Category: Business model innovation

Methods and case studies of Business model innovation

Business model innovationInnovationMarketing 3.0Tourism trends

Connected Museums and connected learning

The presentation below was originally given as a keynote in Taiwan to the Chinese Association of Museums.

Our belief is that the technology like Conducttr can create “intelligent interpretation” – personalized connected experiences that see the museum as part of a deeper ecosystem that includes informal and formal learning.

In the diagram presented here, a cloud-based intelligence understands the learner’s current interest and tailors physical and digital environments to suit.

Note that a common problem for major museums is traffic flow. That is, most visitors want to see the museum’s top attraction. Using Conducttr connected to traffic sensors, guides and screens can be adapted and tweaks to direct visitors to less busy parts of the museum.

 

This blogpost is from  http://www.tstoryteller.com/blog

Business model innovationCollaborative business modelsCollaborative cultureInnovationTourism trends

Dinner at my home? It’s 30 Euros

What is a SMART destination? These may be defined in many ways. They are destinations that think and advance strategically, improving competitiveness and searching positioning through effectiveness. Becoming a SMART is no more than a strategy to enhance the destination value by leveraging both the cultural and natural heritage, developing innovative resources, improving the efficiency in the production processes and the distribution, which finally propels the sustainable development. This transformation generates positive effects in all sub-sectors such as energy, health services, security, culture, etc. thanks to the cross-destination impact of the tourism activity.

The key concepts that set SMART destinations apart from conventional ones are accessibility, innovation, technology and sustainability. Among these concepts, new technologies are the ones which are more likely to be perceived by the tourist, namely mobile applications, augmented reality and everything related to data smart management.

There are 4 key concepts upon which Smart destinations are developed:

  • Technology/Big Data
    • Innovation
    • Sustainability: social, economic, cultural and environmental
    • Accessibility

The development of the SMART concept in destinations consists mainly in working to attain a higher profitability in the daily exploitation of the resources. This is to be achieved by engaging both the local community and the tourists in order to enhance interaction between them. There are already some examples of Smart destinations, such as El Hierro island in the Canary Archipelago. Some of its main achievements are the energetic self-sufficiency and the pollution reduction, which have been achieved through actions such as:

  • Waste converted into energy
  • Environment camouflage of telecom and energy facilities and equipment (solar panels, antenna, etc.) within the landscape.
  • Reduction of the visual impact in the buildings and facilities construction, by using local volcanic stone instead of bricks.
  • It has gained awareness and branding by sharing and marketing its experiences in the social networks.

Other actions carried out in SMART destinations encompass:

  • Mobile Applications
  • Tourism Intelligence System, including data transportation and information Smart management, which altogether turn the destination into a SMART destination.
  • Smart office; a common working place where to unify processes which produces a work synergy and allows sense and common methodology guidelines in the transformation towards an intelligent city.
  • Beaches with free wifi

It is important to mention Singapore Smart City, which is on the way to become the first SMART nation worldwide. The country is working on its Master Plan for the next 10 years, which will be focused on the development of smart communities propelled by integration and innovation.

This blogpost is based on http://www.visionesdelturismo.es/smart-destinations/

Business model innovationCollaborative business modelsInnovationTourism trends

Guides that are not guides

As has happened with the accommodation business, namely with Airbnb, the collaborative platform business model is also developing in the tourist guides business. I have personally experienced one of these platform’s services in the city of Prague.

Thanks to these platforms it is no longer strange that the tourists are offered free guided tours in great urban destinations, without any trick. In my case, I used the services of Sandeman’s New Europe, which is already present in 18 cities. At the beginning of the tour, the guide explained that his income comes from tips, and so it was not mandatory to pay even 1 Euro.

The tour lasted more than 3 hours and it was really entertaining, with good quality content. The guide was brilliant and received quite a lot of tips. But, attracted by the quality of this Guided tour, the day after I did another one, but paying. This business works actually like a freemium model.  In fact, there are many more businesses offering free guided tours in Prague. And they have their rivalry moves, like guerrilla marketing actions, competing for the best locations, etc.

