DEFINITIONS: What is Reintermediation?
Welcome back to our “DEFINITIONS” series, where we break down complex concepts and provide you with concise explanations. Today, we are going to dive into the world of reintermediation and understand its significance in the business landscape.
What is Reintermediation?
Reintermediation refers to the reintroduction of intermediaries or middlemen into a marketplace, after they have been bypassed or eliminated due to technological advancements. It is the opposite of disintermediation, where intermediaries are removed from the distribution channel.
In simpler terms, reintermediation occurs when a previously cut out middleman gains a new role in a transactional process. This can happen when technological disruptions or changes in consumer behavior make the involvement of intermediaries valuable once again. Reintermediation can take various forms, including physical intermediaries, digital platforms, or even a combination of both.
Key Takeaways:
- Reintermediation is the reintroduction of intermediaries into a market after their removal due to technological advancements.
- It occurs when intermediaries identify new opportunities to add value in the transactional process.
Now, let’s explore a few examples to grasp a better understanding of reintermediation:
Examples of Reintermediation:
- Travel Agencies: With the rise of online travel booking platforms, many people assumed that travel agencies would become obsolete. However, we have witnessed a reintermediation phenomenon where travel agencies are making a comeback. They offer personalized travel planning, expert advice, and customized itineraries, which some travelers value over the convenience of online platforms.
- Online Marketplaces: E-commerce platforms such as Amazon and eBay have disrupted the traditional retail landscape. However, we are now witnessing the reintermediation of brick-and-mortar stores partnering with these platforms. They utilize online marketplaces to expand their reach and attract customers who prefer to shop online but still value the experience of physical stores.
Reintermediation is an ongoing process driven by changing market dynamics, consumer preferences, and evolving technologies. It highlights the importance of understanding how intermediaries can play a crucial role in value creation and delivering exceptional customer experiences.
In Conclusion
In conclusion, reintermediation occurs when intermediaries regain their place in the marketplace, offering new value in a changed business landscape. Today, we delved into the world of reintermediation, understanding its definition and exploring examples of its manifestation. Whether it’s travel agencies or online marketplaces, reintermediation shows us how intermediaries can adapt and thrive in an ever-evolving business environment.
