather can become a liability without people with “digital skills”.67
Moreover, small and medium enterprises including local retail stores can quickly
adapt to the conditions of the external environment, due to their flexibility, as
discussed in the previous section, and yet they lack the human, technological and
financial resources to develop their own technology platforms,68 which suggests
the need for external support to address the problem of overcoming digital
transformation burden. This analysis helps to answer RQ 2 (Figure 1), followed
by an understanding of other external environmental factors, namely customers.

60 Rovira, 2021.
61
cf. Mazzarol et al., 2020, p. 321.
62
cf. Mazzarol et al., 2020, p. 321
63 cf. Schu, 2017, p. 38.
64 cf. Mazzarol et al., 2020, p. 38.
65
Sensis, 2017.
66 cf. Mazzarol et al., 2020, p. 322.
67 cf. PWC, 2018.
68
cf. Mazzarol et al., 2020, p. 323.

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 2.2.3 Understanding shifted consumer behaviour
It is essential to take customer expectations into account since the dynamic
changes of external factors alter consumer behaviour in times of crisis. 69 In
addition, a key factor in combating the effects of the pandemic is customer
analysis,70 which aims to meet the needs of customers and capture their value.71

The most common outcome of the economic crisis is a shift in consumer demand
that logically changes the customer journey, thus calling for the development of
new digital personas.72 In fact, digital channels as well as touchpoints are of a
crucial importance in analysing the customer journey.73 Therefore, for small local
businesses, relying heavily on brick-and-mortar stores, adding a new digital
channel or touchpoint means creating a new value proposition, offering new
values to address customers74 as well as enabling “additional growth potential”75.

In terms of location, some studies show that in crisis times consumers are more
likely to shop at a single location rather than several areas,76 What is more, the
analysis of customer journeys before, during and after the epidemic concludes
that pop-up shop formats, as well as any other type of physical in-store
experience, belong to the “poor touchpoints”, whereas “stronger touchpoints” to
consider are e-commerce platform stores, Internet live-streaming, private
communication, and social media.77 Thus, shifted consumer behaviour has
significantly strengthened the positioning of e-commerce platforms in times of
pandemic.

69 cf. Mazzarol et al., 2020, p. 38.

70 cf. Scoblic, 2020.
71 cf. Tran, 2021, p. 2.
72 cf. Beliaeva et al., 2020, pp. 165ff.
73
cf. Verhoef et al., 2021, pp. 889-901.
74
cf. Cao et al., 2015, pp. 198ff.
75 cf. Schu, 2017, p. 39.
76 cf. Mckinsey, 2020.
77 cf. Appendix 1: Customer journey analysis, p.55.

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 2.3 The concept of the local shopping platform
The purpose of this section is to analyse the local shopping platform business
model; based on the literature review explore the values it provides for all
stakeholders as well as identify the critical factors needed for the platform
existence and sustainable growth.

2.3.1 Platform model description

The main function of the local shopping platform is an exchange of the information
between the supply side, i.e. local stores, and the demand side, i.e. customers.78
In contrast to the traditional or a “pipeline” model approach, in which products are
delivered more typically from the manufacturer to the wholesaler, to the retailer,
and finally to the consumer (Figure 2), the platform model approach unifies
supplier, manufacturer and a retailer and provides them with the direct interaction
with customers (Figure 3).79

Although the pipeline model approach is considered as a “very useful model”

“historically”, the main problem of it is the lack of the “networking effects”,80 i.e.
the value creation mechanism that brings together autonomous participants on
each side and improves their accessibility due to increased number of users.81
One of the main assets of the platform business model is that the increased
growth from one side leads to the attraction of users from the other side, i.e.
“direct network effects”82, resulting in the scalability.

Figure 2: Pipeline model83

78
cf. Cusumano et al., 2020, pp. 46-54.
79
cf. Reinartz et al., 2020, p. 6
80 Tardieu et al., 2020, p. 65.
81
cf. Gatautis, 2017, p. 586.
82 Abdelkafi et al., 2019, p.1.
83 Reinartz et al., 2020, p. 7.

15
Figure 3. Platform business model84

Operating the platform first and foremost requires digital capabilities, initial costs
and human resources.85 These, as analysed in previous sections, are one of the
liabilities of SMEs. When it comes to the key features of the platform business
model, these are two-sided market, network effects, ecosystem, distribution
power, asymmetric growth and competition, which allow businesses compete
equally (Figure 4).86

2.3.1 Types of the local shopping platforms

There are the following types of the local shopping platforms: store locator
platforms, product catalogue platforms, product enquiry platforms, affiliate
transaction platforms and full transaction platforms.87

While store locator platforms provide only contact information to locate a local
store, product catalogue platforms give a general overview of the merchandise
represented in the stores. Product enquiry platforms help customer check the
availability of the specific product in the store, whereas affiliate transaction
platforms make it possible to make a transaction, although it is performed in the
external website. Finally, full transaction platform performs the role of the
marketplace.88

84 cf. Reinartz et al., 2020, p. 7.

85 cf. Deloitte, 2020.
86 cf. Gatautis, 2017, pp. 585ff.
87 cf. Bärsch et al., 2019, p. 605.
88 cf. Bärsch et al., 2019, p. 605.

16
 2.3.2 Stakeholders
Since, as noted earlier, a local shopping platform includes not just a platform
provider but also suppliers and demanders, it must provide value to all sides of
the market, especially the latter two, so that growth on one side stimulates activity
on the other side, resulting in the power of the network effects (Figure 4).
Moreover, this business model can hardly function without reaching the “critical
mass”.89 Therefore, it is essential to analyse and evaluate value delivery to each
participant of the ecosystem.

Figure 4: Local shopping platform model90

2.3.2.1 Platform owner

A platform owner, or the “network orchestrator” (Figure 4) is the one responsible
for the governance structure and rule creation and also takes a major part in the
value creation.91 The owner can be a company or a third party, although “not
every company can be the owner”92. In other words, it is sometimes advisable to

89 cf. Gatautis, 2017, pp. 585-591.

