Posts Tagged ‘purchasing’

Collaborative Consumption: a case study

Tuesday, October 26th, 2010

IMAG0089I found “Beyond Zipcar: Collaborative Consumption” by Rachel Botsman and Roo Rogers in the October Harvard Business Review very thought-provoking. The authors knit together the trends in short-term rental (Zipcar, Netflix), redistribution (Craigslist, Freecycle) and space-sharing (coworking, Airbnb) into a full-blown movement that dovetails with our post-recession austerity mindset.

While I was reading the article, it dawned on me that I was involved in some collaborative consumption right then and there. I have spent much of the year working in Chicago. Appalled by the price to rent cars and annoyed by having to take taxis everywhere, I bought an old bike on Craigslist to get around.

I used the bike through the summer and into the fall, and only now, with darkness coming too early for me to use the bike after work, I considered what to do with it. I could ship it home (which would cost almost as much as the bike did). Or, I could put it on Craigslist. Which I did.

A nice guy bought the bike last week for the same price I’d bought it for in May. I’d spent about $30 on repairs during the time I used it. All in, the bike cost me $6 per month, and I probably saved $600-800 on cab fare during that time.

Now, about that spare room we have that’s never being used…?

Customers are talking: here comes “Broadcast Shopping”

Tuesday, November 17th, 2009

This week Doc Searls posted on an idea called “Personal RFP.” In this model, people wishing to buy a product would be able to put together an open “request for proposal” – essentially, a specification for what they want to buy, including budget, and solicit bids from suppliers wanting to sell it to them. [Nothing even approximately like this exists today, except perhaps Priceline, the reverse-auction travel broker, which is full of compromises to the Personal RFP model.]

Scott Adams of “Dilbert” fame made a similar proposal, and he created a catchy name for this type of service. He called it “Broadcast Shopping,” and described it like this:

The standard shopping model needs to be reversed. Instead of the shopper acting as hunter, and the product hiding as prey, you should be able to describe in your own words what sort of thing you are looking for, and the vendors should use those footprints to hunt you down and make their pitch.

For example, let’s say you’re looking for new patio furniture. The words you might use to describe your needs would be useless for Google. You might say, for example, “I want something that goes with a Mediterranean home. It will be sitting on stained concrete that is sort of amber colored. It needs to be easy to clean because the birds will be all over it. And I’m on a budget.”

Your description would be broadcast to all patio furniture makers, and those who believe they have good solutions could contact you, preferably by leaving comments on the web page where you posted your needs. You could easily ignore any robotic spam responses and consider only the personalized responses that include pictures.

This is something kind of revolutionary. “Customers are talking” has meant, by and large, customers responding and reacting to what companies do to them. Companies release a product, change a service, or make a promise, and customers, through their stories, say what they think about that. Those stories influence other buyers, competitors, regulators, and (hopefully) the company itself.

“Broadcast Shopping” is talking, too, but it’s active, not reactive. The customer sets the agenda, and companies respond.

In Searls’ terms, it’s a type of “Vendor Relationship Management” system, as opposed to the Customer Relationship Management systems that many companies utilize today to help them sell and service customers.

There are many profound implications of broadcast shopping. One that comes to mind immediately is this: it will greatly reduce the benefit companies get from distribution scale. If I am asking people to supply me, anyone can respond. Today, I have to seek out suppliers, and the bigger they are, the easier (by and large) they are to find.

Using Adams’ example, a small provider of patio furniture, who could provide a set meeting his specifications, would be on par with Wal-Mart from a distribution standpoint – they each could respond to the Personal RFP.

Broadcast Shopping also undermines traditional branding. Because any company could respond to a customer request, many choices are available, along with information that allows customers to evaluate the proposals independent of the brand identity of the product.

Broadcast Shopping doesn’t exist yet. But Searls is convinced it will, and soon. He writes:

All this is not only do-able, but inevitable….

Google should be interested because Advertising in Reverse, or Broadcast Shopping (a term I love, by the way), will either undermine or replace the company’s standing business model (which pays for all those freebies we enjoy).

Microsoft should be interested because this could give them something Google doesn’t have yet.

Yahoo should be interested because they need something new that’s a winning idea. Amazon and eBay should be interested because they’re already in that business, though in a silo’d way.

Oracle should be interested because it will sell more databases and Sun gear.

Apple should be interested because it’s one more area where they can push for new standards on which the range of innovation goes through the roof.

Every retailer and intermediary should be interested because the promise of the Net for buyers is not an infinite variety of closed silos, but a truly open marketplace where any buyer can do business with any seller — and on the buyer’s terms and not just the seller’s.