The 5th Family Member and “Alexa, How Can We Kill Brands?”

May 12, 2017 — Leave a comment

If you haven’t bought an Echo or Google Home yet, I’m sorry but you’re an abject failure of a 2017 marketer. And I don’t mean “have you tried Alexa at the store or your friend’s house?”

I mean, “have you bought an Echo, lived with Alexa listening to you, forgot you had an Echo, left it unplugged for a week, plugged it back in and forgot about it, used it only to listen to music and then, oh and then, one day you use it for something extremely useful and IT CLICKS THAT THIS IS A COMPLETE GAME CHANGER?”

Start with an Echo Dot. It’s $50. And you won’t feel like you broke the bank when you need to upgrade later this year.

In Cory Doctorow’s new book, Walkaways, the people of the near-future have an A.I. powered home assistant that not only can order groceries or provide answers to basic questions, it also syncs with appliances, controls entertainment devices, and uses light to highlight chores that need to be completed. Which is basically possible today using the existing infrastructure of Alexa and Google Home. Of course, Doctorow throws in a working sim of your dead lover as the protagonist A.I., but that’s why it was a good novel. And not possible today. Yet.

So assuming you’ve already bought into the serendipity and early brand opportunities with these A.I.-powered assistants, it’s critical we spend some time thinking about next-gen brand opportunities. Specifically, the new Echo Show that debuted this week — featuring not only a screen, but a camera to go along with the microphone.

Chris Messina calls this The Fifth Family Member, pointing out it’s design fits a familiar invisible technology pattern. Not beautiful but not ugly. Something you buy and set-up and forget about. Until you find a few things that make it invaluable. “By reducing the importance of appearance, Amazon can emphasize function over form, keep its prices anticompetitively low, and drown the market with products that offer access to its AI voice assistant.”

Meanwhile, Scott Galloway at L2 is musing about these next-gen brand opportunities higher in the sales funnel and consumer purchase cycle than the conversion — the brand itself.

Voice…will expedite the decline of brand equity as a vehicle for sustaining healthy margins. There is an arrogance in academia and business that a focus on brand building will always be a winning strategy. No, it might not.

Of the 13 firms that have outperformed the S&P five years in a row (yes, there’s just 13), only one of them is a consumer brand — Under Armour. Note: it will be off next year’s list.

At L2 we’ve been running tests (barking commands at Alexa) to glean insight into the Seattle firm’s strategy. Some findings:

1. It’s clear that Amazon wants to drive commerce through Alexa, as they are offering a lower price, on many products, if ordered via voice vs. click.

2. In key categories like batteries, Alexa will suggest Amazon Basics, their private label, and play dumb about other choices (“Sorry, that’s all I found!”) when there are several other brands on amazon.com.

Retailers often leverage their power and custody of the consumer to swap out brands for their own private label. That’s nothing new. Only we’ve never seen any retailer this good at it.

Death, for brands, has a name … Alexa.

Source: “Alexa, How Can We Kill Brands?” | No Mercy No Malice | Scott Galloway | L2

 

 

Will voice-enabled devices and ordering kill brands? No.

But they will certainly impact how the public interacts with them. Especially commodity products and those that aren’t unique enough in marketplace ecosystem to stand out (ie. the battery example above).

All the more reason to jump in and start familiarizing and experimenting with this space now.

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