FMCG brands need to rethink the fundamentals of marketing to survive in a world of voice-based shopping.
That’s the view of Vanessa Matthijssen, Deloitte Australia’s National Consumer Products Sector Lead and author of a new paper ‘Meaningful brands – connecting with the consumer in the new world’.
“Brands must shift their mindset from owning the aisle to owning the consumer in order to survive and thrive,” Matthijssen said.
“Consumer product companies need to realise that their understanding of, and connection with, the consumer will become their true source of competitive advantage.”
While the majority of grocery shopping still occurs in bricks and mortar supermarkets (ecommerce accounts for just over 3 per cent of Australia’s total grocery sales) the report argues “once voice reaches its forecasted adoption levels for search and ordering, it will reset the basis of competition”
Deloitte’s research argues platform players, like Amazon, will use voice ordering assistants to promote their private label brands and commoditise entire categories. Those gains will come at the expense of brands.
“Brands are at the mercy of an algorithm controlled by the platform. In this new world, consumers may not even be given a choice to buy a brand unless the consumer explicitly asks for it. So all the marketing fundamentals that brands have traditionally used to stand out on a shelf are losing relevance in a world of voice,” said Matthijssen.
That scenario was demonstrated in a video from digital research consultancy L2 last year, in which asking Alexa to “buy batteries” only yielded two choices, both from Amazon Basics.
Deloitte’s research notes that many brands are geared towards influencing and servicing the retailer, however to win in this new world, they will need to shift from owning the aisle to owning the consumer.
Voice ordering removes the influence of packaging, design and positioning of the shelf, which brands have used to stand out.
And while traditional drivers like price and convenience are still important, the report argues brands must try harder to influence shopping behaviour by building trust and tapping into consumer’s social values, for example Ben & Jerry’s support for same sex marriage in Australia and the US.
“Brands should know their consumers intimately by listening to what matters most to them, understanding their motivations, and responding honestly and consistently to build trust,” said Matthijssen.
“There are significant benefits for brands get this connection right as consumers will demonstrate higher rates of consideration, purchase and the willingness to pay a premium. And in a world of voice, brands that successfully connect will see their consumers override the algorithm by asking for their brand by name.”