The (incredibly successful) exception to the rule
Yesterday I spoke at StorePoint Fresh in sunny Scottsdale, AZ* on 5 Trends Reshaping Retail. One of the trends I included, The End of Excess, focuses on the tsunami of innovation responding to consumer demand – and government legislation – to reduce packaging waste (see Myro's refillable deodorant), food waste (see Apeel Sciences's plant-based produce protection) and more. Along with that trend, I tackled two other trends that focused on having a positive impact on the community, with a reference to Edelman's latest Trust Barometer:
74% of US consumers believe businesses can take actions that both increase profits and improve the economic and social conditions in the community.
One of the attendees came up to me afterwards and asked: "How do you reconcile Amazon's success with the consumer demand for sustainable and ethical organizations?" It's a great question, and one our team has wrestled with. Short of a few boycotts here and protests there, they've proven to be the exception to the rule. They're even more of an anomaly when you consider Prime membership penetration is highest amongst $150k+ income households. Those wealthy consumers that go out of their way to buy Everlane, Seventh Gen, Allbirds etc. turn a blind eye to Amazon's lack of social and eco-credentials on account of how insanely convenient and competitive the service is.
I said "Few businesses can get away with that strategy" and "It will catch up to Amazon eventually... at which point they will be quick to react".
Hmm. Not a very satisfying conclusion.
Can it be true that if a company is the best in the world at customer centricity, consumers (including me) are selfish enough that they will ignore the negative externalities - even as evidence piles up like a mountain of smiling packages on our doorsteps?
Lyft took a bite out of Uber's market share in 2018, thanks in no small part to the latter's back-to-back scandals. If anything, that proves that competition isn't just about keeping down prices (no sh*t, you say).
Without a serious competitor, can the retail giant indefinitely harness low prices and unbeatable convenience to outrun the responsibilities the rest of us are saddled with? I'd love to hear (and then borrow) your own ideas on this so I can better answer the question in future. Thanks in advance!
Quick Update that occurred to me after I posted the above: One reason Amazon gets away with less virtue-signaling on eco/social measures is they view and portray themselves as the ultimate platform/middleman. So you the consumer can buy the ethical choice from them if you care. And hey, if someone wants the cheaper less clean version that's their choice. In that respect, Amazon might find themselves in the same trap Facebook did where Facebook spent a decade saying "We aren't a media company. We are a humble platform for free speech. Therefore we won't shut down conspiracy theories or police fake news." Which of course backfired for them in 2018, and the public rage seemed to catch the entire C-suite off guard.
* A cacti-covered landscape where the real networking still happens on the golf course.
I wanted to answer this complex question in one tweet, I really wished to be the President of the United States, but the presence of marketing intelligence didn't let me. Please shed a highly justified tear for me crossing time-zones on Air Force One/president-size bed, and read on: Amazon’s current customer success is more fragile than it looks. Why isn’t it more apparent? As we’ve seen with the endless “HQ2 competition” media fuss, Jeff Bezos has only half-read the Edelman stat, because contrary to Richard Edelman who turned against usual PR practices, Jeff is a great fan of them. It half-works, half-not. It half-works in brand image building cases like this one: Why was the article in Forbes concerning?Reputation Institute’s RepTrak study entitled ‘America's Most Reputable Companies In 2017: Amazon Knocked Out Of The Top Spot’ the year Amazon lost to Rolex, and another article on the same topic the following year soberly entitled ‘America's Most Reputable Companies 2018’, the year Amazon didn’t even make it to Top 10, and why did the same article not mention Amazon even once??You tell me, America, you invented both the term “media framing” and the term “SEO positioning”. Since you’re busy being great again, let me answer for you: - because it’s not exactly a bad thing to lose to the brand synonymous (better still, metonymic) with both “luxury” and “success”; especially when this brand can say “hey, we’re on Roger Federer’s wrist, aren’t we as much of an achievement and as much likeability and he is”. Amazon still got to say “we’re next to those guys, we nearly same as them!”, which was particularly useful when you want to get luxury brands to sell on your platform. In brand image terms this was an equivalent of saying “I lost to Federer, the cool and always smiling guy, incidentally also world’s biggest tennis legend”, hardly something anyone would be ashamed of, quite the contrary, - because in 2018 when increasingly conscious consumer will Google/DuckDuckGo “Amazon” + “reputation”, as social proof is the most powerful social/marketing mechanism, they won’t read that Americans have fallen out of love with the Amazon brand, they will only bump into the article from 2017. It half-not works, because such tricks might not be effective enough in convincing Americans that Amazon in 2019 doesn’t look like a giant too heavy for its own legs, forced to optimise workload with “no-toilet breaks” work schedule, and shipping boxes the size of an adult coffin deployed to deliver a pen. Not in the world of ‘Glass Box Brands’ where other companies get to humblebrag about their great work culture and company practices making the contrast ever starker. If you ask Bloomberg, Amazon Prime “grew just 8 percent over the past 12 months to 97 million U.S. subscribers, according to CIRP, the slowest pace since the research firm started tracking membership in 2012.”