Is growth by aggregating services within the reach of all brands?
By Pierre Desangles
— Sep 17, 2018
In our digital age and in a system where everyone aggregates everyone else, is it possible for a brand to maintain its sovereignty, make the most of its identity and preserve its equity?
No more need to struggle or absorb; all a brand has to do is aggregate.
The American giant Google uses its lead in data, machine learning and interfaces (in particular, with Home, its smart speaker) to bring food distribution to its millions of users. The agreements that Google has signed with other giants, such as Carrefour or Walmart, brought the company nearly instantaneous expertise, thousands of references and ready-made logistics solutions. Basing its action on the concept of “if you can’t lick ’em, join ’em,” Google provides a golden opportunity for these retailers, who are behind in digital technology and threatened by Amazon. They’re ready to aggregate and earn a bit less, rather than remaining independent and frightening their shareholders.
The most valuable brands (Amazon, Apple, etc.) have all adopted this new strategy. Competition is no longer expressed as market share, but as “lifetime value”. This shows that the market is no longer merely a segment with offers or a collection of competitors; rather, it has become a household or a sum of expenditures (a life?). Now, competitors are all the other brands favored by the customer, whether or not they are positioned on the same traditional markets.
All sectors show a trend toward aggregation or the deployment of new ecosystems based on partners and third parties. Tourism is a representative example of what this means. Aggregation began forty years ago for business travelers and frequent fliers through alliances and loyalty programs (flight, hotel, taxi, rental, etc.). This has expanded to the general public with the growth of digital platforms like Tripadvisor, Airbnb or Booking, and the massification of low-cost travel (flight, hotel, taxi, rental, activities, visits, parking, insurance, conciergerie, etc.).
“Aggregation”? Nothing is new, but everything accelerates.
Long gone are the glory days of the RSS (Really Simple Syndication) feed, the symbol of IT sector aggregation in the 2000s. This feed gave producers access to contents from others and offered users the possibility of getting more information without having to change websites. And it gave producers greater visibility.
This is the basis of the aggregation principle: it increases the way traffic or an audience can be exploited by multiplying the sources of monetization with the greatest possible number of actors (complementary rather than competitors, if possible). In parallel, it increases the impact of benefits for users or repeat shoppers, and they have more advantages while having to make fewer trips. This was the thinking behind the first shopping centers and malls.
Today, the basic concepts behind shopping centers and RSS feeds are being combined on a very much broader scale. Society itself has entered the race to aggregate. The winners will be those who offer customers more by offering them everything. Everything? Everything. It’s almost a communistic or religious vision of society, a vision in which the absolute merchant is the only merchant. ONE. Like ONE country, like ONE god.
In this new market arrangement, Renault becomes a competitor of Airbnb, if we consider the market as the set of all expenditures made by the Durand family during their summer vacation this year. But Renault doesn’t make vacation rentals, does it? No, it doesn’t, but the company could sell them, if only to be sure that there’s an electric charging station in the rental residence; in this way, “electrified” real estate becomes a sales argument in Renault’s offer for Zoé, its little electric car.
How did we end up in this position?
Because our life was quickly aggregated inside a smartphone. Because “market places” (mega merchant websites that aggregate other, more specialized, merchant websites) are replacing shopping centers and making them obsolete, and because APIs (Application Programming Interface solutions that “connect” to an application to exchange data) have greatly increased the potential for using the shared RSS feed concept. We ended up where we are because we’re all a bit lazy, and it really is much more practical to reserve a hotel room and a car rental when we buy our plane ticket on the airline’s website (because the site already knows where we’re going and the day and time of our arrival).
The race to aggregate: how can we take advantage of it or protect ourselves from it?
It’s interesting to note that not all brands are equal when it comes to the capacity to aggregate other brands and maintain a direct relationship with the customer or end user. Fortunately. Because maintaining the customer relationship does not depend on technical agility, product offer or distribution channel. Above all, it’s a matter of usefulness and pertinence. In this digital era, when all actors have understood that the goal is to maintain a relationship with the end user (customer centricity), certain brands benefit from being perceived by their audience as useful, which enables them to go further with their customers, enhance their relationship and tell them the nicest stories.
At SUPPER, we have just published our first usefulness barometer with Opinion Way, a market research company. (barometre.supper.paris/) The results of this study, in addition to pointing out the brands most spontaneously used – and it’s not surprising that smartphone brands monopolize the podium 😉 – highlight concrete, operational solutions to cultivate usefulness potential, which is a major determinant for success and growth on today’s markets.
The capacity to aggregate others (or to become more indispensable than others in the customer’s opinion) is earned and can be cultivated. There’s no need to be a giant to succeed on a market, in a category or with a target. This capacity rests on a desire to establish real empathy with users, observe them in the way an ethnologist does and respond to the irritations or tension points in their lives by creating service experiences that will be the basis of new relationships that are more essential, more useful and longer-lasting. You don’t need to be big to aggregate. It’s better to be useful and pertinent.