1 The Future of Commerce

2 Age of the Choiceboard by A.J. Slywotzky o Customers become product makers o The coming dominance of Choiceboards l information collection devices and customer relationship builders l Dell, Mattel, Schwab, Chipshot.com

3 Who will Control the Choiceboards A.J. Slywotzky forsees three types of competitors vying for the early control o individual manufacturer or assembler (Dell or Schwab) o consortium of existing manufacturers (MetalSite launched by metals producers) o New intermediary (Point.com)

4 War of the Choiceboards According to A.J. Slywotzky, the victors will be those with o the best-designed choiceboards o the most responsive supplier networks o the closest customer relationships

5 Patterns of Disruption in Retailing by C.M. Christensen & R.S. Tedlow o Essential mission of retailing l Product, price, place, and time o Disruptive technologies l department stores; mail-order catalog; discount stores, internet retailing o Profits determinants l margin and inventory turnover

6 Earlier Retailing Disruptions o Department stores served as the portals of their day o Catalogs were an early equivalent of today’s virtual department stores o Malls were a sustaining innovation; discount stores were a disruptive innovation (different business model)

7 Upending the Discount Stores o Department stores became retailers of soft goods (i.e. products whose key attributes are more complex and harder to communicate) to maintain the higher margins. o Most of the surviving discount stores have followed the similar path.

8 Repeating Patterns? How should we expect the revolution to evolve? o generalist to specialist o upmarket momentum l from simple merchandise to complex products

9 Hypermdeiation by N. G. Carr o Transactions over the Web involve all sorts of intermediaries. o A future of “hypermediation” l Volume and efficiency o Two Profitable intermediaries l owners of content sites l infrastructure company

10 What is Choiceboard Choiceboards are interactive, on-line systems that allow individual customers to design their own products by choosing from a menu of attributes, components, prices, and delivery options.