? So less and less people are getting Amazon Prime, but are those already married to it ready to look for alternatives and divorce Jeff? Well, isn’t the person who can do it in the most apparent way doing it already? Would a hashtag hashtag #IDivorceYouJeff be a great idea for all Amazon customers? Heck yes, America, show us you can be “great against”, against your billionaires.? Why is Matt Quinn right that Amazon is Jeff’s personal brand? 90% of Amazon Prime customers are based in the US. Seems no one else is willing to get hitched to the American Dream. Why is ‘Prime’ vs ‘non-Prime customer’ distinction revealing? Because as Rory Sutherland has skilfully noticed, elsewhere “Amazon is good at selling one thing to seven people, but not so good at selling seven things to one person”, and as far as I’m concerned, getting one rare book a year from Amazon doesn’t make me an ethics/sustainability criminal. Why will Americans increasingly be ready to file the divorce papers from their Prime subscription? Reason #1: When the customers realise that Amazon is no “exception to the rule” — it’s an algorithmic tech giant financially supported not by customer choice, but by B2B cloud and advertising services. In this data-powered ecosystem, Amazon Prime is used as the perfect cue, as Charles Duhigg would say, to start binge-shopping and compulsively adding items to basket whenever you’re bored.?Is user engagement dropping on Facebook now that we’ve realised that compulsive clicking on ‘Likes’ on a semi-media platform is a dangerous practice to both Western democracy, and our individual well-being? Mark Zuckerberg cannot deny the drop in user engagement (he’s only found a more practical explantation for it, that user engagement is dropping because Facebook adjusted the algorithm as the company cares for us to spend less time on Facebook, stealing the term “time well spent” from their biggest critic, Tristan Harris; if you can’t beat them, you join them, even if that's the last thing they want you to do).?It's called Amazon Prime, because you’re primed into certain behaviours? Reason #2: Amazon’s deteriorating unethical and unsustainable image will make it impossible for sustainable and ethical brands to use Amazon Marketplace as it would hurt their image. 55% of product searches start on Amazon vs 26% on Google (L2). Great news if you want to be an advertising platform, not so great if you are a retail platform. It will only make customers realise how many brands are missing from Amazon. So the customers will come, get their cheap generic Amazon batteries (as 1/3 of batteries sold in the US are Amazon batteries, as Scott Galloway claims in the “The Four”), their toilet paper, some rubbish bags if the algorithms suggests they might want to add the item to their basket, and leave.?Not much of a “Everything store” if you can’t find everything in it, is it? Now, will all those substantial disposable income households drop Amazon Fashion for Everlane? No. Simply because Everlane needs to address issues in their marketing communication strategy, and I see many that need fixing. Ideals are not enough in the attention economy, it’s above all the way you let them shine. Should Everlane step up their marketing excellence game? Yes, as they will be getting more competition. Why will there be more ethical/sustainable brands popping up? The answer comes from a very happy union of two Trendwatching trends: ‘End of Excess’ and ‘Lab Rats’ — as we’re increasingly realising that excessive plastic (and micro-plastic) is everywhere, we will start experimenting with eliminating this excessive potential toxicity from both our surroundings and our bodies. There’s plastic in both regular toothpaste you put in your mouth, and in 100% mussels fished out on French coasts, it's not better with other marine animals that we get to eat. Getting rid of excessive plastic means rethinking our way of life: we’ll increasingly become junk-averse, to all kinds of junk, and it’s more than a Fempowerment pun on toxic masculinity. We’re becoming hyper-aware of all kinds of potentially toxic junk which stays in our gut and guts. I call this instant individual “urge to purge”, you guess it, ‘Purgent’, and between Marie Kondo making it to Netflix and to America, Noble Prize for autophagy theory, and mindspace-freeing meditation apps, brands are jumping on that baby-on-steroids trend with both organic toothpaste and activated charcoal toothpastes, shampoos, smoothies and waffles; with Spotify allowing you to block “crap” artists; and Barclays' app?button enabling customers to "turn off" payments with different retailers.?I don’t see why one of those retailers couldn’t one day be Amazon. In Europe, I see more and more “you shouldn’t promote/shop on websites like Amazon” voices rising. Plus, don’t underestimate the excess-eliminating power of a small Japanese lady asking you “will it really bring you joy if you know in what conditions it was brought to you by Amazon?”.
