What is the impact of shopping by voice on brands?
If the introduction of voice channels and other home automation mechanisms like dishwashers that order their own tablet refills then what happens to brands? It's an opportunity to increase consumer loyalty and stickiness but also one for the retailer as they could temp the customer to switch to own brand.
In the end a customer just wants clean plates...
I like to use role models for empirical studies. In this case, I would use the vertical success of Apple as a role model for the impact of shopping by voice on brands. Following Apple's formula, brands should receive a high degree of consumer loyalty and stickiness if they offer a flawless and seamless experience. Retailers would have a hard time tempting the consumer to switch to their own brand. I think of the Best Buy and its Apple relationship for predicting an outcome for this part of the discussion.
Every form of automation puts a lot of power in the hands of the platform. It also creates opportunities for partnerships and affiliation marketing. For example: the company behind the smart dishwasher ceates an affiliation with a tablet brand. The tablets are included in the communication manual of the dishwasher and offered as a free sample with the machine in exchange for an annual fee. The smart re-ordering system is automatically linked to the tablet brand. The advantage for the tablet brand: less margin to be paid to third trade partners and access to a direct to consumer channel. The producer of the dish-washer will takeover the role of retailer and get both a margin income as well as a promotional fee from the tablet company. Lastly, both brands can benefit from image-transfer.
Paul - excellent question.
Its funny how these are (like Amazon Echo) are branded as speakers - whilst they are really Microphones ;-)
For me there are 3 "different"' elements to your question:
- Auto-replenishment. Getting the right amount of product at the right time is a great deal for the consumer. Lets simplify it down to toilet paper. Would love to sign up for that - and never ever have to worry about toilet paper again. Overtime, I don't even go down the paper lane in the supermarket anymore. But what if I signed up for Brand A, and Amazon after a year does not make enough margin on brand A, and will send me a product that is almost all good. What are the chances that I will start complaining to them about brand-B...... - with the risk of having to take on the complexity of buying my toilet paper my self again, to make sure I always get brand A.......
- Moving from the shelve on e-store. The shelve of most supermarkets are a reflection of market share. In the digital world that is not the case - a small brand (but with a good margin for the e-retail store) might appear larger and get more recommendations. The best selling detergent in the USA is Tide, but try to find that on Amazon - and it quickly becomes clear that e-store will "push" the products where they get the best margins, vs. previous market share or even consumer rating.....
- Moving from e-store to voice. Whilst in an e-store you can at least compare 10 brands before you make your purchase decision, that is completely impossible with voice. Once "dear Alexa" has given you 3 deals to choose from it stops - as you brain probably can't remember sizes & prices in your head anymore. A bit of home work will actually show you that Amazon actually uses higher prices on voice vs. e-store.....
Net - No things are not looking for brands in my book - would love to get some comments on this that proof me completely wrong.
Amazon Echo and Google Home are more and more popular as Digital Voice Assistant (DVA). I was reading a study released by Accenture stating that DVAs are now on the lead in the evolution of digital and physical experiences. Interesting to see how according to this survey, 2 out of 3 consumers who own and use stand-alone DVAs use their smartphone less
Even eBay CEO stated that consumers will get used to shopping with the voice in the next years.