Redefining Infomediary, and its Impact on Consumer Behavior and Business Management

ABSTRACT

The word “infomediary”, a hybrid of information and intermediary, was coined by American consultants in the late 1990s. It originally referred mainly to purchasing agents for consumers. Though use of the word faded after the collapse of the internet bubble, comparison sites of mainly electronics products such as “kakaku.com” steadily spread in Japan. We redefine infomediary as “a company or website where intermediation and distribution of information between multiple players is established, and the function (information platform function) as a foundation for collecting distributed information is indispensable in company or web site operation.” We analyze the impact of the increasingly important infomediaries on consumer behavior and business management.

Regarding the effect on consumer behavior, infomediaries (comparison sites) are recognized as being more useful than other information sources in consumers’ purchasing process, and we find higher satisfaction among infomediary users than non-users. The higher the satisfaction level, the more likely consumers are to proactively disseminate evaluations or reviews of products and services and buy related products after the first purchase. Meanwhile, the internet plays a large role even at the stage of product awareness, and few consumers simply select and purchase the products they see on TV or other mass advertising. Even after learning of a company’s product through a television advertisement, consumers are likely to purchase a different company’s product after gathering information. This suggests that information gathering using infomediaries is breaking the traditional advertising model centered on mass advertising.

Manufacturers and distributors have traditionally been the main players to plan and develop new products. However, by analyzing vast amounts of data accumulated in the information platforms, the planning of high value-added products – essential to any company – is being facilitated with infomediaries as a starting point. This represents a threat to manufacturers and distributors, who have been the main actors and starting points in product planning.

Infomediaries, however, are saddled with their own problems, and cooperation between traditional companies and infomediaries is important. There are three patterns for such cooperation: collaboration and alliances (type A); consolidation and binding (type B); and complementary relationships (type C). With appropriate response using a combination of these patterns, information platforms can become a foundation for significantly evolving business management at existing companies including traditional manufacturers and distributors.