90 Own depiction based on Kim, 2016., Bärsch, 2019.
91 cf. Verhoef et al., 2021, pp. 889-901.
92 Deloitte, 2020.

17
rather be the part of the ecosystems rather than create an own platform. This
statement is justified by the argument that operating a platform first and foremost
requires digital capabilities, initial costs, and human resources.93 These are, as
analysed in previous sections, one of the liabilities of SMEs.94

The platform owner is responsible for the “platform, network costs, marketing
acquisition” and creates an engagement strategy to swiftly achieve critical mass
on both sides of the market.95 The owner of the local shopping platform,
establishes policies, standards, protocols, and architecture, helps local
businesses overcome the burden of digital transformation, brings customers on
a single e-commerce space and therefore acts as a hub for the revenue stream
(Figure 4).

2.3.2.2 Local owner-operated retail outlets

As for the local owner-operated retail outlets, the following values are delivered
from the platform side: a broader market segment coverage, low-cost
infrastructure, channel for communication with users, significant cost saving
compared to brick-and-mortar stores, and lower marketing costs.96

In addition, local shopping platform allows the synergy effects (Figure 4) as well
as the costs to maintain the platform as well as logistics or IT costs can be spread
between different participants from the supplier side.97 It offers value to both sides
as it helps local stores gain the market share, increase the revenue stream as
well as solve the issues that local stores may face in the time of the necessary
digital transformation.

2.3.2.3 User
One of the requirements of customers in times of crisis, according to the reviewed
literature, is to be able to shop in one place (Figure 4). Therefore, with regard to

93 Deloitte, 2020.
94
cf. Tardieu et al., 2020, p.66.
95 cf. Tardieu et al., 2020, p. 66.
96 cf. Gatautis, 2017, pp. 585-591.
97 cf. Bärsch, 2019 et al., p. 603.

18
the users side the following values of using a platform are discussed in the
reviewed literature: entertainment, information, online marketplace, comparison
and communication.98 Moreover, excellent communication between suppliers
and demanders is crucial to encourage shopping behaviour. 99 The
communication also improves a revenue stream and generates further data.

By using a platform, one should aim for more than just profits and revenues.100
Instead, absorption of complementary solutions as well as investments in
advanced products and features are defined as the mechanism of value
capture.101 Nevertheless, some studies question whether consumers can accept
platforms limited to local stores, or they prefer huge marketplaces instead,102as
local shopping platform are still defined by some studies to lead the “premature
approach”103.

2.3.3 Challenges
As for other main challenges leading the platform model to failure in the early
stages, these are described as “low involvement of different players” not resulting
in the network effects.104 This phenomenon is also described in the literature as
not being able to reach a “critical mass”. Without reaching the critical mass, the
platform faces difficulties in involving more players.105 Moreover, if a platform
owner prioritizes monetization over reaching the critical mass, the platform model
will fail.106

Additionally, constant enhancement of new features and functionalities is another

prerequisite to avoid the failure of the platform model described in the literature.107

98 cf. Gatautis, 2017, pp. 585-591.

99
cf. Tran, 2020, p. 6.
100
cf. Gupta et al., 2020, pp. 26ff.
101 cf. Hein et al., 2019, pp. 87-98.
102 cf. Bärsch et al., 2019, p. 603.
103 Bärsch et al., 2019, p. 604.
104 cf. Gatautis, 2017, pp. 585-591.
105 cf. Tran, 2020, p. 2.
106 cf. Tardieu et al., 2020, p.66.
107 cf. Gatautis, 2017, pp. 585-591.

19
Therefore, it is crucial to include more creative features rather than “simple sell-
buy relations” 108.

Finally, one of the main obligations of the platform providers is the privacy
protection. E-commerce platforms are obliged to include privacy rules before
accepting payments in order to protect consumers from “fraudulent actions”109.
Therefore, if a local shopping platform is full transactional, it is essential to provide
“online safeguards”, such as “e-wallets” to secure customers’ data.110

Thus, since value delivery and a reasonable allocation of it to all platform

participants represents one of the requirements for a platform not to fail, it is
reasonable to assume that it is critical to consider all platform participants when
assessing the effectiveness of the platform. However, at the beginning of the
platform development cycle, as well as during the lifecycle, consumer or potential
user analysis constitute one of the vital components.111 Therefore, understanding
user needs and demands, or, as noted in the previous sections, requirements,
will therefore provide answers to key questions that ensure an understanding of
the potential role of this business model.

2.4. Use of the Kano model to assess user requirements

The Kano model or the “two-dimensional quality model” first introduced in 1984,
describes the needs, satisfaction and dissatisfaction of consumers,112 which
according to some studies is a “holy grail” in retail.113 According to the model,
not all aspects of a product or service are equally relevant for a user, therefore it
is important to prioritize them.114 The following groups are characterized to
evaluate the qualities which can also be interpreted in a graphical manner:

108
cf. Gatautis, 2017, pp. 585-591.
109 cf. Tran, 2020, p. 2.
110 cf. Tran, 2020, p. 6.
111 cf. Harris et al., 2016, pp. 4-12.
112
cf. Ingaldi et al.,2019, p. 10.
113 cf. Hult et al., 2018, p. 10.
114 cf. Ingaldi et al.,2019, p. 10.

20
Table 2. Kano model qualities115

Must-be quality describes what a user expects from a product or service,

i.e., the “basic need”
Attractive quality is not expected by a user, but its presence results in higher
satisfaction
One-dimensional the most critical part of the model. It affects the level of
quality customer satisfaction, which in its turn reflects in customer
loyalty. If the attribute is not met, it leads to a customer
dissatisfaction
Indifferent quality this attribute is “short-term” and generates satisfaction
when fulfilled, but it does not trigger disappointment when
unfulfilled.
Reverse quality product features that do not add value to the product or
service the absence of which is preferred by user

115 cf. Ingaldi et al.,2019, p. 9.

21
 3. Methodology

This section describes the methodological approach used in this research.

Initially, the research context and methods are presented, followed by a detailed
description of the data collection and analysis.

3.1. Research context and approach

The purpose of this thesis is to study a local shopping platform as a potential

lucrative channel for small local stores to overcome the burden of digital
transformation during the Covid-19 pandemic.

