Innovations, promotions and campaigns are turning consumer choice into a real chore. Consumers now want value for time' so the hour has arrived for agency services says Alan Mitchell Industry watchers have been doing a lot of crystal ball gazing into the store of the future and it's not a happy picture. According to Maureen Johnson from The Store, the "planned shop", which currently accounts for about 40% of all shopping spend and is the core of the grocery supermarkets' business, is due to decline to about 27% over the next 15 years. And that's just the start. Of that 27%, about half will be ordered remotely, not only from the home but via every perceivable permutation and combination of ordering, pick up, delivery and so on. After looking at the figures ­ from a Coca-Cola Retail Research group study ­ CEOs including Tesco's Terry Leahy and Ahold's Cees van der Hoeven have made much of one detail: how could the researchers be sure that planned instore shopping would fall to 13%, as opposed to 12% or 14%? What they haven't questioned, however, is the main thesis. In mature markets like the UK, retailing is set to change so much that perhaps words like "retailer" or "supermarket or "store" are becoming misleading. Here's a prediction. New phrases like "consumer agent" and "concierge service" will enter the conversation to help describe this fast changing reality. As Johnson puts it, in the face of increased competition and consolidation, the challenge for retailers is to "differentiate or die": to build stronger brands and deeper, more enduring links with their customers. And agencies are emerging as one way to do this. What is a consumer agent? Put in simple terms, agents help buyers ­ that is, consumers ­ to buy. Traditional marketers ­ including retail marketers ­ go to market on behalf of the seller. Their job is to help the seller sell. Agents take the side of the consumer. My doctor helps me find and get the best medical treatment. My agent would help me find and get the best possible products and services that are most appropriate for me, at the lowest possible overall price. Demand for agency services is rising as growing consumer disenchantment with old style "seller-centric" marketing combines with new technologies to trigger a long-gestating "flip" at the heart of retailing. The simple example of choice illustrates this consumer disenchantment. Choice is a wonderful thing. It drives competition. It helps consumers get value. But making choices also takes time and effort. For the consumer choice is a cost ­ and one rising unacceptably fast. Rapid technological advances mean it takes increasingly more effort to really understand what's on offer: "Does this meal contain genetically modified soya?" for example. Product proliferation is rampant. And the more crowded each category gets, the harder brand managers try to differentiate their offers. Result: choice is becoming a chore for the consumer. Or take advertising. Ideally, manufacturers' and retailers' marketing communications should explain the benefits of each offer so well that consumers know exactly what their best personal choices are. But the reality is that these communications are trapped in a vicious circle. Marketers are bombarding consumers with ever more selling messages, which is prompting consumers to turn off. This, in turn, is forcing marketers to strive even harder to cut through the clutter ­ which adds even more clutter. As buyers, what consumers want and need is not only the right products but the right information: relevant, impartial, easy to use and access, comprehensive, comparative information that helps them, as a buyer, to buy. Marketers simply aren't providing it. Meanwhile, for at least some consumer segments, value for time has become as important as price. For both manufacturers and retailers this opens up a whole new dimension of value that simply cannot be addressed by existing systems. Reducing the amount of time the consumer has to spend shopping, or in assembling items into the solution he's looking for, is a different kettle of fish to introducing a New! Improved! product. More of the same isn't good enough. In fact, if your new product introductions, promotions and ad campaigns simply make choice harder, add clutter and eat up time, in some ways they devalue. They compound the consumer's go-to-market problem. Enter the agent, who helps the consumer address these issues. Potential agency mechanisms come in many forms. One of the more sophisticated internet based approaches, developed by software company 20/20Me, is an online virtual intelligent agent'. Consumers teach it about themselves (their age, where they live, tastes, preferences etc). When they want to buy something, they tell it what they are looking for, and it searches out relevant suppliers, soliciting offers from them. It gives these suppliers enough relevant information about its client for them to understand what to offer, but not their identity. It then collates the replies to help the consumer compare, contrast and choose. The idea, says Colin Frost 20/20 Me's strategy director and a former e-business guru at BP, is to go beyond B2B and B2C business models to create "a Me2B marketplace". First to test the software, starting this month, is one of Britain's biggest high street retailers ­ "the most trusted consumer brand in Britain". Initially, it will use the service to help customers access products within its own range and supplier base. Later, it intends to broaden the offer to the market generally. The opportunity for retailers like this is to integrate the right mix of agency mechanisms into a full blown, easy-to-use agency service (under their own brand) that adds a whole new dimension of value for their customers. And their potential advantages are huge. Take trust. Trust is the holy grail of every brand. But a brand I can trust to "be on my side" and "act on my behalf" creates a far deeper emotional bond than one that I simply trust to "do what it says on the tin". By becoming the consumer's champion, agents make traditional brands' trust building attempts seem lame indeed. It's also a way to build new revenue streams. Consumers are already used to retailer brand extensions. Once consumers