Periodic Reporting for period 1 - LocaLine (Everything Local, On-line.)
Reporting period: 2017-02-01 to 2017-07-31
LocaLine is an essential component in allowing small and local shopkeepers to succeed financially when put up to larger competitors, notably during the current wave of digitalization and connected objects. Their competitors are growing in number, whether they be groups that have existed for decades, or new on-line competitors that have known how to adapt the supply to consumers’ demands. In order to do the same, small shopkeepers need new and innovative tools that correspond to the consumer’s demand and habits. What’s more, these tools are needed before small shops risk financial failure (due to a growing difference between supply and demand for services) which would result in the abandonment of the once vibrant and active downtown areas of small, medium and large cities across Europe.
The studies led during phase one of the Horizon 2020 project “Everything Local, On-Line. -- LocaLine” had the principal objective of understanding the current market and legislative situations in Europe and more specifically France, the United Kingdom and Germany concerning local shops and alternative selling solutions (take-away, delivery, drive, click & collect, e- and m-commerce). These studies shed light on the current market situation with local shops across the three target countries:
existing means allowing small and local shops to meet consumers’ demands and face up to larger competitors,
the consumers’ demands and consumption trends in each market,
each market’s openness to innovative, alternative solutions concerning shopkeepers themselves, their current equipment and trends, and consumers’ habits and trends.
The studies also go on to create a census of local, national and European legislation that inhibit or encourage projects such as LocaLine. These legal studies shed light on the current political situations and openness to innovative projects such as LocaLine as well as the means put into place by different public institutions to support and protect small and local shops during the digital change.
1. Market Study
In France, despite the fact that more and more French people adhere to on-line shopping, the number of local shops continue to progress. The sectors where we can note the most shops are butcher shops, bakeries, convenience stores, florists and clothing shops. The domains that have known the greatest growth are bakeries and conveniences stores with foodstuffs. In the food sector, both demand and services provided such as “drive” have appeared and it is likely that this trend will continue to grow over the coming years.
In the United Kingdom, butcher shops and bakeries are the two local shops most visited by British consumers. Contrary to trends in France, these two kinds of shops continue to diminish in number. Convenience stores have increased from 2016 to 2017.
In Germany total turnover and shop lot surface have continued to increase from 2014 to 2016. The foodstuff sector is the most important on the German market; however, the number of sales points providing foodstuffs has lowered since 2015 in all German regions.
2. User study in the French market
Only a small percentage of local shopkeepers use alternative sales practices and more commonly
in large or medium towns
in larger shops (as defined by the number of employees),
in shops that do both B2B and B2C (as compared to juste B2C).
On-line sales are the most common sort of alternative sales. Otherwise the quantitative survey confirms the statistics indicated by the general market study concerning alternative sales strategies.
Digital sales solutions (notably concerning cash register systems) are more often used by bakeries and shops that do both B2B and B2C. More than half of these solutions also manage stock, have a dashboard and a customer loyalty programme. Contrary to trends expressed previously, small shops are more inclined to renewing their on-site equipment and the majority more specifically so as to digitalize their sales solutions.
3. E-commerce/M-commerce in France, the UK and Germany
Turnover generated by e- & m-commerce sales continue to grow throughout these three countries. British buyers are more inclined to on-line shopping than German and French consumers both in terms of quantity and turnover. Germans and British are more likely to use their telephone to buy on-line with over half of on-line shoppers buying via their smartphone.
4. Everything connected in Europe
The three target countries have launched digitalization strategies in terms of infrastructure, industry, education, economy and internet security. Institutions and councillors are available to SMEs for their digitization process.
5. Legal feasibility of launching an innovative and disruptive project for shopkeepers in France, the UK and Germany
A multitude of legal issues are at stake within the scope of exploitation of the project LocaLine. Specific provisions applicable to alternative sales also begin to come into force. The project operations and all the legal rules applicable to them are governed by the principles of transparency and security, with the will to ensure consumer protection and fair competition in the single market. The protection of personal data is also one of the main concerns of European and state authorities.
At its conception and throughout its operation, the Project must comply with the principles of personal data protection of Privacy by Design: ""every new technology processing personal data or allowing it to be processed must guarantee, from its conception and at each use, even if not originally intended, the highest possible level of data protection"", and of Privacy by Default: ""whoever processes personal data should always allow the persons concerned to obtain quickly and easily the highest possible level of protection"".
These moral values which the European Union seeks are translated into practice by many obligations for alternative sales operators and require the implementation of concrete actions concerning:
The technology’s architecture;
Contractual undertakings of external providers (for certification, payment, online notices, etc.);
Recourse to independent third parties for implementation and sustainability of the Project;
Management of illegal content and obligations related to the protection of personal data, including the appointment of a DPO, etc.
The Project will also be subject to continuous changes and evolutions in the rules and principles stated by international, European and local legislation, and the court’s interpretation.
After implementation, Localine will have the following positive impacts:
-Promote local economy
-Provide a tool to local and small shops to face up to competitive e-stores and groups with competitive services, pricing and availability
-Animate downtown areas
-Offer a European alternative to American e-commerce businesses
-Aline supply & demand for small and local shops
-Increase digital accessibility for buying local
-Improve shopkeeper growth and success (new shops/new jobs)
Impact for APITIC:
-Increase market size and profiles
-Diversify sector activity
-Conquer new markets (both by shop domain and geographical location)
-Drastically increase annual turnover
-Develop internal team in number and skills.