Digital Gabe
Cutting Edge Commentary On All Things Media

The Sum Of All Fears For Manufacturers

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According to Forbes 50% of all searches will be done using voice by 2020. Most voice-based searches utilize smartspeakers and other connected devices we’re all buying for our homes.  That means the biggest smartspeaker player, Amazon, has the opportunity to control voice search the same way Google has monopolized keyword search for the past 15 years.  With this control of voice-based search comes the ability to manipulate the purchase funnel of products we buy every day.

The biggest fear of manufacturers is the ability for Amazon to offer up its own private label products when you search for a typical household item.  Yes, you can tell Alexa to “add Duracell batteries” to your online shopping cart, but what if you drop the Duracell and just say “add batteries”?  If Alexa doesn’t hear Duracell it can offer up its own brand of private label batteries instead.  For commodity items in the CPG and apparel sectors this has the potential to become a significant business disruption in future years.

CNBC is forecasting Amazon will sell $25B worth of private label goods by 2022, which will be intercepted directly from today’s manufacturers.  For some context P&G, the world’s largest CPG manufacturer, sold $65B worth of goods in 2017.  So Amazon will be up there with the manufacturing big boys in no time.  Now can you see why today’s manufacturers are so nervous about the Bezos Gang?

 

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