But this new fashion not only takes place in the large cities. The Greeters movement is emerging also in smaller cities, like Bilbao. The first company operating this business model in Bilbao is actually called Bilbao Greeters, and is part of the international network Global Greeters Network. The Greeters are locals offering guided tours with the authenticity of a local resident’s knowledge and perspective, who knows the traditions, habits and secrets beyond the usual tourist information available. In the Basque Country the Tourist Guides are not regulated, and so there cannot be any conflict in this case. Unlike in the previous case of “New Europe”, the Greeters are not professional guides and do not accept tips.  However, to make a booking you need to be registered as partner, which costs 12€ per year.

Finally, there are many online platforms allowing people to offer their tourist services worldwide. Besides platforms such as Vayable, Viator or Isango, marketing all kind of experiences –from guided tours to cooking lessons-, there are many others offering guided visits by the destination’s residents.

Local Guiding is a platform oriented to “changing the way people travel, experiencing the local life as it is, not like the conventional tourism agencies pretend it to be”. They are already offering guided tours in more than 20 Spanish destinations.

Tours by locals are the veterans in this sector, as they have been operating since 2008 from their headquarters in Vancouver. They nowadays offer guided tours in many countries worldwide.

Like a local is the concept developed through a mobile application. Destination residents contribute to editing the local guide with recommendations, advice, routes, etc. and obtain revenue from the application’s management firm.

Finally, there is the Spanish portal called Ciceroner , promising to offer “unique and personal experiences, the only ones that can be really different and memorable”. It is still in Beta development phase, but it already offers a considerable amount of products in many destinations. It gives the option to gift the guided tours just like Smartbox and many others, but promising a superior experiential value.

As we can see, it is an emergent business model, with many suppliers and intermediaries operating in the market. However, this new fashion business model arouses many questions:

  • Is it just a fashion or a new reality?
  • Are these services for specific segments or for all types of visitors?
  • Is it necessary to further regulate this type of businesses to ensure a fair competition with the traditional models, or should they be given free regin instead?
  • Are these new models going to operate in urban destinations only, or they are likely to operate in beach destinations traditionally dominated by tour-operators?
  • Do these business models affect somehow the destinations’ image? Should the DMOs do something to get some profit from it or to manage it for branding purposes?

I invite you to reflect upon these questions, and encourage you to give your opinion

This blogpost is from http://www.visionesdelturismo.es/guias-que-no-son-guias/

Business model innovationCollaborative business modelsInnovationMarketing 3.0Strategy

The innovation challenge in destinations

Research and innovation will have a fundamental role in the competitive improvement of destinations. Any policy for the destination development has to include a vision and an innovative orientation that brings some sort of competitive advantage.

In the Spanish economy, the tourism industry has proved to be one of the most dynamic sectors, which generates multiplying effects in the local economies in all sub-sectors directly and indirectly related to tourism. This multiplying effect together with the sector’s evolution worldwide has contributed decisively to increase competition, which in turn makes the industry develop strategies oriented towards the improvement of its competitiveness.

The new market after the changes in the offer and demand, requires tailored services and activities, with high quality standards, which makes attaining customer satisfaction more difficult than ever before. In this regard, tourism offer has to be organized according to the targeted market segments requirements in order to be successful. Unlike in past times, market penetration, promotion, price setting, product quality and quantity are variables defined by the demand and not by the offer, for it is necessary that the service and activity production in the tourism sector takes into consideration this new scenario, and so new destination models restructuring the links and relationships between stakeholders are being developed.

