Member Brief No. 13: Crashing the Duopoly

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Customer acquisition cost (CAC) is the new rent. When Jeff Bezos once quipped your margin is my opportunity, Zuckerberg and Larry Page couldn’t have known that he would one day refer to their prized advertising operations. Top funnel and retargeting advertising operations can be the difference between the life and death of online retailers.

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Issue No. 269: Brands and Voice Commerce

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According to the Cowen Company, one in seven American consumers owns an Amazon Echo device. Additionally, ComScore notes that 50% of online searches will be voice controlled by 2020. The following is an actual sequence from earlier today.

Alexa, buy pants.

Amazon’s choice for pants is Goodthreads men’s athletic fit, five pocket chino pants. Navy, 29W x 34L. It’s $32.25 total including tax. Would you like to buy?

No thank you.

That’s all that I can find for pants right now. Check your Alexa app for more options. 

Here, Amazon recognizes my request and offers their own brand as the first option. This is a great opportunity for brands looking for a better way to reach new consumers. As consumer adoption of products like Google Home and Amazon Echo continue to accelerate, marketing officers must begin planning around voice as a retail channel. It’s common knowledge that voice assistants will directly and indirectly narrow consumer choices. This is done one of two ways: (a) by recommending goods that are promoted by a brand or (b) by recommending brands and products owned by the platform (see: Amazon’s private labels). For the sake of this argument, 2PM will focus on Amazon’s Echo. It’s a powerful tool with daily relevance in households around the country.

Amazon also debuted Echo Look, a new Alexa-powered device that the company dubs a “hands-free camera and style assistant.” The addition of a camera enables the device to record and comment on its owner’s clothing choices, using a combination of machine learning and human stylist feedback. This advice also takes the form of recommendations, which can drive revenue to Amazon Fashion, and specifically its private-label brands.

Amazon is iterating on and rolling out more features for the Echo Look, including curated content and even crowdsourced (human!) style feedback. It also created an AI algorithm for designing clothes and patented an AR mirror that lets you virtually try on clothes. The value of such a mirror was validated recently by L’Oreal’s acquisition of ModiFace, a company that produces technology that powers similar applications in beauty AR.

Amazon’s Next Conquest Will Be Apparel, Tech Crunch

Through the use of products like the Echo Lookhardware that allows users to layer visual context on top of voice commerce – consumers are becoming comfortable with Echo as a fashion consumer tool. For executives in the fashion industry, it’s an opportunity to establish an existing brand in a new channel.

Product. Establish a six month test of your brand’s products on Amazon. For young brands with tremendous brand equity this can be terrifying, but these tests are commonplace. Just three days ago, Mizzen + Main listed their retail brand’s company’s basics. In a savvy move, rather than listing the entire catalogue, they focused on the brand’s evergreen products. These are the types of products that can lead to strong SEO that will benefit the company whenever they choose to list seasonal products.

Software. Build your brand’s voice application for Echo. To build consumer connections and facilitate the path to purchase, it could be worthwhile to provide your existing consumers a familiar destination on a new platform. Not only will a branded app experience make it easier to do business with you over voice, experts say that it improves SEO on Amazon.com and through Echo’s product rankings.

Marketing. In addition to emphasizing voice SEO strategy to drive discovery, brands are also measuring voice app data to improve consumer engagement, they are enabling product sales within the branded voice apps, and they are promoting their branded voice app through earned, paid, and social media.

Brand. In 2002, BMW innovated by hiring a barely known British actor to star in a then-revolutionary online ad series called The Hire. Costarring Mickey Rourke, Adriana Lima, Don Cheadle and directed by Guy Ritchie, Ang Lee, John Woo, and Tony Scott – this was a significant investment into entertainment by the German car manufacturer. But nearly 20 years later, it’s not the visuals that consumers remember. It’s the actor’s voice.

In the late 1990s BMW noticed their profits were sliding a bit and decided to start targeting internet-savvy customers, a very forward-thinking move at the time. They asked their longtime parter Fallon Worldwide to come up with a campaign that was more than just pretty BMWs sweeping through the countryside like in the magazine and TV ads, something with a James Bond-esque hero who uses BMWs in a variety of different situations.

BMW’s The Hire Was Ahead Of The Curve And Still Has No Equal

Clive Owen starred and narrated the entire series, a project that returned in 2016 under the BMW Films umbrella. In a way, BMW’s marketers gave the brand a human voice and it was such an effective marketing tool that Clive Owen’s intonation remains eponymous to the brand.

The Hire may have been a decade ahead of its time, but it was right on time for BMW’s return to relevance. For retailers who seek to establish their equity over a new channel, remember BMW’s bet on the internet. In a time when scripted podcasts are driving millions of downloads and attracting tens of millions in advertising dollars, consider the potential relevance of a retailer who invests in making their physical goods relevant to audio-hungry consumers.

Once you have command of a new medium. commerce-efficacy is a but one step away.

Read the rest of the issue here.

 By Web Smith and Meghan Terwilliger | About 2PM

Issue No. 262: Next Two Years | Part Two

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The past is prologue, or so they say. While Part One (see 6-10 here) focused on the great stories of the last two years, Part Two focuses on what can happen within the next two years.

