Companies jump into Web-supported local commerce
Internet shopping is going local.
Inspired by the success of Craigslist, a popular online classified site, a host of new businesses are making it easier for shoppers to buy and sell things to their neighbors. The emerging Web options appeal to consumers who are otherwise reluctant to shop online for a variety of reasons, ranging from concerns about fraud to unwillingness to pay for shipping. The local market also works particularly well for such items as used cars, pets and houses.
During the past three months, a flurry of companies have set up sites with names such as StepUp, ShopLocal and Cairo that help people do transactions with others in their own communities, or link them with local stores. The latest is LiveDeal. Like Craigslist, LiveDeal allows buyers and sellers to exchange basic information with no charge, setting up deals for bowling balls, guitars or baby cribs. Unlike Craigslist, which operates in bigger cities — 65 and counting — LiveDeal can connect buyers and sellers in most any town or rural area.
The boom in Web-supported local commerce has been prompted by the enormous popularity of Craigslist, which started in 1995 as a resource for San Franciscans looking for apartments and jobs. The site attracts huge numbers of dedicated users looking for everything from short-term romance to World Series tickets, with more than one billion page views a month.
EBay, the top Internet auctioneer, made other classified-listings investments during the past year, including the purchase of two international Web sites.
Other big players on the Internet are taking steps to increase their local presence. Yahoo Inc. already has its own classified-listings Web site and has been ramping up search-related features such as improved local mapping. Google Inc. and Microsoft Corp. have focused on offering local-oriented Web-search features that allow Internet users to find stores or services nearby, but both companies may develop more services in the future.
The battle over local commerce is a logical expansion: despite the rise of electronic commerce, more than half of all those who do shop on the Web prefer to purchase offline, according to NPD Group, a market-research firm.
The local sites, of course, pose a threat to newspapers, which garner much of their revenue from classified advertising.
Newspapers are firing back, however, experimenting with different pricing models and exploring new online ventures. ShopLocal is backed by CrossMedia Services, a venture owned by newspaper companies Knight Ridder Inc., Gannett Co., and the Tribune Co. It lets consumers type in their zip code to find out about promotions at local stores.