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No Mercy / No Malice: “Alexa, How Can We Kill Brands?”

12 May 2017

by

No Mercy No Malice

“Alexa, How Can We Kill Brands?”

As VR, 3D printing, and wearables become the pet rocks of the internet age — cute, but no value — we turn to the technology that will shake the ground below those of us who make our living building and selling brands … voice. My kids got me into Alexa, and it has substantially eroded my standing with my boys.

Like. I. Fucking. Needed. That.

Dad was once a trusted source of information on (almost) everything, in my boys’ eyes. They turned to me for answers to questions big and small (What’s the capital of Iceland? What happens when I die?). No more … as there’s someone else, much smarter, living with us. That bitch, Alexa.

Brands are shorthand for a set of associations that consumers use for guidance toward the right product. CPG brands have spent billions and decades building brand via messaging, packaging, placement (eye level), price, creative, endcaps, etc. The internet loses much of this, since the impact of zeroes and ones is no match for atoms, and much of the design and feel of the product loses dimension, specifically from three to two (dimensions). As a result, the internet has become a channel to harvest, rather than build, brands.

However, all these weapons of brand … all of them go away with voice. No packaging, no logos, no price even. The foreshadowing of the death of brand, at the hand of voice, can be seen in search queries. Fewer and fewer contain a brand prefix or modifier.

Voice, methinks, will expedite the decline of brand equity as a vehicle for sustaining healthy margins. There is an arrogance in academia and business that a focus on brand building will always be a winning strategy. No, it might not. Of the 13 firms that have outperformed the S&P five years in a row (yes, there’s just 13), only one of them is a consumer brand — Under Armour. Note: it will be off next year’s list. Creative execs at ad agencies and brand managers at consumer firms may soon “decide to spend more time with their families.” The sun has passed midday on the brand era.

At L2 we’ve been running tests (barking commands at Alexa) to glean insight into the Seattle firm’s strategy. Some findings:

1. 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.

2. 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.

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. Google is Genghis to Alexa’s Khan in the war on brand, conspiring with 400M consumers, armed with infinite capital provided by fanatical investors, to starch the margin from brands and deliver it back to the consumer.

Death, for brands, has a name … Alexa.

Call Your Mom

Mother’s Day, a (very) brief history:

Ann Jarvis was a peace activist who cared for wounded soldiers on both sides of the American Civil War. Her daughter, Anna Jarvis, wanted to honor her mother by continuing the work she started and to set aside a day to honor all mothers because she believed that they were “the person who has done more for you than anyone in the world”.[1]

Sylvia

My mom, Sylvia Galloway, slept in the London tube as a little girl, as her house had been damaged by the Luftwaffe. At 13 she was pulled out of school to work for a tailor to help support her family. At 15 she lost her parents, and her two younger sisters were placed in an orphanage. At 19 she spent 15£ for a nine-day passage, on a steamship, to the New World. She was a secretary, which in sixties and seventies America could support an upper-lower-middle-class life. She raised me on her own. Note: not a sob story, we had a nice life.

— When I was eight, I’d get nosebleeds in the middle of the night. We’re talking blood-spraying-from-your-face type of bloody noses. This is one of the reasons I never tried cocaine, but that’s another post. My mom would hold a cold compress to my nose, and read math problems to calm me, until the blood coagulated, sometimes hours later.

— When I was 15 my mom, home from work, would honk her horn as she entered the garage below our apartment complex, signaling for me to come down and practice, on inclines in the massive garage, how to drive a stick shift.

— On my 16th birthday she drove up in a four-year-old BMW 320i and gave me the keys to her eight-year-old lime green Opel Manta. She put the keys in my hands, rested her hands (up) on my shoulders and said, “You’re a handsome young man [I wasn’t] who owns his own car.” I’ve bought, and been given, a lot of nice things. This stands alone as the most joyous moment I’ve registered from an inanimate object.

— When I was 22 I agreed to meet my mom in the driveway of my UCLA fraternity. She was dropping off a term paper she had typed. I slept through the rendezvous. Circling the block for 30 minutes, late for work, she double parked, came into the house, began screaming my name, and when I arrived downstairs, in front of a dozen “brothers,” she punched me in the ear.

— At 39, I was going through my mom’s last will and testament. She had affixed Post-its, with handwritten notes, all over the document. Two stood out: “You have always been a huge source of pride for me” and “Be a good citizen.”

My mom smoked for three decades and was on the pill in the sixties and seventies, a recipe for breast cancer, which struck when she was 56. Twelve years and two recurrences later, the cancer metastasized in her stomach, and she died six months later. One of my greatest disappointments is she never got to meet my boys. Some of that sadness abates watching my boys with their mother who, among a million other things, calms our oldest boy when he, too, now gets bloody noses.

Our youngest son’s name is Nolan Sylvia Galloway, and he has my mom’s laugh. She would have liked that.

Life is so rich,
Scott


1 Engaging Families 2015 Special Editions — Mother’s Day.

  • Bill Lennan

    Your mom sounds like an amazing woman. Props to you for choosing well 🙂

    The brand article is fascinating and I’m trying to wrap my data around it.

  • Just curious, does your wife calm your oldest son by also reading math problems?

  • Bart Foreman

    Thanks for sharing. Two great posts. Our mothers could have been twins.

  • Telbisz van Dierendonck

    Scott,

    Thank you, this post is so heartfelt that I just had to express my gratitude.
    My mother was the driving force behind this company for well over 50 years, I don’t know who coined the term weaker sex, but were they ever wrong!

    BTW, one of my middle names is Marie….

    Telbisz

  • Allan Barker

    Scott, I cried when I read your story, it struck a cord I guess, I too had the nose bleeds and my mom passed away a few years back, Your videos continue to act as a source of inspiration, information and fun, truly love them. Life is rich even when you are poor if you seek out the fun and appreciate the people and love that we all have somewhere in our lives. Keep up the great work. Allan

  • Tom Lauck

    Your branding predictions sound right on. It’s a little scary for a branding agency. What do we do now?

  • Cliff Harris

    Brands will still stay for those big ticket items. We buy batteries by shouting at alexa, but not cars, and probably not clothes either. Touchy-feely products will still have brand value.

  • apreziosi

    I wonder what the dollar value is on all of that? In other words, we buy a car maybe every three to five years, and clothes more often but not every day. It’s the everyday products like batteries, paper towels, laundry detergent, soap, shaving accessories, etc. that drive companies like Procter & Gamble, Unilever, Colgate-Palmolive, and Newell. Those are the areas where consumers can really influence commerce. That’s where the real damage is done, not on the lot at your local Ford dealership.