Steinbeis mentors provide coaching support to young business founders linking up online searches with on-site shopping
Where can I find those running shoes, that school bag made from recycled plastic bottles, or that delicious wine from Spain? It’s so easy to find yourself on the internet again when looking for that certain something. At the click of a button, off goes that order for the desired goods. More and more downtown stores are suffering as a result of this purchasing behavior. Valentin Uhrmeister, Moritz Simsch, and Anna Pfeifer want to do something about this. Since June, stores in Constance have featured an orange octopus to indicate that they support an app linking online shops to their bricks-and-mortar retail outlets. The three young entrepreneurs have been working with Steinbeis coach Jens Freiter to make the system work.
Shopping via app – not just through Amazon and co., but through local stores: The three young business founders from Constance have set up a company called Nemms, which promises to revolutionize shopping behavior by enticing customers back to downtown stores. “Downtown stores stock most products – you just don’t know where,” says Moritz Simsch. So customers often have to traipse from store to store. Shopping online is often more convenient, but it can sometimes become irritating when you have to collect goods from a local parcel store or send everything back again. Nemms’ aim is to merge the convenience of online searches with local advice offered by stores. The app allows customers to ask questions which are forwarded to the stores to be answered.
“We were surprised by how quickly the stores were won over by this concept,” says Valentin Uhrmeister. Most stores said running an online shop themselves would not be profitable. They also said they frequently receive queries from customers via email anyway. Nemms’ founders say this is where they plan to plug the gap. The majority of outlets run by local traders in the city have already registered: 80 in all. The first 55 had to be acquired as customers, the others got in touch themselves. Lots of people from Constance already recognize the octopus logo. The app probably won’t convert hard-core Amazon customers, but the founders of the new company believe that seeing downtown areas go into decline has made lots of people start to think again. The trio believe that customers are more likely to go back into stores more often if they know they can find the product they’re looking for.
“More and more purely online providers – like My Muesli – have realized that online customers are not very loyal and so they’re now setting up stores in downtown locations,” says Anna Pfeifer. Having an actual outlet and people to give advice on site is a clear advantage for local businesses. The only missing link is the app. “This is where there’s definitely enough room for Nemms,” says the 31-year-old. Unlike Nemms, which has someone to talk to at the store, Amazon cannot provide access to someone to offer advice on which product to take.
The biggest problem for the trio from Constance during the startup phase is funding. Since setting up their company in early 2018, the young entrepreneurs have developed and continuously optimized the app. But until now, their idea has not earned them any money. Following approval from the Federal Ministry for Economic Affairs and Energy for an Exist startup stipend for innovative projects, all three entrepreneurs have given up their jobs in IT. But in 2019, Nemms will have to be self-supporting. The trio took part in several workshops with Steinbeis expert Jens Freiter to examine exactly how to make that happen. Freiter was a cofounder of Holidaycheck, which revolutionized the travel market. He also works as an expert for the Hilzingen Startup Initiative, which according to initiator and mayor Rupert Metzler has worked with 70 startups over the last 20 months alone.
“The biggest challenge is scaling up the business model,” says Freiter. This is because being able to live off the proceeds of Nemms will require the involvement of at least five communities. There are also a good number of competitors, like Findeck in Freiburg, Lokafox, Buy Lokal, and Atalanda, which all help local stores make the leap into the internet and they always want a slice of the cake for doing so. Even the big players like Google and eBay have discovered the merits of local retailing. Identifying the right strategy is not easy. When asked about the coaching with Steinbeis, Pfeifer says, “Looking at things from the outside in did us good.” They found it particularly useful that their Steinbeis expert had even set up a successful business himself.
The young entrepreneurs are now optimistic that their plan will work. Following in the footsteps of Constance, Karlsruhe and Aachen have now also come on board. Discussions are also underway with another large city in the north of Germany. The idea is to launch with a basic version, which is free, plus a subscription option that costs stores 25 euros per month. Stores can try out a free subscription version of the app for one month. The interest is certainly there. And if the firm does run into problems, their Steinbeis expert is close at hand: The startup center in the city is virtually right next door to all the startups.
Steinbeis Consulting Center Business Start-up (Stuttgart)
Steinbeis Consulting Center Sales Analytics (Hilzingen)