The evolving strategies of power e-commerce players like Amazon and Alibaba could see voice technology become “the true force of disruption” for brands, according to Deloitte.
These powerful platform players will use voice to lock consumers into their ecosystem and may also use voice ordering assistants to push their ever growing number of private labels at the expense of branded goods, predicts Deloitte Australia’s national consumer products sector lead, Vanessa Matthijssen.
Matthijssen, who spoke a recent food industry conference in Melbourne, said in such a climate, brands would face the ultimate test - the strength of their relationship with consumers and the true value they bring.
Refering to Deloitte’s new paper, Meaningful brands – Connecting with the consumer in the new world of commerce, Matthijssen said the issue also highlights the profound influence the digital sphere has on today’s consumer.
“Consumer product companies need to realise that their understanding of, and connection with, the consumer will become their true source of competitive advantage,” Matthijssen said.
“Brands must shift their mindset from owning the aisle to owning the consumer in order to survive and thrive.”
Matthijssen also said that while physical visits to grocery retailers may remain the dominant way for consumers to shop in the short to medium term, e-commerce is predicted to see a combined annual growth rate of 20 percent to become a $US4 trillion market by 2020 globally, and to represent a quarter of all retail sales in Asia Pacific by 2021.
This growth is fuelled by digital platform players such as Alibaba and Amazon entering key markets, including Australia, according to Matthijssen.
“The introduction of voice technologies by these platform players who own voice assistants is now amplifying their power and commoditising entire categories as they aggressively ramp up their private labels,” she said.
Over the past year, Amazon’s private label grew by 90 per cent and it has launched over 80 brands to date including the well-known Amazon Basics, and Voice assistants such as Amazon’s Alexa present search results based on price and best value for the consumer and the platform player.
That would mean private labels and lower cost, smaller brands would likely feature high on the list and will be the ultimate beneficiaries of this voice revolution, according to Matthijssen.
“Brands are at the mercy of an algorithm controlled by the platform. In this new world, consumers may not even be given a choice to buy a brand unless the consumer explicitly asks for it. So all the marketing fundamentals that brands have traditionally used to stand out on a shelf are losing relevance in a world of voice,” Matthijssen said.
She also said to win in this new world, brands will need to shift from owning the aisle to owning the consumer.
To do this, brands will have to start adding meaningful value to the daily lives of their consumers. Brands should consider offering value beyond the product in moments where it matters and connect on shared values, such as offering services when consumers need to find inspiration or during consumption.
“Brands should know their consumers intimately by listening to what matters most to them, understanding their motivations, and responding honestly and consistently to build trust,” Matthijssen said.
“There are significant benefits for brands get this connection right as consumers will demonstrate higher rates of consideration, purchase and the willingness to pay a premium. And in a world of voice, brands that successfully connect will see their consumers override the algorithm by asking for their brand by name.”
