retail news in context, analysis with attitude

The Wall Street Journal reports that big CPG brands see Amazon’s Alexa voice-activated smart speakers as a threat to their businesses - because these systems “often steer shoppers to a single product, usually selected by an algorithm with no input from the sellers. That isn’t a big problem now, as voice searches account for a sliver of purchases. But it could be.”

The story notes that “when shopping for items without specifying a brand, Alexa is more likely to recommend an Amazon's Choice product before it suggests top search results.” For CPG manufacturers, this is yet another headache: “Already grappling with upstart rivals, changing consumer tastes and the rise of e-commerce, personal-care and packaged-foods makers have yet to figure out how to leverage the technology.”
KC's View:
The argument here for a long time has been that everything Amazon does, including the Alexa-powered devices, is aimed ultimately at making it easier for people to simply replenish their larders by going to Amazon. This has enormous impact both for rival retailers and vendors, because it gives Amazon enormous influence over shopper decision-making … all of which has been granted it by a willing, compliant and even enthusiastic consumer responding to the systems’ efficiency and effectiveness.

Yup. I’d say that brands and rival retailers should be worried. But they have to get beyond worry and start finding alternatives. Like creating their own Alexa-friendly apps. Like developing their own versions of Subscribe-and-Save.

Denial isn’t an option.