In any case, research and innovation will have a fundamental role in the destination’s competitiveness improvement. Any action for the successful development of the destination has to include a vision and an innovative orientation that can generate some kind of competitive advantage. The main challenges to foster competitiveness in destinations are the following:

Innovate in mechanisms and cooperation formulas and strategic partnerships. It is basic to develop mechanisms that work both from the public and the private scope, to boost new cooperation models between businesses and public-private partnership, as a way to gain profitability, dimension and commitment in the development of the tourist sector.

Innovate to improve the sector’s competitiveness. There should be techniques and strategies to improve the business and the destination’s competitiveness. This includes the development of Innovation Plans for the improvement of business models, management models, service processes and the destination’s business marketing.

Innovate for the introduction of new tourism products and consolidating the profitability of the current ones. It will be necessary to foster the creation of unique tourism products based on new business models, build upon the capacities and unique resources of the destination, with a high experiential value, using the ICT and being socially and environmentally friendly.

Leverage the resources and hidden heritage. It is crucial to develop new formulas for leveraging tourism resources that are complementary to the traditional ones, unknown or unexploited, so as to achieve the profitable consolidation so long as they create an outstanding experience and expand the revenue streams.

Innovate in destination’s promotion and communication formulas. There is nowadays a communicational saturation, which makes it necessary to face the future with promotion innovative mechanisms which allow optimization of the destination’s visibility.

Innovate in tourism product marketing. There will have to be developed new methods and tools to market tourism products, in order to favor the sector’s competitive improvement and control the dependence on external channels, in a way that guarantees some influence power. In this context, it is fundamental to develop strategies to improve the intelligence and the knowledge of the products and its results, and the client and its consuming habits.

Innovate in client relationship formulas. The strategy will have to develop new client management formulas. Starting up innovative mechanisms to do CRM is vitally important not only to retain clients, but also to achieve a more effective marketing.

This blogpost is from http://www.visionesdelturismo.es/innovacion-de-los-destinos-turisticos/

Business model innovationCollaborative business modelsCollaborative culture

Collaborative tourism: is it an original business model?

When we talk about collaborative tourism or tourism peer to peer, we refer to a new trend in the way of traveling based upon sharing basic resources such as accommodation, transport means or personal experiences with other travelers through platforms where the host publishes his/her offer and the tourist makes the booking.

Theoretically, this phenomenon comes from the collaborative economy model, where consumers may also become suppliers by sharing their means with other consumers, also operating on a global scope, prioritizing human relationship above competition and selfishness. The presentation results in being attractive to more and more tourists, who do not really know the business model completely.

Due to the constant transformation of the virtual economy, the task of identifying and describing virtual business models has turned to be quite hard. However, since this P2P platform business model usually determines it’s success, it is no longer unknown: platforms meet the needs of both supplier and buyer, and take a commission from the booked services price.

Checking the four main collaborative platforms operating in Spain for the four types of services available (eating, accommodation, transport and experiences), we find that their revenue sources are not so different from the traditional tourism intermediation models:

  • AirBnB: charges a commission between 6 to 12%, plus 3% of the conversion rate.
  • BlaBlaCar: depending on the amount of the transaction, it charges 1,60€ for transactions from 1 to 8€ or a commission of 20% for transactions of more than 8€.
  • EatWith: it takes a commission of 15% of the transaction.
  • Trip4Real: it takes 25% of the transaction.

A similar procedure is used for any other tourism intermediary, such as a travel agency, a tour-operator, broker, etc. The difference remains in that these intermediaries comply with the regulations in terms of safety, health and taxes, whereas most of the accommodation and transport means offered in the collaborative platforms do not comply with them.

Therefore, the consumer of collaborative platforms pays a lower price due to the non-compliance with the aforementioned regulations, and takes the risk of suffering any kind of accident without the safety prevention means. Furthermore, despite the social sharing philosophy upon which the platform is created, many suppliers operate for profit rather than for the aim of sharing cost or experiences. However, this is difficult to prove and control.

The hospitality sector’s opinion. The outburst of the tourism collaborative platforms has transformed many housing apartments into competitors for the hotels and regulated tourist apartments, and so it has turned into an important issue for the Public Administration.

