Amazon: All Your Brands Belong To Us

The evolving world of home automation. Amazon's Alexa has firmly captured my world: she controls lights, heat, power, entertainment, even our refrigerator! What I find fascinating about this is another example of Amazon using it's leadership position to undermine brands. For example, I have 7 or 8 kinds of devices from different manufacturers, but the only way I interact with them is through Alexa. That means the brands of the devices themselves are immaterial, which makes the only thing that they can compete on is price.

But wait, it gets worse. Amazon sees what devices people are buying. Let's say something gets really popular in the Echo ecosystem, like a Phillips Hue light. Amazon can now manufacture a similar device under their Amazon Basics line, brand it as "Designed by Amazon for Echo," and put it up for sale at half the price. So long, Hue.

I recently had a Twitter discussion with Rakesh Agarwal (@rakeshlobster on Twitter) about an article a colleague of his (Noah Glass) had written. In it, he postulated that the rise of the "ghost kitchens" (those places that food trucks and catering companies use), combined with the rise of food delivery services would yield a very destructive trend, unless the restaurants on the delivery services insisted on noncompete SEO clauses. Put more simply, these trends could all combine to have the food delivery services do precisely what Amazon is doing with Alexa and it's affect on brands.

Here's how @rakeshlobster put it:

Uber eats/Grubhub/etc can use their mass of data to take the top requested dishes and knock them off. ... then use their top of funnel distribution to promote them, and at lower prices.

Imagine a future where you log on to Postmates to order dinner. You browse a restaurant, find a dish you like. Postmates tells you that it will be 90 minutes to get that, but you can get the same dish from a chef who once cooked at that restaurant in 30 minutes, at half the price. Whoa. Hello, disruption.

2 years ago, Amazon was begging every home device retailer to let them help make their devices compatible with Alexa. A year ago, Google did the same with Google Home. Now, the home is flooded with "Works with Google Home/Amazon Alexa," and it's a win-win-win. But a year or two from now, what stops Amazon from offering their own Alexa refrigerator, if that's a hit?

Dangerous times.

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