If you’re a fan of science fiction, or 90s TV, you can probably picture the scene we’re thinking about. Captain Picard walks to a corner of the bridge and stands next to a futuristic console. He says “Tea, Earl Grey, hot” and within a moment he’s holding a steaming mug.
Twenty five years ago, this was a shocking vision of the future, where a simple voice command would instantaneously deliver whatever was required. Soon, it will be the world that we live in.
But what you might not notice is what Patrick Stewart doesn’t say. There is no “Twining’s” or “Tetley’s” or “Lipton’s”.
In a world where we can get a peanut butter sandwich by uttering a sentence, will consumers pause for a moment to specify that they want Kraft peanut butter?
The Future is Now
Buying groceries simply by uttering a voice command has become our new reality. As the popularity of digital assistants equipped with AI continues to grow, it’s safe to assume that more and more consumers will begin shopping online. A report commissioned by RBC estimated that by 2020 Amazon will have 500 million active global customers, and that “there will be 60 million Alexa devices sold in 2020, bringing the total install base to around 128 million.” The convenience and novelty of these devices have captivated consumers, and more and more people are becoming familiar with them. A September 2016 survey by Amazon found that 33% of consumers were aware of these devices. By March of 2017, that figure had jumped to 77%. Meanwhile, ownership rates had more than quadrupled. As RBC concluded: “Our take is that Amazon has a potential mega-hit on its hands with Alexa – a product/service that has the potential to materially increase the frequency and intensity of Amazon’s relationship with its customers.”
The Medium is the Message
If one looks at Amazon’s recent activity, particularly the promotion of Alexa and the acquisition of Whole Foods, it’s possible to see a very ambitious plan for growth. Amazon is most likely attempting to attract consumers not only to its products, but also to a new way of shopping. If they can revolutionize the way we shop by delivering groceries ordered by voice command within 2 hours and without a fee (an experiment they’ve already started in five American cities), they can completely control the entire shopping process of millions of consumers, who will be grateful for the time saved and convenience they’re offered. As a recent Atlantic Monthly article noted: “[Amazon is trying to turn] Prime into the ultimate “life bundle,” a single membership program to bind consumers to every possible commercial need. As Amazon extends into more product areas, it can own both the search platform and the product, so that when a dad says to the smart speaker on his counter, “Alexa, I need brown rice and pork,” the product that arrives is an Amazon-branded box containing Amazon–Whole Foods–branded rice and pork.” If Amazon can use Alexa to control the way we shop, it can also use Alexa to steer us toward Amazon brands. If supermarkets and brands in the FMCG sector don’t act now, you can rest assured that Captain Picard will be drinking Amazon’s own Earl Grey as he relaxes on the bridge.
Will Amazon Own the Future?
The idea is almost unthinkable for supermarkets and brands that have spent decades and massive piles of money establishing market share, carefully cultivated images, and customer loyalty. But all of these brands and retailers are intertwined with the current shopping paradigm. Kodak was similarly established as the world’s best film. Blockbuster was the king of video rentals. But as technology changed the way we shared pictures, watched movies, or listened to music (remember HMV?) all of these titans watched their empires crumble. If Amazon is successful in changing the very nature of shopping, Tesco, Nestle and other companies who now seem ubiquitous and essential could soon be obsolete. Is Amazon a runaway train chugging into the future and leaving competitors in the dust, or can it be slowed down?
For those looking to compete with Amazon, we would argue that it is fundamental to engage with Amazon’s vision of the future. While we don’t know exactly what the future of shopping will be, we can assume that as technology evolves, logistics and AI will allow people to shop with greater ease and shorter delivery times. Trekking to a supermarket, scouring the lot for a parking space, scanning the shelves, and waiting in checkout lines will certainly seem less appealing than saying “I need toilet paper, chicken breasts and Earl Grey”, then watching a film on Netflix and having your groceries appear. As the Atlantic’s Derek Thompson concluded, “[Amazon] is a leveraged bet on absolute customer convenience. And nothing says “absolute customer convenience” like yelling the word kale! at a box in one’s living room and finding fresh greens on one’s doorstep within 120 minutes.”
What’s to be done?
It would be a massive mistake for retailers to ignore the possibility that the future of shopping lies inside of Google Home and Alexa. It would be a mistake for brands to become dependent on sales through Amazon, when Amazon can develop a similar product, sell it for a cheaper price, and remove competing products from its marketplace. In order to thrive in the future, offering consumers easier ways to buy your products is an absolute necessity. Whether by creating shoppable content, voice-based apps, local shipping networks or easily navigable websites, you will need to make it easier and easier for customers to buy your products to maintain your market share and keep Amazon from dominating all future commerce. We at Adimo believe that commerce is convenience, and we’re here to help!