According to the Spanish Confederation of Hotels and Tourist Apartments, there are only two possible solutions to this conflict: the total banning of the platform operations –as has happened in many major cities-, or the obligation for the apartments to comply with the same regulations as the current regulated tourist apartments.

It is necessary to take into account that the tourism sector in Spain is hyper-regulated. There are around 250 regulations at the European level referring to intellectual property, consume, safety and payment means, plus those from the local administration. All in all it entails a great deal of costs that do not apply to the collaborative platform operators, including the VAT, the police files, fiscal and sanitary costs. This is clearly a case of unfair competition. In this regard, there are many points to consider:

  • The regulations applying to these tourist housing apartments are different for every region in Spain, for it is necessary for the destination regulators to study them all in detail.
  • It is necessary to consider the product separately from the platform, taking into account that the platform operation is similar to the traditional channels such as the travel agencies, and so the same regulations should apply.
  • The evolution of the global society is likely to propel this paradigm beyond the current conditions, demanding solutions in terms of adapting the new regulation and policies.

This blogpost is from  http://www.visionesdelturismo.es/turismo-colaborativo/

Business model innovationBusiness trendsCollaborative business modelsCollaborative cultureEnvironmental sustainability

B2B sharing: the next logical step for Sharing Economy?

As it has been explained in many posts, collaboration is at the core of destinations 3.0. However, we have focused on the collaborative efforts to co-create or co-innovate with the participation of both individuals and businesses. Another type of collaboration is that of the sharing economy, nowadays in the spotlight because of business models such as Uber or Airbnb, based on peer to peer (P2P) collaboration in sharing resources.

But, what about business-to-business sharing?  B2B initiatives of the sharing economy may not be as well known as B2C’s, but some analysts consider the real power of peer-to-peer exchange may be found in B2B transactions, as businesses could better leverage the potential financial and operational benefits of jumping on the sharing economy bandwagon.

But first, it is necessary to be clear about what “sharing” means. Sharing Economy is a term currently used to designate many different ideas that could be also tagged with so disparate concepts as “gig economy” or “collaborative economy”. For the sake of the argument a sharing economy initiative could be described as one activating idle resources for usage, facilitating the paradigm of access versus ownership, and using technology to enable the matching between idle resources and its demand.

There are still many barriers to B2B sharing…

Key differences between B2B and P2P sharing may explain why you might not have heard as much about the B2B sharing economy as you have about B2C/P2P. For start, there is the cultural mindset we have mentioned so often in here: businesses have been shaped for decades to be competitors, not collaborators. The kind of relationships are used to is exclusively transactional. Owning more and better assets than others is supposed to be a key factor for success. Sharing resources does not come naturally to them, even if there is a benefit for doing it.

Then, there is also the legal hurdles or gaps that many P2P or B2C sharing initiatives are still sorting out. These hurdles are understandably more intimidating in the case of business to business interactions. Finally, the quality and user experience of the sharing economy services is also a factor to take into account. While a disappointing experience is not usually going to discourage a consumer to try again a particular P2P service choosing another peer, a business is less likely to pay for shared services when a bad experience could have a more significant consequences than, for instance, a driver too talky or too quiet in a shared ride.

… but its benefits could tip the scales

But these particular barriers for B2B sharing might be rapidly overcome as the economic environment compels business of all kind of shapes and sectors to leverage its benefits. The promising area of shared commercial services is vast and varied in its potential environmental and economic impacts. Certain B2B sharing services could provide many businesses, especially SMEs, with access to once inaccessible resources that those companies have no way to access if not through sharing. Besides, sharing resources streamlines companies, enabling them to operate faster. It can also allows them to react quickly to market changes in a less expensive and more efficient manner.

