At the other end of this equation is the simple reality that margins for online Bancassurance products are being squeezed by consumers saving time and money by comparative shopping of price and features on the web. So that at the same time that their opportunity costs are rising (i.e. Search Advertising costs) the bancassurance industry is now finding that it’s margins are being squeezed. This is a process I call Glissification.
Glissification and Gamification are the Yin Yang of the Google economy. Gamification being the activity of manipulating the impact of Glissification of the market in your favour through the use of bots and other activities to modify the “hive mind” that influences customer behaviour and the organic search page rankings that reduce your costs of customer acquisition.
This glissification of the digital products of the Bancassurance industry is fundamentally changing the dynamic and the behavior of the players in the online find me, find you and let’s exchange economy. Where as before the seller of insurance and finance held all “the cards” to dominate the negotiation of the terms of the exchange today the buyer is discovering new ways to leverage the social memory to assist them in shifting the terms of the negotiation.
The same thing is happening in the world of retail. They too are finding their margins are being squeezed by this glissification of products and services. After all why buy something at the local retailer if you can find what you want online at a fraction of the price? There is a bigger range on to choose from, availability isn’t a problem and a there is a significant price advantage. The only thing that is in the local retailer’s favour is urgency. Glissification is changing the face of retailing. Our online shopping behaviours are changing the behaviours of real world retailers. They are having to act and think differently in response to the commercial pressure of online shopping.
This process of glissification is a key element in understanding why it is so hard to measure the disruptive impact of the internet when we try to use old economic models like GDP. You see glissification doesn’t create wealth (except of course if you are the gatekeeper of the key words i.e. Google) in the old fashion way by allowing businesses to extract more from customers. It inverses the wealth creation equation by allowing customers to extract more from businesses through the online sharing knowledge of price and performance. So when measured in terms of GDP it looks like the economy is stalling or shrinking but in reality the consumer are getting more for less thanks to the price advantaged delivered though glissification.
We see this best expressed through the “flash” group buying phenomenon. Customers aggregate on an as needs basis to leverage group buying to negotiate the best price for the group. Historically this group buying power required a 3rd party wholesaler to aggregate the activity before on selling the product to the retailers. Online group buying removes the wholesaler and retailer from the equation. Whole sections of the industry value chain are removed through the process of automating the social buying process. This in turn removes a number of layers from the GDP calculation. The consumers receive significantly more for significantly less but the GDP shrinks in the process. As the internet matures this circumvention of large sections of economic activity through business process automation will only accelerate.
This is why I think we need to explore new economic models if we are to understand how the information revolution provided the tools and the changes in behaviour that lead to the GFC and more importantly how the information revolution can provide us with the tools and the changes in behaviour to will allow us to rapidly emerge from this economic crisis and create a sustainable and prosperous future for all our children.
Bronwen Katsaros
August 14, 2011
Game in gamification, but what is gliss?
mobcon
August 14, 2011
Glisse(Dance)/Glissade(mountaineering)/Glissant(Music) all have their root in the idea of sliding. So Glissification simply encapsulates the idea of how the old ways of doing business are slip sliding away and being replaced by new ways of doing business (i.e. the old tunes are being replaced by tunes that we haven’t heard before). Plus, just like fauxionary, it’s a delicious new word to play with.
Bronwen Katsaros
August 14, 2011
Lovely. Sliding…it’s not a common reference in this part of the globe.