News & Analysis

How Digital Merchant Marketplaces Are Enabling Hyperlocal Commerce

April 20, 2012April 27, 2012 by Asif Khan

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When we think about online marketplaces, the giants in the field (eBay, Amazon and Craigslist) immediately come to mind. But a new crop of location-based marketplaces is now empowering consumers and small businesses alike to buy and sell products and services from one another in their own backyard.

Chicago seems to breed new players in this space: Windy City upstarts Grabio and Goshi are two prime examples. The idea behind them is simply to create fully mobile and localized applications aimed at transforming the classifieds marketplace.

Goshi allows people to use their mobile phones to post items they are both looking for, as well as items they want to sell. The beauty of this is that each post is tagged with a location to facilitate transactions within the local community. With Goshi, you simply take a picture with your phone, tag it with a location, and share it with world. It takes the city-based listing style of Craigslist and makes it mobile, pinpointing listings to exact locations around a user’s current radius. While many of the early use cases are consumer oriented, many SMBs are waking up to the potential as well.

For many merchants lead generation is a top priority and being found via hyperlocal search is becoming equally important. 52% of mobile-local search ads on the xAd network yielded calls to local businesses following the initial click in Q4 2011.

Through their location-based mobile commerce platform, Grabio helps local businesses and brands bring foot traffic to their brick-and-mortar stores at no cost. The platform enables consumers to discover all the great deals that local businesses are offering around them, saving time and money. You can even pay through the app and the pick up your order at the store just down the street.

Horatiu Boeriu, Grabio’s CEO, says the company is soon launching Best Buy-powered listings onto their location-based mobile commerce platform that will give users access to local deals at stores across the country: “We also have a tickets listings partnership with SeatQuest.com to provide tickets at sports events in the U.S. Other partnerships include college marketplaces, like Unibubble.co.uk, that work together with us to provide a location-based mobile marketplace at several universities in the U.K.”

It not just retail, real estate startups like Zillow and Trulia have applied a similar theory specifically to real estate listings. Both companies’ apps allow users to instantly browse properties nearby. Trulia, which has an app that focuses specifically on properties for rent or for sale, recently noted that the percentage of its online visitors who also used its mobile app was as high as 46% in some cities.

Craigslist and eBay have done a great job, but they have operated pretty much unchallenged for a decade. Now we have this intersection of location-based services and mobile, and the timing is right for merchants to embrace this technology to reach new audiences and ultimately increase profits.

Asif R. Khan is a veteran tech start-up, business development and marketing entrepreneur currently serving the community as founder and president of the Location Based Marketing Association (The LBMA). Weekly podcaster at This Week In Location Based Marketing every Monday. Can be found at @AsifRKhan @TheLBMA on Twitter.