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Against the background of urban transformation processes aggravated by e-commerce, this paper discusses chances and challenges of local online platforms. Three hypotheses are introduced. Firstly, the rapid emergence of numerous local online platforms in various European countries is linked to the urban heritage of the European City. Secondly, the success of these platforms depends on the integration of diverse services. Thirdly it is argued, that platforms need to adapt to future topics of smart retail which is why a more holistic approach is appropriate. A best practice analysis is conducted, which gives an insight into the variety and complexity of local online platforms. 1 ADAPT OR DIE: SPATIAL IMPACTS OF E-COMMERCE High growth rates in e-commerce have contributed to urban transformation processes in Europe in the last decade (Beckmann et al., 2016, p. 8). Location-wise, primary effects of e-commerce caused by market leaders such as Amazon and eBay are expected to change persisting structures in the retail sector. In Germany alone, a close-down of 50.000 shops is predicted until 2020 (HDE, 2016). As a consequence, shop vacancies rise and city centers decline (fig. 1). Figure 1: Shop vacancies in different (sub)urban settings in Leipzig (2018), own source. Whereas mainly small towns used to be affected, shop vacancies in city centers in e.g. Leipzig are already noticeable. Operation-wise, especially small and medium-sized owner-managed retailers struggle to get involved with omni-channel services, whereas chain stores tend to adapt faster to trends in ecommerce. 1.1 The Origin of Local Online Platforms For the last six years, diverse digital bottom-up retail initiatives in Germany and other European countries have been emerging. The main goal of these so called local online platforms (LOPs) is to retain purchasing power in the respective region, concerning only respective local, mainly brick and mortar retailers. LOPs network local retailers with a universal digital platform, such as homepage or app. Some platforms also contain location-based information, for example event calendars or information on local activities in the city centers. Either way, LOPs present a multilateral approach by initiating omni-channel services which aim to improve retailers’ perception through customers in digital and urban space, to survive on the market. Probably one of the most popular LOPs within the academic discourse that emerged in Germany is ‘Online City Wuppertal’. The platform started in 2013, funded as a pilot project of the joint initiative Schade, K., Hübscher, M. and Korzer, T. Smart Retail in Smart Cities: Best Practice Analysis of Local Online Platforms. DOI: 10.5220/0006844901470157 In Proceedings of the 15th International Joint Conference on e-Business and Telecommunications (ICETE 2018) Volume 1: DCNET, ICE-B, OPTICS, SIGMAP and WINSYS, pages 147-157 ISBN: 978-989-758-319-3 Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved 147 of the German state, its counties and cities, called ‘Nationale Stadtentwicklungspolitik’ (national urban development policy). The pilot project ‘Online City Wuppertal’ aims at transforming stationary retail, with the help of omni-channel services (Haderlein, 2018). The website of ‘Online City Wuppertal’ includes 59 different profiles of mainly local retailers who have a local store in Wuppertal. For local retailers, an advantage of the platform is that the operator helps local retailers, who do not have an own web shop, to sell their products online through the website of ‘Online City Wuppertal’. The website contains a large categorized web shop out of all the products the participating local retailers offer, like a local version of Amazon. Local retailers who already have an own web shop or website can also become members. For them, the advantage is that the platform has an own budget for marketing that is larger than the expected budget of a single local retailer. Thus, ‘Online City Wuppertal’ contributes to improving, the local retailers’ perception through customers in digital and urban space and to survive on the market. Additionally, the platform contains a few urban services, e.g. it informs about local events in the city center of Wuppertal. However, the success of ‘Online City Wuppertal’ seems to be unsteady for different reasons, e.g. the number of customers visiting and buying on the platform is low (Haderlein, 2018). By now, Germany counts more LOPs than any other country. The platforms try to follow the example of ‘Online City Wuppertal’ or even become more successful (CIMA, 2018). However, the platforms differ from each other concerning their functionalities and specializations. There seem to be relevant differences that lead to either success or failure of LOPs which is why the paper offers a best practice analysis. The authors aim to analyze chances and challenges of LOPs to offer smart retail services in smart cities. 1.2 Aim and Scope of the Paper To address the lack of research, a best practice analysis of LOPs is carried out, focusing on the chances and challenges of existing platforms. This is done in the light of smart cities. Within the analysis, the importance of a more holistic approach is demonstrated. We propose three hypotheses. Firstly, the high amount of LOPs in Europe raises the question, why similar strategies cannot be observed in comparable economic contexts such as North America. We explain this by means of a literature review of the historic development of each city model and argue that characteristics of the European City facilitate the emergence of local online platforms. Whereas most platforms’ focus lies on commerce, there are also LOPs that contain urban, especially city center-relevant services, in addition to retail services, such as ‘Online City Wuppertal’, e.g. they inform about local events or list local clubs. The location specific aspects help to distinguish cities and contribute to their uniqueness. Introducing the empirical analysis with the second hypothesis, we claim that the success of local online platforms depends on the integration of diverse services. The strength and competitiveness therefore lies in the location’s specific characteristics. Currently, one notices a rise and fall of LOPs. This might be due to the platforms’ still being in a starting phase. Also the high number of competitors plays a key role. We thirdly argue that local online platforms need to adapt to future topics of smart retail in order to survive on the market. 2 STATE OF THE ART IN