The empirical part of this thesis focuses on the analysis of the value proposition
of existing local shopping platforms and consequently provides an answer to the
RQ4 (Figure 1): To what extent does the local shopping platform provide a value
proposition to its stakeholders, with a particular focus on the user side? Further
empirical analysis focuses on attributes evaluation of the local shopping platform
from the customers side as one of the most relevant side or critical mass
described in the previous section. Hence the RQ 5 was formed: How willing are
customers to use a local shopping platform during a pandemic, and what
requirements are placed on the platform to meet customers' needs? (Figure 1).
Answering this research question helps to determine whether the current
business model brings value not only to local stores, but also to customers, and
therefore identify possible flows and assess the potential effectiveness of the
platform to reach the critical mass and thus help local stores overcome digital
transformation and grow in the long term.

3.2. Research methods

The main research methods used in this thesis are content and survey analysis.
Content analysis is first used to evaluate the current value proposition of existing
local shopping platforms, such as the features they place, geographic reach,
communication options, platform usability, payment methods, etc. The choice of

22
this method is contributed to the local shopping platforms analysis made in other
studies,116 where scholars conducted a content analysis of local shopping
platforms, and more specifically, analysed their locational advantage for the
digital transformation.

This research is then followed by a survey analysis based on the Kano model,
which aims to determine the extent to which the value proposition offered by the
platforms is accepted and perceived by customers. The content analysis helps to
determine platform attributes, whereas survey analysis evaluates customer
needs, assesses attributes that lead to customer satisfaction and value creation.
The choice of this method is contributed to another study in which authors
identified and assessed key attributes of a potential e-shop.117

In this methodological approach, the qualitative data collected from the content
and survey analysis are quantified so that they can be expressed in figures,
tables and graphs, followed by a verbal interpretation.

3.3. Content analysis

3.3.1. Sampling
To identify local shopping platforms, the sampling method is used. The purpose
of sampling is to collect the available information on the current market of local
shopping platforms, explore all the possible services offered to customers,
conditions needed to participate as well as the value proposition offered to users.
This information helps to form the questionnaire in order to identify whether
current local shopping platforms are accepted and used by customers, in times
of the Covid-19 pandemic.

3.3.2. Data collection

To identify local shopping platforms the following keywords were applied through
the Google search engine (google.com / google.de): ‘local’, ‘buy local’, ‘local

116 Bärsch et al., 2019, pp. 602-614.

117 Ingaldi et al.,2019.

23
shop’, ‘help local stores’, ‘local retail’, ‘locate stores’, ‘local products’. The search
of keywords was conducted in the English, German and Russian languages.

In addition to searching for local shopping platforms, the focus also considered
federal states, cities and regions. The following keywords were used for the
search of regional local shopping platforms: ‘buy local’, ‘local stores’ + ‘Cologne’,
‘Munich’, ‘Bavaria’ etc (i.e. including other cities, federal states and contries).

The search resulted in identifying 25 websites with the following characteristics:

a platform, including local retail stores from one side and customers from the
other side, both transactional (i.e., a marketplace) and non-no transactional, store
locators, product locators, monetized, non-monetized, with a geographical reach
limited to a city, region or a federal state, country and global. The data was
collected in April-May 2021.

3.3.3. Data analysis

Of the 25 platforms examined (Table 3), 9 are transactional (i.e. marketplaces),
while 16 platforms are store locators, in which they provide the potential user with
the address, email address, and further contact details of particular stores.

24
Table 3: Attributes and services on existing LSPs (May-June 2021)

Communication
Geographic

Categories
Location

Payment

Existing
stores
reach Region/federal state
Product catalogue

Product enquiry
Product Locator

Digital Wallet
Store Locator

Social media
Marketplace

Categories

Methods
Country

Review
Global

City
Reddit, Facebook, Linkedin
n n y y y y n n n 6 y N/A N/A N/A
1 Locally Twitter
2 Orderlocal y y y y n n n n y 9 n Youtube, Instagram, Facebook 5 Paypal 9
3 ibuylocal n y n n n n y n n 0 n N/A N/A N/A 3
4 Kaufen-lokal y y y n n n y n n N/A y Facebook, Instagram N/A N/A 72
5 lokal-einkaufen n y n n n n n y n 6 n Facebook N/A N/A 1203
6 wo-finde-ich n y n y n n n n y 12 y N/A N/A N/A 9
7 lokalkaufen24 y n y y y n n n y 20 y Facebook, Instagram 5 Paypal 506
8 shop.kauf-lokal y n y n n n n n y 6 n Instagram 6 Paypal 40
9 lokalkauf n y n y n y n n n 8 n Facebook, Instagram N/A N/A 100
10 ichkauflokal n y n y n n n n y 0 n Facebook, Instagram N/A N/A 127
11 findeling n n n y n n y n n 9 n N/A N/A N/A 243
12 spottedbylocals n y n n n y n n n 9 n Twitter, Facebook, Instagram N/A N/A 39
13 coolcousin n y n n n y n n n 0 n Facebook, Twitter, Instagram N/A N/A N/A
Facebook, Twitter, Instagram
y n y n y n y n n 8 n 5 Paypal 262
14 locamo Vimeo Pinterest
15 helfen-shop n y n n n n n n y 5 n Facebook, Instagram N/A N/A 2600
16 dcshopsmall y y n y n n n y n 19 n Instagram N/A N/A 56
17 kauflokal n y y n n n y n n 11 n Facebook, Instagram, Youtube N/A N/A 250
18 kauflokal-badneustadt n y n n n n n n y 15 n Facebook N/A N/A 123
19 vorfreude n y n n n n n n y 1 n Facebook, Instagram N/A N/A 100
20 livebuylocal y y y y y n y n n 13 n Facebook, Instagram, Pinterest 6 Paypal 20
21 yategolocal n y n n n n n y n 13 n Facebook, Twitter N/A N/A 4000
22 gemeinsamhannover n y n n n n n n y 9 n Facebook, Instagram N/A N/A 1000
23 locally-inspired y n y n n y n n n 7 y Facebook, Instagram 3 Paypal 1062
24 supportyourcity n y n n n n n n y N/A n Facebook, Instagram N/A N/A 70
25 locals.faceslaces y n n y n n y n n 3 n Facebook, VK, Instagram 2 N/A 50
Where y = yes, n = no, N/A = not available

In terms of geographical coverage, 5 platforms out of 25 are aimed at covering

countries all over the world. They provide potential customers with the opportunity
to select a city on all available continents. Once selected, users can browse the
shops or merchandising offered by these local shops. 7 platforms include shops
located only within the country, while another 3 platforms include only those
located within a specific region or federal state. In contrast to other platforms, 10
platforms place local stores within a particular city (Figure 5):

25
 Geographic coverage

19%

39% Global
Country
Region
27% City

15%

Figure 5: Preferred geographic coverage of existing LSPs

The number of local stores placed on platforms varies. The maximum number of
local stores observed is 4000, whereas the minimum is 3. On average most
platforms include 100-250 local stores. As for the geographical coverage of the
platforms, there has not been identified a certain pattern, however, 2 out of 3
regional platforms contain the biggest number of stores among all other
platforms, 4000 and 2600 stores correspondingly (Table 3).

