Creativity has never been easier. The dominating trend points to consumers creating more content re-blogging, re-tweeting and re-posting material to express their own unique perspective. It’s not just limited to the creation of intangibles though. Material production in the future will be facilitated online by Etsy, funded by Kickstarter, and produced in residential neighborhoods . A new generation of upstart manufacturer is blurring the line between consumer and producer. Imagine a future flooded with countless products to buy.
The middleman on two wheels
While in college I did a stint as a bike shop employee. Three times a week at 10AM, a nondescript van would double park out front and haphazardly unload its innards onto the showroom floor. I was tasked with inventory and keystoning.
“keystone markup” – doubling your costs for an item to arrive at its price. This is a common tactic in retailing because it simplifies pricing decisions and, over time in that industry, has proven itself as a formula that typically covers costs and provides a reasonable profit margin. Source: Startup Nation
This simple doubling of price is universal in pricing low cost accessories . If you’re producing the Superlative Bike Tire™ for $1 and wholesale it for $2, keystoning would bring the retail price to +$4. Clearly the middleman is driving the price up significantly.
Direct to consumer courtesy of the internet
For the modern goods producer, the financial incentive of eliminating the middleman is clear. An upstart company can increase their margins and lower their MSRP by selling their goods virtually. Joe Consumer meanwhile can take pride in encouraging innovation by supporting the innovators directly.
With all the advantages of this model, the major challenge for new companies will not be in sales or manufacturing, but bringing their goods to the attention of buyers. The challenge for the consumer will be focusing their attention on the right goods. When everyone’s mom, sister, and brother is a producer, we’ll need to filter the deluge of brand messaging else expect to washed away in the mass of creativity.
The future retailer — the curator
The future of the store is the showroom. Its raison d’etre is to provide a space that facilitates the physical experience of handling goods thereby driving sales online and hopefully generating affiliate revenue in return for the service.
Think of the retailer here as a physical curator – bringing a chosen collection of products into the same room. At the same time, they charge a fee to the producers for the privilege. The upstart producer is at a disadvantage when it comes to the physical showroom because they have neither the revenue or volume to warrant such an expense.
A showroom of zeroes and ones
Without the spatial constraints of a brick & mortar establishment, the digital showroom can hold an infinite number of curated items within its walls. However, vast curated collections aren’t necessarily a good thing. Physical constraints serve to effectively stem decision fatigue in the retail experience. Who wants to have the hassle of deciding from the hundreds of ‘bike tires’ available online? Certainly not me.
Whereas the digital showroom democratizes discovery by allowing everyone to produce and showcase their collections, it simultaneously dilutes the voice of any single message.
There is no doubt the virtual showroom is coming. As we venture into new territories, discovery is the elephant in the room. In order for small scale producers to gain traction in an attention economy, marketing of their goods must go hand-in-hand with crowd sourced curation, at the same time curators must showcase original content to gain credibility.
In the age of information abundance, contextualizing your content is no longer just an option, it’s required.