For instance in manufacturing, where the increasing versatility spur by flexible manufacturing technologies allows companies to share their production facilities and equipment much easier than in the past. Or in areas related with a bigger pressure for sustainability, where sharing large assets with significant carbon footprints as cars, trucks, industrial equipment or buildings can help to reach environment-friendly goals.

Some examples

The number of B2B sharing economy platforms is still low compared with their P2P counterparts, but some business-to-business players are already enabling businesses to share access to assets as such office space or underutilized machinery:

Sharemyoffice.co.uk lets businesses anywhere in the world advertise their spare desks or office space providing a portal for startups to find their first commercial business space.

Yard Club Rental, recently acquired by Caterpillar, provides a way for construction companies to share their equipment by renting it out when not in use by their own companies.

Floow2 is about sharing between companies every aspect of the supply chain… and more. The most popular categories are cars, trucks, meeting rooms, aerial platforms, communication specialist and designer (yes, professionals can also be shared).

Flexe wants to transform how logistics and supply chain professionals manage growth, inventory peaks, returns and new market entry creating warehouse networks that scale as necessary by connecting organizations that need warehousing space to organizations with extra space.

Breather wants to become the Airbnb for office space and meeting rooms.

Storefront specializes in retail spaces available for pop-up shops.

This post is based on http://www.co-society.com/b2b-sharing-next-logical-step-sharing-economy/

Business model innovationCollaborative business modelsCollaborative cultureStrategy

Basque SMEs collaborate to get larger and more global customers

Effective cooperation between local stakeholders is one of the key success factors for Tourism 3.0 to thrive, but this cooperation needs to be well focused on strategic goals, in a way that many different types of cooperation may be developed. This article explains how SMEs in the same region create an alliance developing four types of cooperation to gain and advantageous position in the international market.

Smart Factory Alliance is a partnership of several SMEs created in order to gain the kind of visibility that just bigger companies can achieve. The collaborative initiative has internationalization and global customers as one of its main goals. The partnership takes place in the growing market of the so called Industry 4.0, one of those emergent contexts of new technologies and disruption in which we think collaboration supposes a core element for its development.

Five companies in the IT sector from the Basque Country (Spain) have set up the Smart Factory alliance aiming to boost their internationalization and being able to obtain contracts with large companies. The alliance will allow partners to offer integral Industry 4.0 solutions to manufacturing companies.

Four types of collaboration. Each of the five companies is specialist in several areas, so the alliance adds on the competence and solutions of each of them, promoting a more integrated, specialized and competitive offer. According to Tomás Iriondo, CEO of Gaia, an industry cluster promoting the initiative, “by working together, these companies can now address more distant, larger and more complex clients thanks to a collective solutions map and a portfolio that becomes one of the widest for Industry 4.0 demands”.

To strengthen the partnership, Smart Factory Alliance has established four types of collaboration. Shared knowledge is considered the most important one. And the most critical, as this sharing will only be possible if first a climate of trust among partners is created. Another two kinds of collaboration will involve common communication strategies to reinforce visibility, and detection of customers and projects. Finally, setting up the Alliance comprised also the technical integration of products and software developed separately by each of the companies partnering.

The Basque culture has collaboration as one of the key values that make it more competitive than its neighboring regions’. It has proved to succeed in many other cooperative ventures. For instance, three years ago, ten Basque companies in the designer furniture and equipment sector joined forces to grow in the retail market. This is a subsector in the world of specialized furniture and equipment for all types of shops in which customers include from a single store to chains, franchises and brands, and large commercial areas or the design of showroom. It’s a huge market but competing for global customers requires a wide range of services.

Creating a common brand, Basque Retail, they can now meet this challenge because each of the firms has a specialized portfolio (furniture, security lights, wood cladding, design lamps …). The alliance makes possible for them to offer complete projects, that is to say, to ‘dress’ from top to bottom a single commercial site or hundreds of stores from the same chain or franchise.

