Even more than the digital experience, control the data
to keep and control the customer relationship
by J. Walker Smith
Touchpoints are where and how brands make an impression on consumers. Touchpoints define what brands mean to consumers because these are the ways in which consumers come into contact with brands. So the best way to anticipate what brands will mean in the future is to understand the future of touchpoints. Looking ahead in this way, the future of branding can be characterized in one word—Amazon. Certainly the company itself, but more importantly, all of the new things for which Amazon is leading the way.
In other words, the future of branding is about technology. Of course, technologies have always shaped brands and the relationships they forge with consumers. But the nature of what’s happening nowadays is different.
In the past, technologies have brought consumers and brands closer together. Going forward, technologies will push consumers and brands further apart. This is not to say that consumers will have no relationships in the marketplace of the future. Rather, it is to emphasize that these relationships won’t be with brands. Instead, technology-based intermediaries—Amazon chief among them—will be the counter-party to consumers in marketplace relationships.
Digital shopping platforms like Amazon not only want to dominate transactional touchpoints, they want to dominate all touchpoints at every step along the way. Amazon wants to be more than a retailer. It wants to become a seamlessly integrated consumption experience, and in doing so, it wants to occupy a position in the chain of consumer engagement that would disintermediate brands.
Amazon isn’t just about selling to consumers. It’s about completely “owning the relationship,” to use that bit of jargon. Every aspect of the Amazon ecosystem is fit to this purpose. Amazon’s operation is much more enveloping than that of traditional retailers. Amazon has built an infrastructure that mimics traditional retail but which also wraps in search, video, delivery, unrestricted returns, AI, third-party sellers, smart devices, email alerts and more. And Amazon is just getting started.
Competition for owning the relationship is nothing new. Retailers and manufacturers have long competed to be uppermost in the minds of consumers, with retailers pushing their brands and manufacturers pushing theirs. Retailers have always exercised a lot of control over the ways in which consumers encounter brands, from shelf placement to store brands to promotions to pricing. But manufacturers have had a lot of influence in all of these things. More importantly, manufacturers have had other channels, independent of retailers, to connect with consumers and to build the primacy of their brands. What’s different with Amazon is a shift in the role of channels.
Traditionally, brands have built relationships through channels. Brands wanted to dominate channels in order to funnel consumers to transactions at retail. Amazon represents a change in thinking about where value lies in consumer relationships. Amazon wants to build relationships through the data unlocked by new technologies. By using technologies to create a position of dominance in data, Amazon can create an integrated, frictionless customer experience that draws consumers towards it. Amazon doesn’t need to dominate in channels as long as it dominates in data.
Once consumers come into the Amazon ecosphere, brands take a back seat. Data is used on behalf of consumers, not brands. Amazon systematically assesses every aspect of the customer experience, trimming things that diminish it and including only those things that improve it. Brands matter only to the extent that the data show brands adding value for consumers. Only Amazon has the data needed to make everything work together for consumers, and even if brands had these data, brands don’t control the panoply of things necessary to act on what the data reveal. Only Amazon has command of all of these things, and along with it, the data that make it possible for Amazon to exercise that control in the best way possible.
This Amazon approach to managing customer relationships is growing. As a result, brands are at significant risk of being completely cut off from consumers. Consider Amazon’s new Dash Replenishment Service (DSR). Consumers link their smart appliances to Amazon so that supplies can be reordered automatically whenever they run low. Whether laundry detergent or printer ink or water filters, consumers never have to think about brands again. There’s no shopping at the store required. There’s no selection from the shelf required. There’s no in-store or point-of-purchase engagement. There’s no consideration set or share of requirements. Consumers don’t have to bother with ads or coupons. Consumers can simply put it out of mind without worrying about getting what they need.
With something like DSR, the relationship is wholly with Amazon. Because Amazon has control over the data, only Amazon will see if consumers are satisfied. Amazon will share that data with brands only when brands need to make a change. Otherwise, Amazon will keep consumers happy without ever consulting or using brands.
For brands, disintermediation by Amazon means getting a smaller piece of the value pie. Whoever owns the relationship controls the experience. Consumers pay for the experience, so that’s where value is created and realized.
The touchpoints on digital platforms work against brands, so the imperative going forward is for brands to forge more powerful ways of mattering in the digital shopping experience. What’s worked in the past won’t preserve value for brands in the future, which underlines the kind of innovation that brands must master to avoid irrelevance—data, above all else.