VRM - London Hubbub

Ian Delaney has a good writeup of the London VRM Hub meeting over here - I haven't had time to blog it yet, but as he says, its the 50% of unnaccountable Ad/Marketing money that is a good initial target - also the wasted effort in the production / inventory management process if demand can be ascertained before production.

Although I am a VRM fan, I am always very curious as to why it hasn't got farther, faster, sooner - after all we were talking C2B at least 10 years ago.....and in my view understanding the barriers to adoption early is very important in ensuring new ideas don't fall into the Chasm!

To be fair, the power of broadband, the lower technology costs today, and the sheer penetration of the web have chanegd the economics of the internet since 1997, but there are still practical barriers to adoption.

The barriers as I see them are 3 - fold:

(i) Transaction costs vs item value have an impact - I've written a quick note on that over here

(ii) Why so little to date - as I noted last night the basics are already done in some industries, yet takeup is slow - one can hypothesize slowness of retailers, but I don't think thats all there is to it, as the concept is already used in some sectors. I suspect there are obscure transaction cost blockers that prevent industries using this without prior investment.

(iii) The "Keep it Simple" vs "There be Bad guys" issues - where there is money, there is fraud, which begets security, which adds weight etc etc

One thought I took away from the meeting is that VRM will happen initially for big ticket items (ie Transaction value make it worthwhile absorbing the extra social transaction costs) or very small (eg the £50 insurance on a credit card makes it possible to have simple, probably less secure transactions) - I can feel a 2x2 matrix coming on

The other thought I am have is the "Be careful what you wish for" aspect, this was made clear in the airline seat example - if everyone is capable of specifying exactly what they want, there will be a tradeable market - so the price of that much desired aisle seat with legroom will rocket, and the mid-row seat in the middle of the plane will plummet.

That said I think the blogging metaphor is very apt.