Regarding the communication which is recommended for the platform growth and
eventual support for local stores that was mentioned in the previous sections of
the literature review,118 it is noted that 22 platforms are present on social media.
The most used social media channels are Facebook, Instagram and Twitter
(Figure 6).

118
cf. Gupta et al., 2020, pp. 26ff.

26
 Social media presence

2% 4%
4%

11% Facebook
Instagram
45%
Twitter
Youtube
VK
Pinterest
34%

Figure 6: Preferred social media channels of existing LSPs

In addition, only 5 out of 25 platforms include the review section to leave feedback
for a local store or product, whereas 20 analysed platforms exclude this option
on their websites. Therefore, only 19% of the platforms allow users to share their
feedback (Figure 7).

Communication

19%

Reviews
No reviews

81%

Figure 7: Presence of review section in existing LSPs

27
Furthermore, each of the platform includes various number of categories that in
some cases are divided into subcategories. The maximum number of the
observed categories in platforms for local shops are 20, whereas the minimum
number is 1. The categories of some platforms are not identified at all.

In terms of payment, 6 out of 9 transactional platforms or marketplaces offer e-

wallets as a payment method or an additional security for potential customers,
such as PayPal, the importance of which was highlighted in the literature review.
What is more, the number of available payment methods on the transactional
platforms range from 2 till 6. 3 out of 9 analysed transactional platforms offer a
voucher as a form of transaction. Alternatively, a digital voucher can be
purchased and redeemed directly in-store. Finally, 3 out 25 platform show a clear
focus on the customer relation management by obliging a potential customer to
create a personal account within the platform before proceeding to a payment.

2 of the 25 platforms are mainly focused on blogging. These platforms are

included in the analysis for the reason that they meet the requirements of the
search criteria: on the one hand they include customers, on the other hand they
include local stores, i.e., suppliers, although the local stores do not cooperate
directly with the platform. This means that the blogger takes on the role of
recommending a particular local store.

As for the user experience and user interface (UI/UX), platforms provide a
different result. While some platforms, e.g. Locamo, shows a close resemblance
of the interface of well-known giant marketplaces, others, according the
observation, offer less user-friendly interface.

Regarding delivery options, 5 transactional platforms offer a shipment in the form

of click and collect or shipment directly to the customer.

28
 3.4. Survey analysis
3.4.1. Data collection
The survey was conducted in June 2021. The responses were obtained and
distributed through social media channels and individual contacts. This included
respondents of all ages, genders and nationalities with the majority of
respondents representing citizens and residents of Germany.

The survey was conducted via a survey administration software Google Forms
and comprised two different sections: the first section focused on the awareness
of the local shopping platform and the assessment of the willingness to use it,
whereas the second section focused on the criteria and requirements that are
relevant for a potential customer to use or shop on the platform.

The survey was organised in a digital form where respondents were given a link
and could fill it out themselves. Nevertheless, around 50% of the survey
responses were collected face-to-face where respondents' answers were
recorded by the survey owner and manually added to the survey spreadsheet.

It should be noted that the questions were designed to be short, understandable,

simple and to some extent entertaining manner in order to obtain 100% response
to all questions and qualitative answers. For the reason that the estimated time
to complete a survey required around 5-7 minutes, respondents were not
reluctant to invest their time and answer the questions.

The survey is based on the results of the content analysis carried out in the
previous section, through which attributes shared across all platforms were
identified. Further identification of attributes is also contributed by another
study,119 which identified and recommended attributes of an e-shop and also
these attributes were identified for the use in future studies. The limitation of the
referred source is that the attribute search was chosen specifically for an organic
online shop, therefore in this study only those attributes were selected that are

119 Ingaldi et al.,2019.

29
unified and can also be applied in a local shopping platform. Below is a list of
attributes a local shopping platform can have which were separated into seven
different categories, such as user interface, payment, platform type,
communication, logistics, price and CSR (Table 4).

The respondents were able to identify “positive”, “neutral” and “negative”

attributes by answering the following questions: “I like it”, “I expect it”, “I’m
neutral”, “I can tolerate it”, “I dislike it”. From these answers it is possible to
identify, based on the Kano model, the “must-be”, “one dimensional”, “reverse”,
“indifferent” and “contradiction” attributes, which allow to assess customers’
acceptance and expectations of a local platform and to compare these results
with existing platforms of a similar type; to analyse whether existing platforms are
meeting customer requirements, since gaining "critical mass" from users
constitutes one of the most important aspects of the platform success, as
mentioned in the previous sections of the literature review.

The questionnaire consists of a total of 27 questions, where 9 questions belong

to the first part, which identify categories such as the age of the respondent,
interest and experience with local shopping platforms, while the remaining 18
questions are used for the analysis of the Kano model.120

The first part of the survey includes questions related to eleven different
categories that are designed to determine the age group of the respondents, their
potential interest in using the platform, and their preference for shopping locally.
In addition, this part of the questionnaire includes some of the attributes that could
not be identified with the Kano model, i.e. specific social media channels that
customers would follow, number of categories that potential users would prefer
to browse, preferred platform type, and CSR activities carried out by the platform
operator.

120 cf. Appendix 3: Survey Questionnaire, p. 57.

