According to American Banker Amazon has partnered with Capital One Bank to provide services through its Amazon Echo device. While this may be a revolutionary step for banking it has far reaching implications as it represents yet another move toward Amazon’s goal to become indispensable. Approaching the business challenge with an eye on the consumer is the way forward for multichannel retailers that start thinking out of the industries box by learning what consumers value. This is particularly true today as competitive price pressures are bearing down on the market.
I have spoken lately about “technology driven loyalty”, a phrase that I use to describe consumer dependency based on technology. Amazon’s venture into consumer’s homes through VPA’s (virtual personal assistants) like Echo, as well as the Dash buttons, and IoT (internet of things) enabled appliances, will foster a dependency that fosters loyalty, at least for the short term. There are other Amazon examples involving credit cards, for example if a customer has a Discover Card on file it will ask if they want to use cash back rewards to help pay for the purchase. These types of cross industry connections between banks, manufacturers, service providers and retailers are the foundation of the new profit generation models of the future. There are a few examples, some grocery retailers are finding that partnerships with third party delivery services is the best way to extend their value to consumers. Unfortunately there is not enough innovative experimentation to date by the vast majority of retailers.
Apple was genus at embedding itself into daily life and has been able to sustain its resulting competitive advantage for several years now. In a 2013 Maverick research contribution How Invasive Species, From Burmese Pythons to Kudzu Plants, Succeed in Nature and in Business, I likened Apple to the venerable Kudzu plant:
Species Trait: Combines deep roots with high growth speed, and the ability to twist and turn, to smother local inhabitants
Business Trait: Reaches deeply into the daily lives of customers, creating a dependency that overwhelms the competitors
What types of invaders are moving into your territory?
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