understand the agency concept, the retailer can use it to attack virtually any market. How could retailers respond to the lifting of the block exemption in car selling, for example? By investing one small fortune in prime site retail space, and another small fortune in an inventory of perhaps unsold cars? Or by soliciting orders from consumers and aggregating these orders via a buying club, or via reverse auctions? Whether it's white goods, telecoms, energy, computing, financial services, cars, travel, sporting equipment, the agency potential is massive. The agency approach is also a way of getting closer to consumers and building longer-term relationships with them. Loyalty cards generate information about transactions, but there's oceans more valuable data that could be collected from consumers' requests for information, specifications for sought-after products or services, and so on. Such data can be used to help shape the agent's own business, and can also be sold on in aggregated form to suppliers (with customers' permission, of course). Finally, agency services create the opportunity to forge new win-win relationships with a wider range of suppliers for whom an agent can be a much cheaper route to market than traditional marketing and distribution channels. Retailers with their existing strengths in buying power, logistics, customer service, data management and customer relationships are well placed to seize this agency potential. In fact, in many ways, long developing trends within retailing itself can be seen as preparing retailers for precisely this moment. One such trend is the ongoing shift in strategic focus from property to customer relationships. Since the year dot, retailing has been a property-driven business. Success depended on location, location, location: putting your store in the right place and making sure you put the right range, perfectly displayed, pitched at exactly the right price into this store. But over the years, retailers have also witnessed the power of strong customer relationships. Endless brand extensions were the early proof of this particular pudding: starting with early own label me-toos and moving on to petrol, financial services and so on. The growth of online shopping takes us further down the same road. In the case of the 100% online shopper, the store is irrelevant. The relationship is everything. Next step? To realise that in a relationship, adding value through products is just the beginning. There is infinitely more scope in adding value not just through products but also through service and information: generally acting for the consumer in the marketplace. A second shift is the operational move from push to pull. With the advent of scanning (and all its associated information technologies), retailers have realised that the flow of information "up" the demand chain from the consumer is as, if not more important than, the flow of goods "down" the supply chain. Information about what consumers are buying ­ now ­ can be used to decide what to order, how much, when: to drive down inventories, minimise the incidence of unsold stock (that therefore has to be discounted) and generally minimise risk and maximise cash flows. As this ability to sense and respond to actual consumer demand speeds up, sometimes retailers can even sell an item to a consumer (thereby realising its cash value) before they have to pay the supplier. That's what agents do, too: take the order, then source the item. There's more to come. In a few years' time, new technologies such as radio frequency identification tagging could slash the information costs of handling items so much that it even becomes economically feasible to source single products for specific consumers. Enter a third, mindset shift which is the product of the first two. In its early days, retailing was all about selling on what manufacturers had persuaded the retailer's buyer to purchase. Successful retailers were consummate salesmen. But now leading edge retailers increasingly think in terms of sourcing from suppliers what consumers happen to be pulling off their shelves. Instead of doing stimulus-response' marketing ­ working out which stimuli in the form of advertising, promotions and so on will get the best response in terms of sales uplifts ­ they are beginning to see themselves as sense-and-respond' marketers. Gather in every possible signal to sense what the consumer wants, and then do the sourcing for them. But if the concept of agency is such a big opportunity, why aren't retailers jumping up and down with excitement about it? One answer is that they are experimenting on the edges. Look at Asda's ShopSmart price comparison service. Or Sainsbury's new mobile phone offer, which uses a sort of reverse spot market for airtime. With their interactive TV joint ventures, Boots/Granada and Sainsbury/Carlton are testing out the option of mixing expert advice with sales. And Tesco.com's electrical goods offer is edging towards an agency stance. Another answer is that building a viable agent business is fraught with difficulty. It's not only a matter of putting out a few consumer champion' press releases. It's actually about inventing a new business model with different cost structures and revenue streams such as commissions, fees, subscriptions and payments for work done. Inventing a new business model is always a hairy, scary, risky business. But doing it within the framework is doubly difficult. For retailers, it's not a matter of jumping from 100% push to 100% pull but of finding a new mix of the two. Old-style "seller-centric" marketing with its product innovations, promotions, ads and so on, still has a vital role to play in exciting, engaging and motivating consumers. What's needed is a new mix of sellers selling and agents helping buyers to buy. But nobody knows what the right mix is. And it's certain to differ from category to category ­ and consumer to consumer. Consumers are now looking for new dimensions of value in terms of service, useful information and value for time, and they're getting fed up with a seller-centric marketing system driven by sellers bent on selling. Retailers are in a perfect position to give birth to a new type of business. {{FEAT. COVER }}