Do You Really Think You Are About to Become a Commodity or Otherwise Be Disintermediated?

I never understood why the Trade Publications (of any industry) would constantly report on that industry's demise, commoditization, or irrelevance. I always wondered what that said about them and their future. I guess if they really believed it, they would have folded up their tents and stopped charging us…LOL!

The truth is that commoditization is an evolutionary process driven by advances in technology. And when I say technology, I really mean applied technology. Despite the trumpeting and the Big Tech monikers that keep some valuations astronomical, none of it is really new tech…it's just new applications of current tech—a critical and not talked about enough distinction.

Let's start with disintermediation.?

The first time I copped to the concept was when I heard my late/great mentor, Lester Wunderman, OBM, refer to the emerging Internet as the great Disintermediator— a driver of efficiency…that's what it really means. Yet, he foresaw the enormous opportunities for companies and people to pivot and thrive. New skills were required, and the old enterprises needed to get on the bandwagon. The danger wasn't just being pushed out of the process…it was getting pushed over the cliff that was the death knell.

Wunderman never subscribed to the notion, for example, that online selling would kill brick-and-mortar retail. On the contrary, he was already exploring how it added value to shopping and the customer experience. Unlike many, he always believed that the lazy answer was that all was dead and gone. Reality was much more interesting, and he's been proven right. So many "old" businesses that understood the power of digital enablement instead of fearing digital death are thriving.

Commoditization is a different challenge.?

Think about it. It's the ultimate democratization of a process...meaning that it doesn't disintermediate. It just takes away the competitive edge because now everyone can do it—easily.

And yet, it also opens up new and lucrative pathways for success with a unique competitive edge.

One of my favorite examples (and my mantra case) is all-around data…actually, customer data—names, addresses, and purchase data.

Back in the 1990s, the catalog industry was thriving. Remote selling, if you will, had reached new heights. What Sears had pioneered in the 1880s was now mainstream, niche, and everything in between. It was exciting! The credit card, new call center technology, and computers helped to add to the customer experience. CRM and customer modeling hit new heights as SAP and others brought new products to the market.

The core of it all (some thought) was your closely guarded customer list. Closely guarded…that was until you sold it (to make more money) to others (as long as they weren't competitors). List brokers were doing gang-buster business, and anyone who owned a list had very strict limits about who could and could not buy it.

During that time, I was a founding partner in an early digital play whose game plan was to buy up catalogs…consolidate their systems….use one big studio…get volume printing/mailing discounts through scale…etc., etc. And, of course, start bringing the catalogs online; thus, breaking through the cost walls that held so many back.

Then, along came a company called Abacus. They said..."You are fooling yourselves. Your lists don't make you competitive. You fool yourselves into thinking that your competitors can't get your names. You see, they will look to see who you sell to… buy their lists…de-dupe them, and voila!!"

You see, lists are a commodity. "Everyone...join our guild and give us your lists. We will enhance them..add other data…and you can then take out names"—with enhanced data based on the aggregate, which is much more valuable.

?But what is your competitive edge??

• Your products/merchandising
• Your marketing
• Your creative
• The insight you bring to your overall presentation
• Your targeting
• Your modeling (algorithm to you)

?Names? Lists? Nothing—mere commodity. Using it all smartly? Huge!

Abacus changed the business.

I think of them a lot as I watch the swirling around AI. I wonder, not panicking about how a computer will replace me, but rather excited about how I can use it to be even more competitive.

Bottom line:

• You don't need to be an expert on what makes anything work. You just need to know what it does and how to use it best to add more value.
• Understand what really will become a commodity, and don't become one with it. Let it go…but be the best at using its output or applying its power.
• Understand the profound difference between enablement and Harry Potter magic.

Don't despair. (See my IMAGINE on cheerleading…)?

Tom Hayes put it well:

“Commoditization is the enemy of meaning.”

And that has been my point!!!

Be meaningful…think about how you add meaning to everything. Don't be scared or demoralized (as so many are); rather, be the meaning in it all, and it will serve you.

OK…I'm a cheerleader, but that...friends, dear readers…is the point.

What do you think?