Paradox of Digital
Circumventing Alexa and friends
requires going back to the future
by J. Walker Smith
Chief Knowledge Officer, Brand & Marketing
Brand marketers face a growing shift in what their brands must do to stay relevant—algorithms. Algorithmically-enabled consumers are the new force in a technology-driven marketplace. Algorithms empower people in more commanding ways, vastly improving the value of what they get from the marketplace, whether it’s a better price, better selection, or speedier delivery.
Low-interest, low-involvement categories are especially vulnerable to this. Habit drives much of this volume, so handing it off to an algorithm or an automated system is an easy thing for consumers to do. These categories will have to work even harder to make what is often a commodity product salient to consumers.
But the disintermediation of algorithms is accelerating in a variety of other ways. For example, technology now enables social conversations to take place in real-time, which influences how consumers make decisions in the moment. Conversion at point-of-sale becomes more about the social conversation and less about in-store marketing. That has already had a disintermediating effect in fashion, for example, even though social conversation and peer influences have always been important.
The fix for this is a paradox. In order to get outside of the algorithms that are making or influencing decisions, brands must get consumers to override them. The only way to motivate consumers to do so is outside of the digital interface, which is driven by a logic that seeks more digital efficiency not more consumer intervention. Brands will stay in control only if they can be the masters of digital, and that means going outside of digital. This is the paradox of digital. The more that digital takes over the marketplace, the more analog becomes important in the marketplace.
The best illustration of this is the music industry. Streaming platforms utilize recommendation engines and other kinds of algorithms to push new music to people. So if you are a musical artist—the brand—the question is how do you influence the algorithm? You can’t change the algorithm without creating some sort of outside impact that shifts how the streaming algorithms take your songs into account. In effect, this means getting consumers to ask for your songs, and that won’t happen unless consumers are influenced outside of the digital streaming environment.
This is the voice problem, too. If a brand can’t figure out how to influence the algorithm, then algorithms will determine what happens in the category and how choices are made on behalf of consumers. Brands want consumers to ask for them by name. Brands do not want to be at the mercy of an algorithm somehow matching it with consumers. You don’t want to just say, “Alexa, I need laundry detergent,” because Alexa is going to use an algorithm to figure out what brand to match. You want to say, “Alexa, I want Tide.” This means getting out of the digital ecosystem. Or to put it another way, it means going analog. In the music industry, musicians have turned to live shows, using more old-fashioned promotions to get in front of consumers. These analog activities have become more important than ever in the digital era.
Analog strategies for digital
Another way to characterize this is to say that brands must figure out how to “hack” the algorithm. This is not totally new. Maybe hacking is too strong a term, but this is what brands do when they try to influence Google search results. The analog version of that is will be more and more important for all categories.
The imperative of hacking the algorithm is growing because brands, increasingly, are encountering algorithmically-enabled consumers. Brands no longer sell to consumers. Brands sell now to algorithmically enabled consumers. No longer just a person, but a person with smart device in hand who uses this device to make smarter, faster, more personalized decisions. This is not the consumer decision journey of old.
Curiously, analog strategies to influence algorithms mean that old-time publicity events become more important. This doesn’t mean the newspaper inserts or direct mail of yore, but it does mean getting in front of people and figuring out the new gathering spaces where brands can execute promotional events.
Impulse categories will be affected more than most. But as algorithms take over decisions and delivery, people will repurpose or do fewer shopping trips. For the broader retail ecosystem, that means people are not in the store, so they are not in the aisles seeing or learning about things to buy. In fact, it’s not just the store. People won’t be stopping somewhere for a snack on the way home either.
Impulse products will need to find the new places where impulse purchases can be made. It might relate to the ways in which people are spending the extra time they have because algorithms have saved them from trips to the store.
Whatever the form of browsing and buying, brands need to start brainstorming ways to influence consumers in a marketplace dominated by algorithms. In particular, this means thinking as much about analog as digital.