5. A 2PM “Top 50” Shopify retailer will acquire its eCommerce agency.

Somewhere a founder is saying, “Wait, we can do that?” And for a small handful, it can make sense. This simple question may persuade a top 50 retailer (see database here) to acquire their go-to eCommerce agency. There is a particular type of brand that this would make sense for. Here are the qualifiers. The digitally vertical native brand:

  • has a trusting and transparent relationship with their agency.
  • is focused on building the brand before the thought of hiring engineers
  • has founders with a non-technical background
  • is a company that does not employ an existing CTO
  • is a brand is doing $20M+ in online retail

The relationship between Glossier and Dynamo stretches back to when the beauty brand was first founded. In 2014, Dynamo took on Glossier as a client, helping to launch the brand in the U.S., developing its website and eCommerce platform and acting as what agency co-founder Bryan Mahoney called its “in-house tech department” in a post on the brand’s “Into The Gloss” blog in 2016. After helping to launch Glossier, Mahoney moved to New York to become its VP of engineering. Following the acquisition, Mahoney has been named CTO at Glossier.

Josh Kolm, Glossier Acquires Dynamo

4. Walmart will acquire another DNVB by the end of 2018.

Let’s face it, selling to Walmart is no longer a substandard exit. There’s a coolness factor at Walmart, these days. In the new commerce economy, it’s something to be proud of. Whether it is Outdoor Voices (no. 76) or Homage (no. 75) or Bevel (no. 79), I expect Walmart to drill down on their mission to attract more millennial consumers to the brand. These were just three of the brands that could make great sense for Marc Lore’s acquisition machine.


From Member Brief No. 5.

According to eCommerce CEO Marc Lore, Walmart continues to search for M&A opportunities that differentiate its online offering and attract millennial shoppers. He added that the company is “definitely still in acquisition mode,” and the acquiring of specialty brands can “help us get the fundamentals right” on both Walmart and Jet.com. He noted that future acquisitions will range from $50M – $300M.


3. Google wants to compete against Amazon.

Brands just want commerce to be easy for them, what’s adding one more node to the omni-channel operation. Google Shopping Action is a service by Alphabet that could be the answer to the shopping simplicity that Amazon has trademarked. Google’s understanding of the online retail consumer may be superior to Amazon’s. And this is good news for the search engine’s collective of launch partners.

[Google Shopping Action] has partnered with major retailers like Ulta Beauty, Target and Walmart by allowing them to list their products across Google search through the Google Express shopping service.

“The consumer is much more demanding,” said Daniel Alegre, President of Retail and Shopping Global at Google at ShopTalk. “In their minds they expect Google to understand the question really well and know so much more.”

Google Shopping Actions features a universal shopping cart and instant checkout with saved payment credentials across Google.com and Google Assistant. It enables one-click re-ordering, personalized recommendations and basket-building based on a customer’s purchase history and loyalty.

Daniela Forte, Multi Channel Merchant


From Member Brief No. 5.

Google to let users buy directly from search results. In what seems like somewhat of a competition with platforms like Shopify, Shopping Actions is a new Google feature which allows users to purchase items directly from search results.

  • Retailers can list their products on Google search, the Google Express shopping service, and Google Assistant on home devices and mobile.
  • Google provides a universal shopping cart across platforms
  • Shoppers can save their payment credentials and make purchases from retailers with instant checkout.
  • Google charges retailers a cost-per-sale fee.

2. Apple Pay becomes the new one-click.

The ad wasn’t well received but the technology has been. With online retail shifting from desktop to mobile, faster than ever, Apple Pay is vying to become the go-to ‘face’ for many of the growing number of vendors that are pursuing mobile-first strategies.

Here is the problem that Shopify is hoping to solve with their bet on Apple Pay for online retail:

A general manager of financial services at Shopify, told Karen Webster in a recent conversation, is that the checkout experience “is a weird three-page mess that really hasn’t evolved over the now almost three decades people have been shopping online.”

Granted, the UX has gotten a bit nicer, and some streamlining efforts have been baked in, but at its base, Hashemi noted that it’s the same bad experience: The customer has to enter their shipping data, billing data and card information “over and over again, and multiple properties.” “This is a checkout process that just desperately needs to go away,” Hashemi stated.

Pymnts.com

1. Spotify will release a hardware collaboration by the end of 2018.

Screenshot_2018_02_20_12.02.37Spotify benefits from its platform agnosticism. If you try hard enough, you can use their service on any hardware device. That doesn’t mean that they aren’t experiencing hardware drama that could stall an IPO. If you ask your Alexa to play a song, it will use the Amazon Music service by default. If you ask Siri on HomePod, it will use Apple Music. If you ask Google Home, it will default to Google Play. Needless to say, Spotify has read the writing on the wall. The streaming service is afraid of being completely cutoff from the hardware ecosystem and will likely land a hardware deal with an incumbent speaker manufacturer by the end of Q3 2018.

Spotify wouldn’t necessarily need to build its own audio equipment from the ground up. The music app could instead partner with an established speaker maker like Bose on such a product. If this were the case, Spotify would have a hardware product where its services are at the forefront instead of an afterthought. Meanwhile, its hardware partner—a company similarly being left out of the smart speaker conversation—would have an additional avenue to compete against products by Amazon, Google, and Apple.

Christina Bonnington, Slate

Read more of the issue here.

By Web Smith | Web@2pml.com | @2PMLinks