16th September 2016

Amazon’s Dash to Dominate the IoT: What Does it Mean for Brands?

It’s been quite a busy month for Amazon with multiple announcements focused on a host of new product launches in the UK.

dash

First, it unveiled Amazon Dash – buttons that connect to your wi-fi and basically allow you to reorder your favourite FMCG brands, from Ariel washing powder and Whiskas cat food, to Dolce Gusto coffee pods and Listerine mouthwash, all at the touch of a… well you get the idea. Each button is calibrated to order a set brand and can be stuck to any surface in your home, so you can keep your Gillette button next to your razor, and even attach your Lenor button to your washing machine, so you can replace products before they run out, no mess, no fuss.

echo

Also, Amazon is rolling out Echo, a speaker with Bluetooth and wi-fi connectivity, which allows you to play your Spotify or Amazon Prime playlists out loud anywhere you want. It even features a voice-activated personal assistant (called Alexa) that reads out your emails, orders your shopping, a takeaway pizza or even an Uber for you, without you having to type in any instructions.

These are just the latest moves by Amazon to stake out an ever larger corner of the Internet of Things (IoT). From the Kindle, to the Fire phone, the online giant has introduced a number of products in recent years designed to keep us connected to the digital space and – most importantly – its retail platform even as we go about our daily routines.

This IoT land grab is clearly a bid to cement its dominance of internet retail, taking on the Big Four supermarkets and challenging online takeaway platforms like Hungry House all at the same time.

For FMCG and consumer services brands, both platforms offer a tremendous opportunity to reinforce brand loyalty among consumers and steal a march on rivals.

There are already 40 plus brands signed up to Dash, each one with a button featuring their logo ready to be sent out to consumers. With their branded buttons available (in theory) at the point where their products are being used by end consumers, they can be confident that their customers will keep coming back for more time and time again. More, having their branding visible around the homes of the people using their products will raise their profile among the friends and families of their customers, creating an additional avenue for them to build their brand image among target audiences.

Echo offers similar benefits for the delivery brands and taxi companies signed up to the platform. They can be sure that, when consumers tell Alexa they are hungry or want to go somewhere, the personal assistant will contact them first, rather than their rivals.

And, thanks to their data collection potential, both platforms provide marketers with an exciting opportunity to understand the people using their products better than they ever have before. They can learn even more about their buying habits – when they use their products and how quickly they use them – so they can tailor marketing campaigns to better suit audiences.

They aren’t without their downsides though, for those brands not signed up. By allowing users to reorder the same product or service from the same provider over and over without thinking, the platforms can make it particularly hard for challenger brands to get a look in. They can prevent them from raising their profile among their target audiences, and reduce their ability to highlight how their own product might better meet consumers’ needs than the goods they are already using.

Should Dash and Echo take off, smaller and newer brands will have to think more carefully about how they reach out to target audiences – especially those using their bigger, established competitors. They will have to come up with creative campaigns to overcome the brand monopolies posed by the new platforms to raise their profile among consumers.

Since the consumers these brands may struggle to reach as a result of these IoT innovations will, in all probability, be younger and more tech-savvy, the best arena for them to invest their creative efforts may well prove social media. Establishing the right buzz on the platforms their target audiences are using will be crucial to help build their profile and encourage the users of Dash and Echo to break their habits and try something new.

By Michael Wood, Senior B2B Copywriter