Customer decisions in the age of Alexa and branded closed loops
Updated: Apr 30, 2020
Marketing—no matter whether you follow the outdated “4 Ps” approach or a more integrated customer-centric one—is typically concerned with customer acquisition, satisfaction, retention and keeping a brand relevant enough to survive successive purchase cycles. But marketing in the age of Alexa, as a recent HBR article by the same title stated, is far from typical. When Alexa can harness the insights of AI to truly build a platform that provides a single channel for marketing, sales, service, payment and fulfillment of future purchases, the whole “shopping” experience from the perspective of sourcing and purchasing goods is made irrelevant. If you think of it only as functional, that is.
Imagine Alexa, through data mined by her super smart cousin Amazon, knows when your family is running low on dish detergent, laundry soap, toilet paper, and now with their acquisition of Whole Foods, milk, eggs, cat food, and butter. Before you’ve used that last drop, your “cart” is filled with these items, your payment processed with the card on file and everything assembled and shipped to your door. What meaning does a brand have in this purchase cycle? Or shelf space? What if I don’t want a refill of Cascade dish detergent, but instead would rather try the Finish Powerball tabs instead? How will I even get the chance to consider that? Will Alexa eventually grow to be a product recommendation engine? In this closed ecosystem, it’s easy to see how Alexa and other platforms like her will take over from much-loved brands as the object of consumer trust.
This product fulfillment engine, based on serving a functional need, should strike terror into the heart of marketers whose work involves helping brands acquire new customers. But it’s not the end of brand marketing by any means. If you play the platform game, your job just got harder. In addition to tracking the competition and fighting for shelf space, now you need to break into the virtual shelf space of Alexa and her counterparts, dissect algorithms and understand the product recommendation engine (which Amazon has been quietly perfecting for years) to give your product even a long shot at being in your next customer’s consideration set.
But if you step away from the functional needs of a shopping experience and the customer journey, Alexa just made great marketing, based on brand storytelling and showing up how and where it matters most, the real winner. Just as robots will replace some manufacturing and data analysis jobs, give Alexa her due and let her have the functional shopping experience. The real opportunity, for great meaningful marketing, means creating ways for customers to engage in more intimate, immersive and personalized levels.
Take Nike, after posting 15% growth last quarter, and a 29% increase in mobile and online shopping. They are “all in” and betting on technology as a way to express who you are. Though they rose to be the world’s biggest athletic brand in the day when we still shopped for shoes at stores in malls, today Nike is using technology to be personal at scale.
I’m the proud owner of one of the first generation of customer-created sneakers from what originally launched as NIKE ID more than a decade ago. It was a Christmas gift from my team at the time. But as their growth shows, Nike has perfected this and become a top direct-to-customer brand in the process, with their SNKRS app that takes the Nike customer experience up a level. Here, brand loyalists explore, create, buy and share their sneakers, plus enjoy insider access to launches, and stories behind iconic sneakers.
There’s no way Alexa is going to break into that closed loop, branded ecosystem. And imagine if Nike added to that a Nike currency that sneaker owners could earn (maybe even Bitcoin) for every step taken and each fitness activity sweated through? Turn that currency in for your next pair of Nike sneakers. This is a lot more work than just creating push marketing messages, buying media or trying to earn social mentions for a brand. But it’s where the future of marketing is.
Need another example? How about Nintendo’s Labo. Just launched in April, a series of DIY kits works with the Nintendo Switch to allow gamers to create toys or robots and bring them to life with the game console. Just two months post-launch, Nintendo has already turned this into a contest where users share their creations, many far more innovative than what came in the box of cardboard. Think a solar-powered accordion or an RC car turned into a beetle bot. The result? A true community of users, united by great content—some of the detailed descriptions of the creations are amazing—and pride in being featured among a community of other users. I got lost for hours reading projects obviously created by families working together and could only imagine how much more rewarding that must have been rather than each of them staring at their separate screens—together but apart. Imagine the next logical step for Nintendo, creating a currency based on the quality of customer contributions that can be traded in for the next release console. Take that, Sony PlayStation.
This is where marketing is headed. Functional shopping needs fulfilled faster and more conveniently where brands matter less than the platform that delivers them. And truly immersive and personalized experiences, wrapped in great content and worth talking about.