Thursday, March 09, 2006

Talkback: Buyer as centre of consumerism

By Vincent Heeringa

It's competitive as hell out there, and United States researchers tell us the cost of reaching consumers has skyrocketed.

One piece of research suggests that 50 years ago, 75 per cent of a product's final cost was in manufacturing and 25 per cent in marketing. Now it's 50/50.

The phenomenal rise of online trading portals such as Amazon, Trade Me, SmileCity, Ferrit and now Hateshopping.co.nz is based on finding faster and cheaper ways to link buyers and sellers.

Alan Mitchell, a UK marketing writer, believes these are just the beginning of a revolution that is fast putting the consumer in the driving seat. Mitchell predicts the emergence of buying agents that will broker deals on behalf of individuals - a sort of butler for the masses.

He calls them reverse marketing services because the marketing is done not by the seller ("hey kids") but by the buyer ("find me a new toy").

Mitchell calls the overall trend "buyer-centricity".

An expression of Mitchell's new world is Pureprofile, launched in September last year.

Pureprofile gives individuals an anonymous online shop window to display their "goods wanted". Sellers who engage an individual in a conversation about a product or service pay the individual for the privilege.

Pureprofile calls itself the first "reverse search engine" and its rapid uptake suggests it may work.

Or it may not. Trade Me tried a version of this two years ago. Trade Me founder Sam Morgan said it was an unmitigated failure because the global supply chain was optimised around suppliers not buyers.

What's certain is that the cost of traditional marketing shows no signs of falling, and there's a fantastic opportunity for any agent who can better bridge the gap between buyer and seller.

That might be something as brutal and anonymous as Trade Me.

It might be as left field as Telecom utilising its enormous reach into our daily life to create a Pureprofile equivalent - an extension of Ferrit maybe.

It might be a retailer like the Warehouse getting smart with its customer databases and acting as a genuine buyer's club.

As I see it, the winners will be those agents who behave the most like a good butler: trusted, loved and damned convenient.

* Vincent Heeringa is one of the founders of Idealog magazine and can be emailed using the link below.

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