30
Table 4: List of platform attributes121
Attributes of a local shopping platform
Number
1 Well organized platform with a friendly user interface
User experience

2 Qualified and well-organized images

3 Include a certain number of categories
4 Stores storytelling
5 Include exact contact information about stores

6 Include a digital wallet (Paypal)

Payment

7 Create an account before making a purchase

8 Marketplace
Type

9 Store locator (i.e., list stores and their contact information only)

10 Include local stores within a specific geographic area

11 Be present on social media channels
Communication

12 Be active on specific social media channels

An option to leave a review and read feedback about a product or
13
store
14 Include blog posts

15 Different forms of delivery

Logistics

16 Track the purchase delivery

17 Return goods free of charge

18 Shipment within 3-5 days

19 Regular promotions
Price

20 Below average prices

21 A high price in exchange for high quality goods
22 Platform CSR actions
Other

23 Use a platform free of charge

The final 18 questions are split into two parts in which a.) the positive attribute
and b.) the negative, namely the nonexistence of the same positive attribute, of
shopping locally are queried. Subsequently, the a.) and b.) responses are

121 Based on the content analysis and Ingaldi et al.,2019, p. 12.

31
evaluated using the Kano evaluation model (Table 5) so that the category
introduced by Noriaki Kano could be identified.

Table 5: Kano evaluation model122

Negative
I like it I expect it I am I can I dislike it
neutral tolerate it
I like it Q A A A O
I expect it R I I I M
Positive

I am neutral R I I I M
I can tolerate it R I I I M
I dislike it R R R R Q
Where A = attractive, M =must-have, I = indifferent, R = customers dislike it, Q = contradiction

Consequently, each respondent's answer is analysed separately which results in

determining the final category for each attribute. After analysing 67 responses for
the 16 attributes and assessing each of them, this data is used to calculate the
satisfaction and dissatisfaction indices for each attribute. The satisfaction and
dissatisfaction indices are used in order to determine the extent to which a
customer is satisfied when the positive attribute is given, and also the degree to
which this customer is dissatisfied when the positive attribute is missing. The
formulas for calculating the above data are as follows:123

A+O
Satisfaction index =
A+O+M+I

O+M
Dissatisfaction index = − 124
(A + O + M + I)

122 Ingaldi et al.,2019, p. 12.

123 Ibid
124 Ibid

32
The rating range for satisfaction index is (0,1), while that for dissatisfaction index
is (0,-1), wherein any value close to 1 signifies high satisfaction, while the one
close to -1 indicates a high level of dissatisfaction.

3.4.2. Data analysis

It is essential to highlight that the survey is focused on the local shopping
platform, and more specifically the desire of customers to shop or use the
location, as well as to identify the requirements that meet users needs.

It should be noted that three attributes were incorporated into the first part of the
survey and excluded from the second part for the reason that these could not be
easily identified using the Kano model analysis, as mentioned previously.
Consequently, the numbers in the table exclude certain Attributes, such as
Attribute 3, 8, 9, 10, 12, 21, and 22 (Table 4).

A total of 67 responses received during the survey reveals that 88% of

respondents are aged 25-39 (Table 6). Respondents aged under 24 years old as
well as those over 40 years old make up the least percentage of participants in
the survey, i.e., 9% and 3%, respectively. Among those who participated in the
survey most frequently are students and full-time employees.

88% of respondents have never heard of local shopping platforms, with 66%
having never used or shopped on such platforms. Thus, giant marketplaces such
as Amazon, eBay or Etsy are currently considered to be the preferred location for
shopping local. Nevertheless, 73.1% of respondents view this platform as a place
they would be interested in visiting or shopping.

33
Table 6: Results of the survey analysis

Customer preferences for a local shopping platform

Category Possible Answer Results (%)
≤24 9
25-39 88
Age
40-60 3
61≥ 0
Marketplace 65.7
Preferred platform type
Store locator 34.3
2 3
5 9
Number of preferred categories (1 6 19.4
to 10) 7 17.9
8 11.9
10 38.8
Ich kauf local 6
Vorfreude.kaufen 3
Spotted by locals 6
Existing platforms awareness Yatego local 3
Live buy local 3
Other platforms 0
Never heard of them 88.1
Directly at the local store 35.8
Through the local online store 14.9
Preference for local shopping
Amazon, eBay or Etsy 46.3
location
Other 3
None of the above 0
Yes 73.1
Interest in shopping on a local
No 26.9
platform
Maybe 0
Yes 31.3
Experience in shopping on local
No 65.7
platforms
Maybe 3
Around 100 local stores 34.3
Number of shops desired to be Around 500 local stores 9
included on the platform Around 1000 local stores 11.9
Neutral 44.8

34
 Local stores within my city 31.3
Local stores within my region 29.9
Preference for geographical
Local stores within the country 9
coverage
Local stores globally 29.9
None of the above 0
Reddit 6
YouTube 0
Instagram 50.7
Social media channels preferred
Facebook 19.4
Twitter 0
None 23.9
I like it 49.3
I expect it 9
Platform
Neutral 41.8
CSR actions
It does not matter 0
I dislike it 0

The data from the survey analysis helps to evaluate each attribute and relate it to
the appropriate category using the Kano evaluation model (Table 5). The
respondents' answers contrast with each other, as well as there is a contradiction
in the assessment of the category for Attribute 4 since it is defined as both
attractive and indifferent at the same time.

It should also be noted that the survey was conducted in a time of the Covid-19
pandemic, during which the travel restrictions had eased, though the economic
situation and shopping behavior were still uncertain. The shopping behavior
discussed in the previous sections has caused both customers and businesses
to switch to digital and online channels.

35
 4. Results

4.1. User requirements assessment

Most attributes, 10 out of 16, are identified as “attractive” features, according to
the results (Table 7). To be more precise, respondents identify the ability to
browse on a platform with a user-friendly interface, qualified images, exact
contact information of each store, story behind each store, different delivery
options, shipment tracking, purchase delivery within 3-5 days, as well as regular
promotions and below-average prices as attractive attributes. In addition, digital
wallets, such as PayPal represent an attractive attribute the absence of which
would lead to dissatisfaction. It is also worth noting that digital wallets were
identified in the previous chapter as a requirement of the platform owner to secure
customers' payment information and data.

