I have written extensively here about how the manipulated control of a manufacturer’s products by Mega-Customers has become one of the most powerful factors in business today.
In our previous book THE DISTRIBUTION TRAP and our forthcoming one, THE CUSTOMER TRAP: AVOIDING THE BIGGEST BUSINESS MISTAKE, Tim Wilkinson and I argue that concentrated commoditization occurs when a Mega-Customer is able to dominate the products and brands of those companies who innovate and create within a given industry.
The temptation for manufacturers to search out the Mega-Customer is almost irresistible. After all, they exist in every sector of the economy. And, they offer the hope of big volume.
In consumer retail, it is the big boxes: Walmart, Home Depot, and all the rest.
Online it is Amazon.
AutoNation drives a great deal of the selling of automobiles in America.
Boeing and Airbus dominate aviation; as do both AT&T and Verizon in telecom.
And, of course, at the top sits the U.S. Federal Government, with the nearly $1 trillion it spends in the private sector each year. Uncle Sam is the single largest buyer of everything from paperclips to pharmaceuticals, trucks, cell phones, airline tickets, legal services, energy, hotel rooms, medical care, and information technology.
To their credit, some manufacturers have realized the danger in dealing with Mega-Customers, and sought to discover alternatives channels.
I recently spoke with Mike Massey, a third generation retailer in the New Orleans-area who owns a chain of specialty outdoor stores.
Disillusioned with the predatory nature of Amazon- and it famous ability to squeeze the life out of suppliers- Massey and some friends decided to create another way for manufacturers to access their end-users.
It is called Locally.com
Massey says they realized, “there was a gap for shops who didn’t have an online presence. There was also a gap for shoppers who couldn’t explore their local shops using their Internet-connected devices. And, there was a gap for manufacturers that wanted their range of products serviced by professionals.”
Locally.com doesn’t sell products.
It facilitates the interaction between the manufacturer, the buyer, and the local store, charging a nominal fee each month to the retailer and vendor.
The website locates the shopper geographically. With that information, they assemble a marketplace consisting of both local, nearby products and additional products that can be bought from their online partners.
The idea seems to be major gaining traction as more and more retailers and vendors come on board each month.
Check it out.