When Big Platforms Go Local
BIA/Kelsey’s Leading in Local conference kicked off on Tuesday in San Francisco with a keynote address from Blake Irving, CEO of GoDaddy, who spoke about the company’s plans to offer a wide array of services focused on the small business market, including custom domain extensions, ecommerce plugins, and more. Most significantly, the speech represented what became a theme throughout the day’s presentations: big platforms are going local.
GoDaddy’s foray into the local space centers on the company’s recent acquisition of San Francisco-based startup Locu, whose specialty is real-time syndication of local listing content from a central dashboard to multiple publishers like Yelp, Google, and Bing. According to Irving’s vision, Locu’s syndication platform will be utilized by small businesses to drive discovery marketing, so that, with mobile phone in hand, consumers can receive relevant, timely offers and businesses will be able to take advantage of a much shorter and more direct purchase funnel than is available in any other medium. (Google recently reported that half of mobile searches concluding in a transaction do so within an hour.)
As Irving indicated, the trick in providing such a service is to give consumers sufficient control that they do not feel bombarded by marketing messages (a la Minority Report).
GoDaddy’s massive customer base is comprised largely of what Irving terms VSBs or very small businesses; he claims, in fact, that 85% of all small businesses have fewer than five employees. Capturing as they do a significant share of the VSB market, GoDaddy’s example encapsulates the challenge and the opportunity of large platforms that want to become local platform providers.
Though the company’s business has long extended beyond domain sales, domains have remained the core offering, and have provided a simple value proposition most small businesses can readily understand. Local listings management has proven comparatively difficult to explain or make meaningful to the same customer base. For the new venture to be successful, GoDaddy will have to figure out how to simplify that message without diluting the value. On the plus side, the real-time aspect of Locu’s service has built-in appeal, offering lots of potential for messaging that is flexible, seasonal, and constantly changing to reflect what works and what doesn’t.
Jody Ford, Vice President of eBay Marketplaces and former head of eBay UK, spoke later in the day and struck a similar chord. Like GoDaddy, eBay is actively used by millions of small businesses already, who upload a percentage of their inventory to the platform in order to reach a broader audience. Also like GoDaddy, eBay is actively exploring how to make its service more local.
A key initiative is eBay Now, available in select cities such as San Francisco and New York. The service lets customers order products from select stores and have an eBay “valet” deliver the product in about an hour. Ford reports that eBay Now will launch in 25 cities in 2014. The recent launch in Dallas was facilitated by a partnership with Shutl, a marketplace of couriers, and Ford says eBay will increasingly rely on third parties to supply delivery services.
The idea behind eBay Now is not too different from that of delivery startups like New-York-based WunWun, and might seem at first to have little to do with eBay’s core competence. However, it’s clear the initiative is part of a broader strategy to collapse the difference between online and offline purchasing. Select retailers like Best Buy are also participating in a service where consumers can purchase online via eBay and get free delivery to a local store location.
More forward thinking still is a pilot program with Argos, one of the largest retailers in the UK. Argos has made itself available as an eBay pickup location for products ordered from 25 different sellers. Ford reported that the service now includes 50,000 product listings with availability at 150 pickup locations.
Also of interest are virtual storefronts in New York and San Francisco, where eBay works with retailers like Kate Spade Saturday and Tom’s Shoes to offer consumers the ability to browse for and purchase products at a physical storefront equipped with a digital display. Ford envisioned that such retail displays might soon be available in non-traditional locations for retail.
As BIA/Kelsey’s Rick Ducey mentioned during the session, all of this has echoes of Jeff Bezos’s recent announcement on 60 Minutes about Amazon drones delivering products to one’s door in 30 minutes. Thought the Amazon plan may seem far-fetched, it speaks vividly to the notion that large online platforms are working hard to localize their inventories, and even to redefine what “local” means.