“Consumer technology use has shifted the balance of power from retailers to shoppers,” we say these days, but has the industry fully grasped how far the pendulum could swing? “No!” says Doc Searls in a provocative WSJ column. He describes a future in which shoppers define and drive what could be called the “C2B” economy via “intentioncasts.” They broadcast their need to vendors who meet their terms and conditions, collect offers from them, and then make a selection. He calls it VRM (for Vendor Relationship Marketing), and it completely reverses the direction in which CRM flows.
Searls draws attention to new ways that individuals on the demand side will exercise power in business relationships. It’s a valuable insight, but groups are probably not a dead letter yet – especially shopper groups that congregate around common goals or desires. These can still gain power by doing acting in concert as these examples show.
- Shoppers who form buying groups to win the attention of sellers use their power to capture significantly greater value for their members than would otherwise be the case.
- Shoppers who focus on lower-cost suppliers in large groups in order to capture more of what’s called “consumer surplus” have the power to break up conventional supply/demand relationships in a market and challenge established pricing.
So don’t throw the baby out with the bathwater, but think seriously about the new form of market exchange Searls describes. Remember those guys who didn't bother testing the idea that housing prices could decline because they couldn't imagine it? Don't be like them. CRM is an important and essential component of retailing and will be for a long time to come, but don't let it blind you. It's not the only possible way that the retail world can work.