the price or see the packaging and are less likely to include the brand
in their request. Fewer and fewer searches contain a brand name.^88
Consumers are willing to price-compare several brands, and Amazon
gives them just that opportunity. The death of brand, at the hand of
Amazon, and in particular Alexa, can be foreshadowed in search
queries.
At L2 we have run tests (by which I mean barking commands at
Alexa) to glean insight into Amazon’s strategy. Some findings: 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.
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. Though
Amazon carries several brands of batteries, its private label, Amazon
Basics, accounts for a third of all battery sales online.
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. Amazon, armed with
infinite capital provided by eager investors, is leading a war on brands
to starch the margin from brands and deliver it back to the consumer.
Death, for brands, has a name... Alexa.
Amazon the Destroyer
I spoke the following morning, after Jeff Bezos, at a recent conference.
Similar to the kid who sees dead people in The Sixth Sense, Jeff Bezos
sees the future of business better than most CEOs. When asked about
job destruction and what it would mean for our society, he suggested
one more time that we should consider adopting a universal minimum
income. Or, he added, a negative income tax where every citizen is
granted a cash payment that will be sufficient to stay above the poverty
line. People fawned, “What a great man, so concerned about the little
guy.”
But wait. Ever notice that there are very few pictures of the inside
of an Amazon warehouse?