Amazon Wants to Be Your Life OS
Overshadowed by their earth-shattering acquisition of Whole Foods, Amazon’s recent focus on highly usable and really inexpensive devices that offer great utility suggests that, more than an omni-channel retailer, what Amazon really wants is to become the life OS for the mainstream consumer, the inexpensive foil to Apple whose iCloud centered system requires entry via beautifully designed but wildly expensive aluminum encased products.
In April, Amazon launched the Echo Look ($199.99). An extension of the existing Alexa digital voice assistant enabled Echo line of speakers, with a camera built in for analyzing your outfits and taking selfies. Within weeks they followed with the Echo Show ($229.99), another Alexa integrated device, this time with a video screen for making Jetson-esque video calls or getting visual results to your voice queries. Why stop at one device when you have multiple rooms in your house from which you want to control the world’s information? Over the holidays, Amazon sold a 6-pack of their Echo Dots ($49.99 each) in a neat little crate, throwing one of them in for free. And If all this isn’t enough to convince you to integrate Alexa into every room in your home, try the Dash Wand with Alexa, announced days after the Echo Show. Buy it for $20 and get $20 off your next Amazon order. That’s right, Amazon is now essentially giving the Alexa digital voice assistant away for free. Actually, it already had been, it’s already somewhat stealthily integrated right into the Amazon app on every iOS and Android phone.
Their prolific line of Kindle e-readers and Fire tablets are cut from the same cloth. Easy to use, full of features, really inexpensive, with Fire devices starting at around $50. Add an Amazon Prime membership for only $99 a year and now you have a constantly expanding array of diverse services easily on tap including discounted prices on almost anything you need with free delivery, a free music service, free on-demand videos, unlimited cloud storage for your photos, free two-hour delivery of some products through PrimeNow, and oh yeah, free books. Of course, many if not all of these services are delightfully integrated into their aforementioned Echos, Kindles, and Fires.
And Alexa is integrated wherever possible, the friendly life OS that, with just your voice (and a Prime subscription), navigates you to virtually any product, song, bit of knowledge, or entertaining distraction your life might require. Access to this ecosystem, is not only relatively inexpensive, it actually can cost more not to participate in it.
Do people really want to talk to the Internet? A June 2017 eMarketer study indicates that only about 11% of US Internet users currently have a digital voice assistant plugged in and that same study suggests that by 2021, that percentage will only grow about 7 percentage points. But looking more broadly at all voice assistant usage including access through smartphones, TVs, computers and cars, a full ¾ of Americans have used voice commands with a device according to another June 2017 study by by the Advertising Research Foundation. Besides that, when SNL lampoons your product, you know you’ve hit the mainstream. The interest is there, we’re all just waiting for the ‘killer apps’.
Amazon is poised to own a dominant stake in this new reality. Not only do they have the first mover advantage in the digital voice assistant space, but according to a June 2017 Morning Consult poll, they have consumer trust over every other major tech player to keep their information secure as well. A not-to-be-overlooked component in a spooked world with threats seemingly looming on every click. Oh yes, and their products are the least expensive out there.
We our counseling our clients to start paying attention and figure out how to best work with Amazon now. For our clients that means exploring selling through their interface directly, or more often, using their robust consumer data (we assume now inclusive of voice search) for programmatic connections across the Internet. For more ambitious clients like General Mills, we’re taking the next step and developing skills (or apps) that will provide functionality and value to consumers on these devices. Finally, we need to recognize the implications of consumers using their voice to navigate digital data more often without a visual element. Search inquiries in particular are subject to losing their visual component. The recent ARF study referenced above indicates that north of 50% of those already using a digital voice assistant are using it on a weekly basis not only for music and news but to ask questions as well. Alexa, how much is Amazon’s stock worth today?
There’s no doubt that Amazon is playing a growing and more intimate role in a huge number of consumers’ lives. With Alexa potentially emerging as their Life OS, we need to consider what it means when a consumer is gathering information that will be delivered through a computerized voice instead of a screen. We need to consider what marketing should look like in this new reality. When consumers can control the world with their voice, will they tolerate interruptive advertising? We need to determine how brands can authentically integrate into this ecosystem in a meaningful and useful way to add value to life rather than beg for a transaction.