As more native VRM tools come into the hands of individuals, what happens to the whole supply chain? Or, put another way, what happens to supply in general when there are more and better ways of expressing demand?
I was talking a couple days ago about that with Michael Stolarczyk, one of the world’s leading authorities on supply chains and logistics, when he brought TaskRabbit up. He pointed to this piece in Wired, and it got me thinking about fourth parties.
Right after that conversation I had lunch with Jose B. Alvarez of Harvard Business School, and a former CEO of Stop & Shop/Giant-Landover. One of the points he made was this: “The original purpose of a merchant was to serve as an agent for the customer.”
In other words, second parties (vendors) were also what we’ve been calling fourth parties. That is, agents for the customer.
I think this is where Cluetrain was going in the first place with “Markets are conversations.” In Customer Loyalty Programs That Work, in Working Knowledge (also from Harvard Business School, and published that same day), Maggie Starvish probes Jose’s work on loyalty programs, and concludes with these paragraphs:
“We’re at a place where technologies allow for retailers to have two-way, back-and-forth interactions with customers,” says Alvarez. “With smartphones, you have location-based information, so you can communicate with customers where they actually are.”
Successful loyalty schemes require advanced technology—and age-old techniques. “It’s about going back to the basic roots and origins of retailing,” says Alvarez. “Talk to the customer, listen, find out what they want, and get it for them.”
VRM tools are ones that are the customer’s first, serving individuals as independent actors in the marketplace. In that sense neither TaskRabbit nor current loyalty schemes qualify as pure VRM tools. But the movements here are very friendly toward VRM, and I believe will welcome (or help toward) the emergence of pure VRM tools. Those would be ones, for example, with which the customer arrives with their own means and devices for saying “Hi. Listen. Here’s what I’m looking for.” If real conversation follows — even if it’s between digital agents for both sides — our goal with VRM will be met.