Forbes has an interesting piece examining why a variety of retailers have decided to package and sell or license what previously might have been thought of as proprietary technology to other retailers - in other words, competitors.
The sellers, Forbes observes, "likely see something of even greater value than sales in some of these collaborations – the shared data and telling customer insights they yield. (As long as it adds value and consumers are willing to share their data in these environments.)
"And those insights in turn lead to more effective sales opportunities: Nearly 50% of brands had experienced at least a 4% sales bump from sharing their data with retailers, according to Coresight research (nearly 27% saw a gain of at least 8%)."
Among the examples cited in the story are Walmart, which is offering its GoLocal delivery service to smaller retailers, and Amazon, which is doing the same with the Just-Walk-Out technology it first tested in Amazon Go stores.
Forbes writes, "No matter who the customer is, retailers know that getting the relationship right takes an optimal understanding of consumers and their needs and then, using that knowledge to create the right experiences. These retail services therefore will be tasked with the same challenges customer services face: a seismic-sensitive gauge to predict operational shifts, a constant eye toward next-stage needs and providing what the customer wants and sometimes what they don't expect – at a value.
"This is what one of the toughest industries in business demands. Competition is tough. But it makes retailers tougher, and working together may be the glue that cements the value they can bring."
- KC's View:
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I'm in favor of uncommon partnerships, but getting into bed with the enemy strikes me as a bridge too far.
At least the way Forbes characterizes it, these deals include shared intelligence about customers that makes everybody smarter, but I'd also argue that it also makes some companies - especially large, carnivorous ones - a lot more dangerous.
Let's be clear: one of the motivations is to create new revenue streams - but those are revenue streams that help to find the activities of competitors that do not have your best interests at heart.
I would only be in favor of arrangements such as these if they included a thick, impenetrable wall that would assure that the likes of Walmart and Amazon would not have access to any of my sales data. And even then, I must admit, these deals would make me nervous.
And even if promises are made and intentions seem to be good, never forget - in this scenario, you always are the frog, and Amazon/Walmart always will be the scorpion.
Always.