Table 7: Kano survey results

Answers
Attribute Attribute Satisfaction Dissatisfaction
A M O I R
number* Assessment Index Index
1 44 4 4 15 0 A 0,72 -0,12
2 36 6 2 23 0 A 0,57 -0,12
4 28 9 2 28 0 A/I 0,45 -0,16
5 30 10 0 27 0 A 0,45 -0,15
6 28 25 4 10 0 A 0,48 -0,43
7 4 8 2 37 16 I 0,12 -0,20
11 22 6 2 35 2 I 0,37 -0,12
13 19 24 14 8 2 M 0,51 -0,58
14 4 2 0 59 2 I 0,06 -0,03
15 48 2 4 13 0 A 0,78 -0,09
16 24 23 10 10 0 A 0,51 -0,49
17 14 20 25 6 2 O 0,60 -0,69
18 35 14 0 14 4 A 0,56 -0,22
19 28 6 11 22 0 A 0,58 -0,25
20 29 2 6 16 12 A 0,66 -0,15
23 8 22 19 16 2 M 0,42 -0,63
where A = attractive, O = one-dimensional; M =must-have, I indifferent, R = reverse

36
There is identified only single “one-dimensional” attribute, specifically Attribute
17, which is the possibility to return goods free of charge. Further satisfaction and
dissatisfaction indices draw the following conclusion: the option to return
purchased goods free of charge would make customers satisfied (0.60), while the
absence of this option would lead to customer dissatisfaction (-0.69).

Two further attributes are assessed as “must-have”. Both leaving and viewing
reviews represent a must-have attribute for potential customers. Interestingly, it
should be noted that even though reviews are a must-have attribute for
respondents, some of the respondents express their scepticism regarding
reviews authenticity. To be more specific, it is desired that the reviews are
genuine. Another "must-have" attribute is the ability to use a platform free of
charge.

Finally, 3 attributes were identified as "indifferent". Therefore, blog posts placed

on these platforms would not make potential users satisfied, nor would the
absence of this attribute lead to dissatisfaction. Most respondents are neutral to
the presence of the platform on social media channels, and the lack of it would
not make them dissatisfied either. Furthermore, if the platform is active on social
media, then Instagram would be favored. In addition, account creation prior to
purchase is evaluated as an indifferent attribute.

The other platform attributes that could not be identified with the Kano model
show the following result: 66% of respondents would like a platform to be a
marketplace, as well as 39% of respondents would prefer it to have more than 10
categories. Customers are neutral to the critical mass of stores within platforms,
but at least 100 stores are expressed as a preference. In terms of platforms
geographical coverage, customers would prefer either city, regional, or global
platforms; country platforms are less desirable.

In addition, there is a contradiction in attributes 18 and 20, i.e., shipping within 3-

5 days and below-average prices, in which both positive and negative responses

37
are marked as "I like" and "I don't like," respectively. Specifically, respondents
mark the desire for below-average prices as " I like" , while the same response is
given to the question about above-average prices. The comment section helped
to identify that customers prefer below-average prices, while they are also willing
to pay above-average prices in exchange for a high-quality product. In terms of
delivery time, it is found that respondents whose answers contradict desire
delivery in less than 3-5 days.

As for the satisfaction and dissatisfaction indexes calculated in Table 7, the

obtained data not only helps to evaluate category of an attribute, but also evaluate
the extent to which the presence or absence of a certain feature affects
customers engagement. Therefore, it has been identified that user-friendly
interface, qualified and well-structured images, different forms of delivery, below
average prices and promotions make customers satisfied, however the lack of
these features would not lead to a strong dissatisfaction. In contrast, the presence
of a digital wallet as a payment option, reviews, shipment tracking, returning
products free of charge would make customers satisfied, and these can be
identified as required options for the reason that the lack of these attributes would
make customers dissatisfied and therefore could trigger them ot to use or shop
in a platform. Interestingly, the integration of blog posts into a platform would not
trigger neither customer satisfaction or dissatisfaction. Customers would also not
be dissatisfied if there are not many delivery options, however it is important to
them to track a shipment and return the product free of charge as it will lead to a
dissatisfaction.

In summary, the analysis of the requirements for the attributes, classified into 7
different groups (Table 4), yielded the following results:

Platform type: marketplace is found to be the preferred platform type identified by

most respondents. Potential users express their interest in shopping and
browsing on a local shopping platform, however, they are not familiar with the
existence of this type of platform. Respondents' answers to the question about

38
the minimum number of shops and geographical coverage they would like to see
on a platform is diverse. However, it is found that a platform should contain at
least 100 shops with a focus on either small local shops within a city or region, or
cover shops all over the world.

User experience: most of the respondents find a friendly user interface, images
and contact information about the shops, such as address, phone number as well
as the location on the map as an attractive feature. In addition, users would also
like to know more information about the individual shops, including a general
overview of the assortment, their shop concept, history and origin. All these
attributes would satisfy customers, especially well-structured user interface.
Although it should be noted that the absence of the positive attributes would also
not lead to a high level of dissatisfaction.

Payment: the presence of a digital wallet, such as PayPal, is identified as an

attractive attribute that would lead to customer satisfaction (SI 0.48), just as the
absence of this payment method would increase user dissatisfaction (SI 0.43). In
addition, creating an account before purchase is identified as an indifferent
attribute, which does not make users satisfied if they must create it, as the
satisfaction index is identified to be 0.12 (SI).

Communication: the attributes classified into this group ended up with diverse
assessment: potential users assess the presence of a platform on social media
as an “indifferent” attribute, however the lack of it will not lead to customers
dissatisfaction (DI -0.12). Instagram would be the preferred channel customers
would follow. Similar assessment refers to the blog posts, i.e. “indifferent”
attribute, which presence would not satisfy customers as well as its absence
would not lead to the dissatisfaction. In contrast to other attributes, leaving and
viewing reviews is identified as a “must-have”. The lack of reviews on a platform
would lead to the high level of dissatisfaction (DI -0,58) as well as the presence
of reviews would make potential users satisfied (SI 0,51).

