Inside Edge
by J.G. Sandom

As I was fly-fishing for bones the other day in Florida, working my shrimp imitation along a border of turtle grass, it occurred to me that one of the principle reasons we are living in such exciting times today is that we are teetering on the edge, in transition, on that thin line between sea and land, grass and sand--the nexus. The Internet has cut a wedge through our culture, a paradigm portal exerting innumerable forces on our culture--like a black hole or singularity in space--forcing many of our traditional business practices and market principles to shift and twist. Here are but a few examples of this shift: Disintermediation When the Net appears between brands and consumers, entire links of the value chain are rendered superfluous; they're cut away. Middlemen disappear. Retail becomes increasingly redundant. Manufacturing and the consumer are thrust together. Proximity promotes efficiency. Go-to-market strategies We in the so-called MarCom space already have seen a noticeable shift in attention and budgeting from mass to targeted advertising vehicles, from an inordinate focus on awareness to one fixed on ROI. Temporal displacement Like a black hole, the Net is wrinkling time in the fabric of the market. It takes far less time for a consumer to first touch a brand and transact--to move from suspect to prospect to customer--online vs. offline. The Net serves as a temporal prism. Through the looking glass The Net is like the doorway through Alice's looking glass--with corporations and their brands on one side, and consumers on the other. So many of the business practices and market principles we've historically accepted as dogmas are warping before our eyes; the world is turning inside out. And whereas this is most evident by observing those on the edge of the wave--the Dells and Amazons--it is even more telling to see how it's affecting such traditional behemoths as Procter & Gamble <http://www.pg.com.>

Known for its once "innovative" approach to both product and brand development, P&G is no more immune to the gravitational forces of the Net than the smallest dot-com. Indeed, one law of this new Net physics states that the larger the mass of the traditional enterprise, the greater the Net impact. And the greatest beneficiary of this Net-generated paradigm shift is the consumer, for another law dictates that the greater the shift a firm makes toward e-business, the greater the consumer's empowerment.

Today, P&G is leveraging the Net in a number of ways. First, it is increasingly turning to the Net to obtain attitudinal insights about key customer sets. Using customer insight engines such as online focus group ASP Recipio<http://www.recipio.com>, P&G is building customer communities in cyberspace and engaging key stakeholders in a dialogue designed to uncover both qualitative and quantitative attitudinal insights.

This research is being used in everything from product design and refinement to competitive assessment and actual product development. However, the ultimate example of this trend must be Reflect.com <http://www.reflect.com>.

The unique reflection of you
Reflect.com engages young women in a dialogue about their personal beauty care. The value proposition is simple: you are unique and your beauty care products should be as unique as you are, based on your personal feelings – likes and dislikes – and on your physical attributes, such as oily or dry, or dark or light skin. All P&G offers are vats of "goop."

A young woman entering the Reflect.com site answers some psychographic and demographic questions to narrow the product set--the Hilbert Space--and the characteristics defined via the site drive the actual manufacturing process. The consumer even determines the shape of the bottle and the bottle wrap. (Ed. Note: In the world of physics, a Hilbert Space is defined as an inner product space which, as a metric space, is complete.)

What you get is truly a "reflection of you," something completely custom-designed and manufactured, paid for through e-commerce, shipped directly to your door.

This is a true quantum shift, for although it's one thing to just-in-time design and manufacture a computer through Dell, it's quite another when a company such as P&G mounts the wave. They've recognized that new product and service lines, even new bundles that would have been prohibitively expensive and impractical to create in the offline world, have suddenly become tenable online. The Net has made it possible.

What is equally intriguing about the Reflect.com model is that just as the product set is customer-driven--virtual until designed by the consumer--so is the brand.

The customer in the driver's seat
There are several seminal differences between online and offline brand expressions, but none more telling than this:

• In the offline universe, a brand is created by the advertiser and expressed through the media channel. The medium reveals the brand. The advertiser is in control.
• In the online universe, the advertiser empowers the consumer with tools (the graphical user interface, information architecture, content and functionality elements, and so on) that engender an experience through which the brand is built. The medium creates the brand. The consumer is in control.

Therefore, just as the Net increasingly is transferring power to the consumer in the product design and manufacturing process, it is bequeathing power to the consumer in brand development. The brand, in the Platonic sense of the word, may define the Hilbert "Cyberspace." But it does not exist until the consumer--using the tools that we provide--defines his or her experience within that cyberspace, an experience that literally creates the brand. And it creates it one cybernaut at a time, based on the unique path each user travels through the site.

If the site were slow, the brand would suffer. If the site withheld consumer control, the brand would suffer. If the site failed to deliver value, the brand would suffer. But if there were no consumer to navigate the site – if no one were in the woods to listen to the falling tree--there would be no brand.

This is the "paradox of virtuality," perhaps the strangest phenomenon engendered by the Net's gravitational pull: In this brave new world, things only truly become real through virtual reality.

Without the Net presence, there would be no Reflect.com product. The Web site is the product design and development center. The consumer is the director of product development. Without the site there would be no Reflect.com brand, for the consumer experience engendered through the site is what creates the brand. The consumer becomes the author of the brand. Without him or her, the brand is only so much noiselessness in the woods.