Each one of the companies partnering at Basque Retail keep its own activity coexisting with the one generated by the common brand. The alliance is been possible despite being very different businesses. Some of them are small companies and never worked internationally, some others have been exporting for years. Turnover, sales and products are quite different, but their goal is the same one: to be able to offer a comprehensive solution to both a customer with a single store and one that has a thousand.

Collaboration leading to more collaboration. Internationalization has been also a main driver. Just recently, Basque Retail and its solutions were presented in Düsseldorf during the main global trade show for this sector. For most of partners in Basque Retail, with their sales limited to Spanish market until recently, been able to have a stand in Düsseldorf would have been unthinkable just few years ago.

Currently, close collaboration between companies is working so positively and leading to so many new ideas that they are even considering to create a new collaborative sub-brand focused on “sensorial marketing”, an increasing demand from brick and mortar commercial sites competing with online e-commerce.

This post is from www.co-society.com/basque-smes-collaborate-get-larger-global-customers/

Business model innovationBusiness trendsCollaborative business modelsCollaborative cultureCulture change

Business ecosystems come of age

As it has been explained in many posts and Whitepapers, one of the key success factors of destinations in their evolution towards the Vision of Tourism 3.0 is to develop an innovation ecosystem integrated by different types of contributors. In that regard, Business Trend Series Deloitte’s report Business ecosystems come of age presents a series of articles describing how businesses are moving beyond traditional industry silos and conjoining networked ecosystems, creating new opportunities for innovation.

The report offers a glimpse of how some view the rise of ecosystems as an opportunity for creating powerful new competitive advantage as it becomes increasingly possible for firms to deploy and activate assets they neither own nor control and expand the possible beyond of their expertise and activities.

This brief summary outlines the various subjects and ideas dealt with:

Introduction: A brief history of the concept of ecosystems applied to business and how it all started in the technology sector but now is also taking root far beyond.

Blurring boundaries, uncharted frontiers: Long-standing boundaries and constraints that have traditionally determined the evolution of business are dissolving, allowing new ecosystem possibilities to flourish.

Wicked opportunities: Many kinds of complex, dynamic, and seemingly intractable social challenges are being reframed and attacked with renewed vigor through ecosystems formed by unprecedented networks of NGOs, social entrepreneurs, governments, and even businesses coalescing around them.

Regulating ecosystems: Regulators are challenged to create policies and solutions that protect the public’s interests and are also dynamic enough to keep pace with innovation born through ecosystems.

Supply chains and value webs: A set of powerful developments have worked together to help transform the business environment, changing how supply chains are configured, further heightening their strategic significance for many firms, and creating new leadership imperatives for the years ahead. Now “companies don’t compete—supply chains do.”

The new calculus of corporate portfolios: The rise of business ecosystems is compelling strategists to value assets according to an additional calculus, often generating different conclusions about what should be owned.

The power of platforms: Properly designed business platforms can help create and capture new economic value and scale the potential for learning across entire ecosystems.

Minimum viable transformation: Business model transformations are not unprecedented, they have always happened. It is not even new that business model transformations must consider the evolution of a company’s broader ecosystem. What is new today is that such transformations must be considered and accomplished routinely—not as storm-of-the-century events.

You may download the document at Business ecosystems come of age

This article is from www.co-society.com/official-business-ecosystems-come-age-deloitte-confirmed/

Business model innovationCo-creationCollaborative business modelsInnovationMarketing 3.0

Case study: Trip4real. Tourism experience collaborative business model

Trip4real is a paradigmatic example of how the collaborative economy flourishes in new business models for the tourism industry. Founded in Barcelona by Gloria Molins, it connects local experience developers with tourists eager to discover the destination through tailored experiences for them. Trip4real is a collaborative platform where any local may market a tourism experience to help the tourist discover the destination from a particular point of view or live special interest experiences.