39
Logistics: returning goods free of charge is identified as “one-dimensional”
attribute based on the survey analysis. The lack of this option means a high level
of customer dissatisfaction (DI -0,69), whereas the ability to send back items
without additional costs would make potential users satisfied (SI 0,60). The other
attributes included to this group are identified as “attractive”. Interestingly, the
ability to choose different forms of delivery is identified as the feature that would
be the most satisfied to customers (SI 0,78), although the lack of it will not make
customers dissatisfied (DI -0,09). The ability to track the purchase delivery leads
to a high level of satisfaction (SI 0,51), whereas the lack of this option (DI -0.49)
would make customers dissatisfied. The time of the purchase delivery is desired
to be within 3-5 days, although if it is not possible, customers dissatisfaction level
is not rated high (DI -0,22).

Price: regular promotions and below average prices are identified as “attractive”
attributes and would certainly lead to customers satisfaction (SI 0,58 and 0,66
correspondingly), although the absence of these attributes would not make
customers dissatisfied to a high degree. Moreover, 41% of the respondents
express their readiness to pay above average price with the condition that in
exchange they receive goods of a high quality.

Other: most potential users would be satisfied if a platform owner carries out
actions towards CSR (e.g. involving in volunteer work, donating a portion of the
profits to charity, education sector, environment etc.) and it has been identified
as an “attractive” attribute, although if they do not find this information it would
not make respondents dissatisfied (DI -0,15). In addition, most of respondents do
not accept the fact of visiting or using a platform with additional charges (DI -0,63)
and it is assessed as a “must-have” attribute.

3.1. Existing platforms attributes evaluation

Comparing the result of the survey analysis with the content analysis on the
features offered on existing local shopping platforms, the following findings arise:

40
more than a half of the of the respondents (66%) would prefer to visit a platform
as a marketplace and thus purchase local products without being redirected to
physical stores, whereas most of the existing shopping local platforms (67%)
identified in this paper are store locators. The information about the
predominance of shop locators in current markets is also confirmed in other
studies.125

Regarding the assessment of the geographical coverage requirement, it can be

concluded that potential users are less likely to prefer shopping platforms
covering local shops within specific countries, while city, regional and global
platforms are favoured. In full transaction platforms, customers rated the digital
wallet as an attractive requirement, the lack of which would lead to a high level of
dissatisfaction, although only six of the existing shopping platforms identified
within this paper include this method.

Interestingly, 81% of the reviewed platforms do not include a review section to

leave of write one, although for potential users this requirement is defined as a
“must-have attribute” the absence of which leads to a high dissatisfaction, and
which also means that a customer is satisfied if this option is present.

What is more, although social media is an “indifferent” feature for a user surveyed
in this paper, the presence of it would increase the satisfaction level. Almost all
of the reviewed platforms (22 out of 25) are present on various social media
channels. Facebook is identified as the most frequent and focused channel
among others, i.e. out of all social media channels Facebook constitute 46%,
whereas Instagram 34%, Twitter 11%. For a user, in contrast, Instagram is
identified as the most desired channel, i.e., 51% of the respondents expressed
this preference.

Moreover, just as user requirements vary for the number of suppliers, i.e., local
shops placed on a platform, and most of the potential users are neutral about the

125 cf. Bärsch et al., 2019.

41
number of shops to be placed, 100 locations were identified as the minimum
desired requirements from customers. If comparing this requirement to the status
quo on the existing platforms the number of the observed placed stores varied
from 10 to 4000. Therefore, 42% of the reviewed platforms do not fulfil this
requirement as they include up to 99 local stores, according to the observation.
Although this requirement is identified by customers as indifferent, in most of the
reviewed literature mentioned in the previous sections, reaching the “critical
mass”, i.e., the number of stores, is one of the most essential tasks that identify
platform success or failure.

Regarding the number of categories desired, a pattern emerged that most

respondents preferred it to include more than 6, with a higher tendency towards
10 categories, with 53% of platforms meeting this requirement, including between
6 and 9 categories, and 33% including more than 10 categories. Also, as
mentioned previously, it has also been revealed that a potential user would be
dissatisfied when a platform includes a monthly payment subscription to browse
or shop in there, therefore all of the reviewed platforms within this paper fulfil this
requirement.

The only one-dimensional attribute, as mentioned in the section above, is a free

product return, and as noted, the presence of this attribute indicates satisfaction,
whereas its absence would lead to the highest level of dissatisfaction. This
attribute can only be associated with transactional or full-transactional platforms,
i.e. marketplaces. Unfortunately, of all the marketplaces and transactional
platforms examined in this paper, only one platform, namely Kauflokal, clearly
indicates the possibility of free returns, on other platforms it was either not
evident, or was not explicitly indicated or available at all.

42
 4. Conclusion

Since local stores with a traditional business model are challenged by the
pressure of accelerated digital transformation, the aim of this thesis was to
evaluate a local shopping platform as a means to help local independent retailers
overcome the challenges of the Covid-19 pandemic, through an analysis of user
requirements.

The applied methodology to reach the research objectives led to the following
results: the literature review facilitated in the identification of financial, technical,
managerial as well as marketing resource constraints of local stores as one of
the prerequisites and thus a challenge to tackle with the accelerated digital
transformation. Moreover, the identified shift in consumer behaviour to focus on
a single shopping location in the digital space indicates a certain degree of
devaluation of the physical in-store experience, which places e-commerce
platforms at the forefront.

Therefore, the reviewed literature strongly supports the importance of creating

value for all sides of the ecosystem through a local shopping platform designed
to meet the requirements of the stakeholders, i.e., the platform owner, the local
retailers and the users. Given that achieving critical mass on both sides has been
identified as one of the crucial requirements for the success of the platform, this
thesis sheds light on the user requirements side, which was identified as a higher
priority at the beginning of the platform development cycle.

The results of the content analysis show that local shopping platforms in the form
of non-marketplaces, i.e., store locators, currently predominate the market, while
the results of the survey analysis identify a marketplace as the preferred platform
type by potential users. In addition, while most of the platforms show an active
presence on Facebook and Instagram as social media channels, the findings of
the content analysis revealed that most of the observed platforms exclude a
review section as a communication attribute. In contrast, the survey results clearly

43
indicate the necessity of the option to leave a review on the platform, while the
social media presence as well as the blog posts section are seen as indifferent.

