Corollary: What does the ubiquity of Amazon mean for brands?

I recently wrote a blog post discussing the fate of retailers in an age of Amazon. And many folks have joined that conversation. Amazon is clearly a threat to both online and brick and mortar retailers.

There’s a corollary question that is also worth considering, how does Amazon’s ever-growing influence affect brands?

To take a step back, I believe that the strategic high ground in content, commerce and many other areas is the “first click”. Where does the reader or consumer start? In the earliest days of online it was an AOL keyword (remember rain man?), we then went through the age of portals including Amazon. For most of the past fifteen years, we have lived in the age of Google. Much online activity started in the Google search box–the one box to rule them all. Google was initially an honest broker, sending traffic to whatever content or commerce source it thought was most useful to the consumer.

That has changed over the past few years as we have entered an arms race among Google, Facebook, Amazon and Apple. Microsoft, Walmart and a few others are peripheral players. These big companies are locked in what they see as a zero sum game. Whatever one player gains is a direct loss to the others. This mindset has caused them to strive to be the starting point for every trip around the web and to control the consumer’s journey as much as possible.

Whereas a few years ago, a query on Google might have led to Amazon or a retailer or even a comparison shopping engine, most the real estate “above the fold” on the first search page for a commercial query will offer products and services for which Google gets paid.

This competition has become more acute as more consumers have begun using Amazon as their primary product search engine. Amazon will also do everything possible to keep the consumer within its funnel all the way to a transaction. As a profit-maximizing venture, Amazon will also try to promote products where it makes the most money. I am not shocked by this–even though the Washington Post seemingly was recently. And I don’t object to it. However, I think it requires brands to revisit how they compete in a world where Amazon steers the customer’s attention.

Amazon has the ability to offer its house brands based on the consumer’s query and can use its data to specifically target messages. In an article from Inc Magazine the writer commented “This is like going to the grocery store and finding a sticker advertising the store brand on the box of Cheerio’s that you’re about to put in your cart–and the store brand comes at a lower price.”

Now imagine that the consumer is standing in their home and realizes that their flashlight is dead. They look up and say “Hey Alexa, I need AA batteries.” What will ever-helpful Alexa suggest? Duracell? Eveready? How about Amazon Basics?

While most retailers including Walmart, Costco and even REI, have offered and promoted their house brands, few have had the level of consumer control that Amazon enjoys.

Brands must now invest more in increasing consumer affinity and causing the buyer to make a strong affirmative choice for their brand. Brands can only count on their most loyal customers. Brand preference now means actively rejecting house brands that are well-made, aggressively priced, and attractively presented. Customers with lukewarm brand preference will be increasingly likely to succumb to the allures of Amazon’s frictionless commerce and attractive alternatives.