Product Development and Sourcing Solutions for Kitchen & Bath Mfgs.| Vice President at Brown Wood Inc.
6 年I feel the same way about several other large retailers and do my best to avoid them, including Amazon. I haven't gone cold turkey but have found myself using Amazon as more of a search engine and less of a shopping cart.
Strateeg en toekomstdenker | Freelancer | Eigenaar van FutureBase ??
6 年Funny thing is that I am working on a scenarioplan on city distribution for a last-mile delivery player at the moment. There are so many uncertainities regarding city distribution; the role of the government, technological developments AND customer needs we should take in mind that could become the new reality in a few years. Maybe now Amazon is this amazing big guy, but I think we could compare it to what happens with Facebook for example. At some point the government will have to interfere and have to draw some lines with regard to sustainability since that is a world problem and not just some local issue. Maybe the sustainability initiatives done by the big corporations are just shiny and for PR, but at some point they will be the standard. Consumers are demanding, a lot, and would like to have convenience, new experiences and at the same time want to feel guilt free about their actions. I think that the knowledge of consumers about the impact of fast-delivery (and Amazon) is increasing and thereby also the feeling of guilt. It is no longer sexy to show how much stuff you own, you will receive some sort of status by actually doing good. That's probably why the non-straw movement is a big hit. When brands figure out a way for their consumers to show they are acting on good (guilt free) by buying/using their product/brand, the company profits will increase and will it improve the economic and thereby social conditions in the community.
Brand Manager at Sabre | Transforming Technology Brands into Industry Leaders
6 年@Maxwell Luthy?Right now all the shiny sustainability initiatives done by the big corps really is just for PR (with a dash of genuine care deep down in their big fat wallets), but despite any packaging initiatives or reduction of carbon emission motives, I don't think retailers have been successfully been able to transfer the "feel good" factor to the consumer or eliminate their guilt from the pile of cardboard box amassed from your Prime orders. For example, JD.com has a reusable green box scheme so that customers can return the box back to the delivery man afterwards. But retailers will eventually and inevitably need to make a visible change (be the "Superhero" ??) for their consumers esp nowadays with Gen Z and Millennial’s hippie consciousness, they'd want to feel like they're contributing somehow - look at the no-straw movement, every millennial that carries a metal straw thinks they're one step to becoming an environmental activist???Eventually these thought-purchasing consumers will start fluttering to Zero Waste stores instead of cardboard-hogging Amazon. Thanks for the great article!?
Senior Content Marketing Manager at BACtrack
6 年Unfortunately, to answer your question: yes, since in my view, we have not (yet) fully evolved from our cave dwelling days. For most people, as you so rightly assessed before, convenience outweighs higher consciousness. While we may care about societal issues overall, our immediate concerns - getting what we need right now, as close to 'now' as possible - will always rank higher. Always. Amazon, as you said, is unbeatable in delivering on this. And since we are so self-focused, it's difficult to regularly put OUR needs on the back burner and consider the larger impact of our individual behaviors (in this case, our Amazon purchases).