One of the other striking findings of this research is that, of all respondents, the
majority expressed a strong interest in using a local shopping platform, although
they are not aware of existing platforms nor have they used one in the past. This
draws attention to the need for marketing efforts to raise awareness of this type
of e-commerce platform.

In addition, this study has highlighted must-have, one-dimensional and attractive

user requirements, to which it is relevant to give special attention, while indifferent
qualities require a lower priority, and the reverse attributes are to be excluded.
Thus, this thesis also makes a practical contribution to the development of
existing and potential local shopping platforms in meeting user requirements.

However, there are some limitations of this study, such as the sample size of
existing local shopping platforms, the number and age of respondents surveyed.
Moreover, the analysed user requirements may change over time, just as
attribute assessments may be re-categorised. Consequently, future research
may focus on a larger sample size of existing local shopping platforms, broader
geographical coverage, and include a greater number of respondents or focus on
a particular age group. In addition, the study could also target other stakeholders
involved, such as local retailers and the platform owner.

44
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Appendix
Appendix 1: Customer journey analysis126

126 cf. Deloitte, 2020.

55
Appendix 2: Stakeholders’ requirements127

Stakeholder Requirement Platform function

Shop at a single location Marketplace
Emotional response Features and functionalities other than “buy-sell”
Complementary solutions, communication, value
Entertainment
Customer

capture
Great information search Interface and usability; critical mass
Logistics service Cooperation with shipping companies and stores
Secure customer data, payment data, use e-
Security
wallets
Overcome digital
Platform infrastructure, domain, web space
transformation burden
Local store

Marketplace, store location, customer

Increase revenue stream
engagement, communication
Wide geographic reach Marketing, platform web space
Low-cost sales channel Costs takeover in return for monetization
Competitive advantage Synergy effect
Profit Monetization
Platform owner

Platform growth, reach Marketing acquisition, strategy design and

critical mass engagement
Shared costs (IT,
Reach critical mass from store side, monetization
maintenance)

127 Own elaboration based on the reviewed literature, p. 17.

56
Appendix 3: Survey Questionnaire

SECTION 1
1. What is your age group?
1.) <24
2.) 25-39
3.) 40-60
4.) 61>

2. Which of the following platforms have you ever heard of?

1.) Findeling
2.) Ich kauf lokal
3.) Locamo
4.) Lokal kaufen 24
5.) Lokal Einkaufen
6.) Vorfreude kaufen
7.) Lokal kaufen 100% Heimat
8.) Spotted by locals
9.) Yatego local
10.) Support your local city
11.) Live buy local
12.) Never heard of them

3. Where would you most like to shop local?

1.) Directly at the local store
2.) Through the local online store
3.) Amazon, Ebay or Etsy
4.) None of the above
5.) Other

4. Have you ever used a local shopping platform?

1.) Yes
2.) No
3.) Maybe

5. Would you be interested in shopping on a local platform?

1.) Yes
2.) No
3.) Maybe

6. I would be interested to shop on a local platform if:

1.) it covers local stores within my city
2.) it covers local stores within my region
3.) it covers local stores within the country
4.) it covers local stores globally
5.) none of the above

57
 7. I would be interested to shop on a local platform if it includes:
1.) around 100 local stores
2.) around 500 local stores
3.) around 1000 local stores
4.) neutral

8. Which of the platform type would you prefer to use?

1.) Marketplace (i.e., a platform where one can buy goods or services)

2.) Store locator (i.e., a platform by

which a person can be directed to the
address of a local store)

9. Would you support a shopping platform with strong CSR initiatives

(e.g. involving in volunteer work, donating a portion of the profits to charity,
education sector, environment)?
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

SECTION 2
What do you think of the following characteristics on any shopping
platform?

1. A user-friendly interface?
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

1.1. Non-user friendly interface?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

2. Qualified and well-structured images?

1.) I like it
2.) I expect it
3.) I am neutral

58
4.) I can tolerate it
5.) I dislike it

2.2 Non-qualified and unwell-structured images?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

3. Find store contact information?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

3.1 Inability to find store contact information?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

4. Leave and read reviews?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

4.1. Inability to leave and read reviews?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

5. Blog posts presence?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

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 5.1. Absence of blog posts?
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

6. Create an account before making a purchase?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

6.1 Inability to create an account before making a purchase?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

7. A digital wallet (e.g. PayPal) as a payment method?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

7.1. Absence of a digital wallet (e.g. PayPal) as a payment method?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

8. Pay monthly subscription to use a platform?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

8.1 Use a shopping platform free of charge?

1.) I like it
2.) I expect it

60
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

9. Shopping platform having a social media channel?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

9.1. Shopping platform NOT having a social media channel?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

10. Which shopping platform social media channel would you follow?
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

11. Different forms of delivery?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

11.1 One form of delivery?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

12. Shipment tracking?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

61
 12.1 Inability to track a shipment?
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

13. Shipment within 3-5 days?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

13.1. Shipment longer than 5 days?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

14. Pay additional costs for returning goods?

1.) I expect it
2.) I am neutral
3.) I can tolerate it
4.) I dislike it

14.1. Return goods free of charge?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

15. Below average prices?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

15.1. Above average prices in exchange for high quality goods?

1.) I like it
2.) I expect it

62
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

16. Regular promotions?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

16.1. No promotions on a platform?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

17. Find out the story behind each local store? (e.g. when and how the store
was created)
1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

17.1 Absence of stories behind each local store?

1.) I like it
2.) I expect it
3.) I am neutral
4.) I can tolerate it
5.) I dislike it

18. How many categories would you prefer to see?

(e.g., clothing, shoes, food & beverages, home decoration etc.)
1.) 1
2.) 2
3.) 3
4.) 4
5.) 5
6.) 6
7.) 7
8.) 8
9.) 9
10.) 10

63
Appendix 4: Questionnaire results

64
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71
72
73
74
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Declaration in
accordance with § 18 Para. 4 Nr. 7
APO THI

____________________________________________________________________________

Declaration

I hereby declare that this thesis is my own work, that I have not presented it
elsewhere for examination purposes and that I have not used any sources or aids
other than those stated. I have marked verbatim and indirect quotations as such.

Ingolstadt, 29.07.2021
(Date)

(Signature)

Anna, Serebryakova