If there's one thing the consumer product realm has learned as digital has permeated our lives, it's that physical scale is no longer an advantage. In fact, for many of today's largest fast-moving consumer goods (FMCG) manufacturers, it may be a disadvantage, which is contrary to how they've grown to date.
With the explosive growth of e-commerce since the late 1990s, FMCG manufacturers have been forced to adapt to a world where physical product availability has taken a backseat to digital data. Truth be told, success today is now dependent on quality product images, solid SEO and prominent placement on e-tailer websites—far more so than simply having an abundant quantity or variety on the shelf at the local store.
But even the way consumers consume digitally is changing. Specifically, we no longer need a keyboard to shop—changing the rules of the game once again. Earlier this year, for example, Brooke Neitzel, a six-year-old girl from Dallas, caused quite a stir when a US$150 doll house arrived on her doorstep to the surprise of her parents. As it turns out, the delivery was prompted by a simple statement from Brooke: “Alexa, order me a doll house,” an order that Amazon was happy to fulfill*.
Brooke’s order is just the tip of the iceberg. As more households become smart homes—pushing technology adoption from early adoption to mass-market adoption—voice-enabled devices will ultimately become more ingrained in our lives. We may use them to start our car on a cold winter morning, adjust the volume on our radio and turn off the lights at night. And if NYU Stern Marketing Professor Scott Galloway's predictions come true, we’ll be shopping for our groceries by simply asking for them.
So what can FMCG manufacturers do to emerge as winners in this new world of voice-ordering? How can they establish a competitive edge in a world where physical availability has become irrelevant, and where even digital product images will not be seen? While no one can see the future, we believe that success will require brands to combine strong fundamentals with an appetite for experimentation. We believe four key goals will help guide the path forward:
Let's examine each of these.
Great marketers and product developers always focus on brand building. A consumer who knows and loves a brand isn’t going to ask for a “cola.” A brand fan is going to specify which cola they want. Voice-enabled devices don’t easily lend themselves to product discovery, so brands need to build stronger, more personal relationships with consumers as they seek to influence their purchase decision. And these relationships need to be firmly in place well before the moment when a purchase is about to be made. The good news is that brands can leverage myriad avenues to interact directly with consumers. That’s something they’ve never had before.
The emergence of a dominant, voice-based, retailer is possibly the biggest risk facing brands today in their faceless battles with voice. A behemoth like that would significantly shift the delicate balance of power (and hence profit) from retailers and manufacturers toward itself. So let the example involving 6-year-old Brooke be your guide: Brands that start promoting competition in the voice-based retail space will be well-positioned for the future. They should work with a variety of retail competitors—brick-and-mortar players, pure-play e-tailers, all of the above—perhaps even co-investing in the technology or processes behind voice-based consumer tools.
Taking this thought one step further still, why would brands stop at building their brand via direct consumer engagement? Surely now is the time for brands to make a decisive push into building direct sales with their most loyal consumers. In other words: Can’t brands take advantage of emerging technologies in the same way that retailers can?
As brands build interest-based relationships with consumers, they will start driving the areas that the algorithms focus on—the areas that consumers are interested in. But to do this well, brands will need to be in sync with what shoppers care about. This includes attributes like positive interactions on social media and the amount of positive reviews consumers write. Importantly, none of these things can be bought in the same way that you can buy awareness via advertising during a top TV program. So in that sense, the most agile brands will effectively shift to marketing to algorithms over consumers. Beyond being a key ingredient of any voice-focused strategy, this transformation won’t be limited to marketing activities. It will become relevant to other forms of e-commerce and future internet of things (IOT) replenishment-based appliances as well.
Furthermore, it will be pivotal for manufacturers to better understand contextual search. For example, are shoppers searching for “refresh” or “cheap” or “long lasting” air freshener, or for a specific scent? Understanding key words will be critical to positioning brands online to ensure hit rates. This insight will also play a role in consumer marketing to ensure strong resonance with shoppers and search bots.
In addition to developing inspiring brand building campaigns, building new retail partnerships to reach shoppers, and embracing algorithmic marketing as a new discipline, the brands that will thrive in the new world of voice-ordering will execute the best voice-targeted campaigns.
A major soup brand recently built a sous-chef-style application for Amazon Echo that can do math and remind users of ingredients without requiring them to tap their tablets or smartphones with food all over their hands. Getting in early and developing unique “skills” and other content for voice-based systems will deliver a first-mover advantage to brands. So, why not start an “Ask Alexa,” “Ok Google,” or “Hey Siri” marketing campaign to encourage familiarity with asking for your brands?
Winning in voice-based shopping will not determine the success or failure of FMCG manufacturers today. Nevertheless, the actions that manufacturers take today may well determine whether they are set up for success when voice-based shopping becomes a more significant contributor to overall FMCG sales.
Getting the fundamentals of brand building right will continue to be critical. The likely winners in this new frontier of digital commerce will be exploring new partnerships to connect with shoppers via voice, learn how to optimize their marketing campaigns to drive the algorithms that matter to voice-based interfaces, and indeed create specific marketing campaigns that will help accelerate the growth of voice based shopping itself. Better to be at the forefront of this transformation today, then play catch-up tomorrow!
*Amazon has since said that any 'accidental' purchases can be returned free of charge, reminding owners it is also possible to add a four-digit security code to prevent issues like this from happening.