In the world of Alexa, will consumers love your brand enough to ask for it?

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In the world of Alexa, will consumers love your brand enough to ask for it?

23 May 2018: Voice technology is predicted to be the true force of disruption in this new age of commerce. What consumers buy and how they buy is being redefined by e-commerce and voice ordering assistants. Powerful platform players such as Amazon and Alibaba will use voice to lock consumers into their ecosystem and may use voice ordering assistants to push their ever growing number of private labels at the expense of branded goods. So brands will face the ultimate test - the strength of their relationship with consumers and the true value they bring.

Presenting at the Food & Grocery Australia 2018 Conference in Melbourne today, Deloitte Australia’s National Consumer Products Sector Lead, Vanessa Matthijssen, discusses key points from Deloitte’s new paper, ‘Meaningful brands – Connecting with the consumer in the new world of commerce’, which seeks to prepare FMCG companies to face the challenges that the digital world will bring and explore their options to establish meaningful consumer relationships. It 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,” said Matthijssen. “Brands must shift their mindset from owning the aisle to owning the consumer in order to survive and thrive.”

New and emerging paths to purchase

While physical visits to grocery retailers may remain the dominant way for consumers to shop in the short to medium term, new paths to purchase are emerging and new players are on the rise.

E-commerce is predicted to see a combined annual growth rate of 20 percent to become a US$4trn market by 2020 globally, and in Asia Pacific, e-commerce is on course to represent a quarter of all retail sales by 2021. This growth is fuelled by digital platform players such as Alibaba and Amazon entering key markets, including Australia.

“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,” explained Matthijssen.

Over the past year, Amazon’s private label grew by 90% and they have launched over 80 brands to date including the well-known Amazon Basics.

Voice assistants such as Amazon’s Alexa present search results based on price and best value for the consumer and the platform player. So private labels and lower cost, smaller brands will likely feature high on the list and will be the ultimate beneficiaries of this voice revolution.

“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,” said Matthijssen.

The shift back to the consumer

Many brands are geared towards influencing and servicing the retailer, however to win in this new world, they will need to shift from owning the aisle to owning the consumer. This means 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 (e.g. offer services when consumers need to find inspiration or during consumption).

A Deloitte study found more than half of consumers (51%) say they weigh evolving value drivers such as social impact, wellness and safety more heavily than traditional ones such as price and convenience, and 63% are willing to pay more for social values. This presents a significant opportunity for brands to leverage these values in their brand proposition and to find a common purpose to connect with the consumer.

“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,” said Matthijssen.

“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.”

The endless opportunities of digital data

Technologies such as augmented reality, wearables, voice and the Internet of Things can facilitate the collection and exchange of data with consumers at any location, on any topic and at any time of day.
“Now is the time for brands to become truly strategic about the type of meaningful engagements they want to create,” said Matthijssen. “Brands will need to consider what value they are offering and select the moment to interact when it truly matters to the consumer.”

However, while opportunities abound, to genuinely add value in the moments that matter will require brands to invest in new digital and data capabilities and make considerate choices about when and how to engage with consumers.”

Digital technology is providing significant opportunity to connect and it already has a profound impact on today’s shopping journey. A Deloitte Centre for Industry Insights study found the influence of digital on in-store grocery sales grew from US 33 cents to 51 cents in each dollar within 2017. And digital is influencing every stage of the consumers’ shopping path.

It starts with finding inspiration and browsing, with more than three out of four shoppers influenced by YouTube channels, blogs, websites or social media. Shoppers can then use digital shelf displays or QR codes to obtain information on things like nutrition and provenance when selecting and validating products, or may receive mobile push notifications and personalised promotions to stimulate conversion. Purchase and pay in-store has also been simplified with mobile check-outs and ‘just walk out’ technology introduced by Amazon Go and WeChat. We even see interactions occurring at point of consumption to provide advice on how to best use the product to enhance the experience.

Delivering on trust and the value exchange of data

Access to and usage of consumer data is increasingly impacted by regulatory changes and shifts in consumer perceptions, which is providing both challenges and opportunities for brands. With consumers more aware, better informed and distrustful of the potential for misuse of their personal data, brands must act quickly and reconsider existing data capture and usage practices.

“If brands can demonstrate strong ethical principles around managing consumer data, they will have greater licence to build more intimate and trusted connections with consumers,” said Matthijssen.

“So in this new world of consumer empowerment, a direct value exchange between the brand and consumer becomes a game changer. As a general rule, the more you give, the more meaningful you become, and the more willing consumers will be to share their data.”

Media contact:

Tanya Jayasuriya
Corporate Affairs & Communications
M: +61 422 155 002
T: +61 3 9671 7941

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