The platform acts like a marketplace and also as an intermediary, so the payment is controlled by the platform and it gets a commission out of it. After the payment is done, the supplier and the client are connected to meet and live the experience. The motivation behind this business model is the will of the tourists for discovering the destination off the beaten track, where the locals go, and the hidden secrets that cannot be found in the Guides, as well as the authenticity brought by the interactivity with locals, who facilitate a deeper understanding about the local culture.

The first platform was developed for Barcelona, but other platforms have been developed in Madrid, Lisbon, London, Paris, Rome, Dublin, Berlin, Amsterdam, Edinburgh and a handful of Spanish destinations.

As has happened with Uber, do you think that these business models may be treated as unfair competitors to the local “official” tour guides and incoming agencies? Do you think there should be any kind of restrictions to letting it legally compete with standard tourism service suppliers?
You may check further details at www.trip4real.com

Business model innovationCollaborative business modelsStrategy

Small local brands: You either collaborate or you’ll be intermediated

In Destinations 3.0, DMOs work as marketing platforms intermediating for the local businesses and joining efforts with those businesses to reach the global market, just in the way that thousands of niche companies are willing to enjoy the benefits of the level of visibility and consistency that only a more “mainstream” brand can offer. This article explains the imperative need for small businesses and brands to develop cooperative marketing platforms to avoid being intermediated by wholesalers with a much higher negotiation power.

Some early Internet evangelists promised anybody with a website and an e-commerce platform can have a global market no matter how small the company or where it is located. A theoretical true, that statement does not take into consideration the laws of Attention Economics that Internet itself is boldly proving right from the very first moment.

It’s also true “Long Tail” niche offers can overcome this barrier by the same differentiation and exclusivity that made them niche in the very first place. Yes, it’s possible to create a global audience or market by offering something nobody else is offering and then establishing a relationship with your customers leveraging all new media and tools available today. Yet, still, this level of differentiation is not always and for everybody possible.

Collaboration with others such niche brands can make this strategy less difficult and more potentially fruitful.  Good news is people seem to be rejecting the notion of large corporations and are looking for companies whose people and story they can connect with. Bad news is Attention Economics apply, making impossible for customers to have a relationship close enough with all niche brands that could be relevant to them in a particular moment.

This is why even living in a flat world we still need intermediaries. A different kind, but still intermediaries. But in the digital paradigm, once eliminated geographical proximity as a factor, we only need one of these intermediaries for each of the limited list of categories our minds can deal with, making monopolies or oligopolies a natural and logical outcome for every market.

Good for those understanding becoming the perfect interface for a particular category of products or services is the fast lane to success (and dollars) in the digital realm. Too bad for the ones who will have (or already have) to deal with a monopolist in order to make their products or services visible and purchasable. Too bad for thousands of musicians or app developers taken a cut of a third of every sale that would have been considered outrageous if taken by a local record or software shop. For every Etsy or Zappos of the world, there is the menace of them taking advantage of a dominant position, the threat of the “Upper Hand” syndrome we wrote about referring the case of Fulfillment by Amazon.

Collaboration will be the only possible answer for the convergence of a growing number of niche offers and the challenge for these companies of having enough scale for their offers to be visible and purchasable. If these companies do not create and own their own intermediation by collaborating with others, somebody else will create a digital intermediation for them.

Co-Society was recently involved in a project for an association of cooperatives looking for new roles in a changing, much different world in which the Co-op concept was born. There is still an opportunity to build many middleware platforms between consumers and niche offers, an opportunity for umbrella organizations representing smaller or local brands and offers with a promise to the consumer of a guaranteed consistency and quality. But for these to be owned by the smalls brands themselves, there will be no other way that to be implemented and managed by a more collaborative, democratic and horizontal organizations we are used to, organizations similar to the structure and mindset with which cooperatives were born more than a century and a half ago.

This article is from www.co-society.com/small-local-brands-either-collaborate-youll-intermediated/

Up to what extend could the local niche brand be differentiated from the destination brand if this niche business has to be marketed through the destination branded platform?