Wednesday, September 15, 2010

The Age of the Aggregator

Hi, so I haven't blogged for many months now, thanks to Twitter, but I wanted to write a little longer one so here I am!

Have you noticed the Aggregator phenomena that's sweeping the world? An Aggregator is a service that complies the products/service of many brands and provides them to customers in a single place. The Aggregators come into place when there are multiple brands which are very similar to each other, and of virtually equal quality, thus the customer does not mind choosing between them. Instead the customer goes to single source where they are available. In New York the department stores are the aggregators with Bloomingdales, Barney's, etc ruling the fashion scene, with designers groveling to their every demand. In the Internet era it is the topical "portals" which are the Aggregators.

In the early 2000s we saw Google and Amazon both of which are Aggregators:

Google, aggregates and organises data from the web and help your find the most relevant one. Thus you do not have to remember countless website names and URLs, just the subject you are searching for and you get to browse countless websites. A highly illustrated version of Google as an Aggregator is Google News, it aggregates news from thousands of news papers and blogs and organises them topically for you. Now you don't need to remember the news source, you just goto goto Google News and all the news you need is there. Infact it's better going to Google News than a single newssource such as CNN or BBC as there you may not get the very latest and diverse coverage available.

Amazon, aggregates 1000s (millions?) of products brands in a single portal and organises them by topic for the customer's convenience. Why goto the websites of individual brands when here you can get choice, choice, choice.

Then we also saw aggregators for travel, Exedia, Travelocity, etc. Go there and get not only a multiple choice for your flights and hotels, but also pick the best deals!

Off late we have Gilt Groupe and Groupon, both of which are aggregators of newer categories

Gilt, organises high end fashion and lifestyle brands and presents them in the form of 3 days sales to consumers. They are the Barneys and Bloomies of the Internet; why goto individual stores or designers when I can buy them in a single place?

Groupon, organises deals from around the city and presents a deal of the day to its users.

Closer home in India, we have seen the successful IPO of MakeMyTrip a travel aggregator. And we are now seeing the rapid growth of Gropupon and Gilt clones.

Aggregators have moved to the top of the value chain because they are the ones which have the relationship with the customer. The customer is no longer loyal to a brand, such as Malaysian Airlines, but the aggregator (the travelsite in the case) where he shops multiple brands and products. God has decreed that whomsoever shall have the relationship with the customer shall have the largest share of the value chain!

A new but lessor known aggregator is the Venture Capitalist. While not having a relationship with the customer he is on the opposite side, aggregating multiple investors. Instead of starting businesses he cherry picks investments, aggregating a portfolio of companies, present in virtually every sector.

No longer is the inventor, the manager, the entrepreneur and the conglomerate the aristocracy of the working world. The aggregators at both ends, one on the customer side who aggregates both customers and brands and is the vital link between them; and on the other side the one who aggregates the money and is the vital link between the money and the businesses, the new emperors, with the rest relegated to the working class.

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