Is there a future in retail

Trade in transition: six theses on the future of trade

Thesis 4: Alexa and Co threaten the existence of branded goods

A small box that plays music on command or reports the current weather, keeps an eye on the stock of food and, with consent, re-orders products yourself - what took place in science fiction films a few years ago has long been a reality. While Amazon's Alexa was viewed with skepticism when it was introduced, the intelligent voice assistant has long since found its way into households around the world. With this coup, Amazon has clearly outperformed competitors such as Microsoft Cortana, Google Assistant or Siri from Apple and captured the majority of the market share. In the USA alone, the box is already in twelve million households. The result: Alexa is threatening branded goods companies and is rewriting the rules of sales and marketing. The friendly language assistant prefers to offer own brands or products from well-deserved suppliers with the “Amazon’s Choice” seal. Alexa only mentions alternatives if the customer explicitly asks for them. It is therefore essential for brand manufacturers to know the rules of the game of voice assistants and to develop a sophisticated “Amazon strategy”.

Thesis 5: The power lies with marketplaces - ecosystems are the new online shop

While many retailers are still fine-tuning their online shops and buying their tickets for the digital consumer world, the retail giants are already one step further. If you want to set the tone in online retail, you have to think in terms of ecosystems - and the digital champions from the USA and China in particular are way ahead. In their unprecedented arms race, Amazon and Alibaba are showing how retailers can develop into marketplaces. With additional offers and acquisitions, they now form a conglomerate of services: from classic e-commerce and marketing on behalf of manufacturers to entertainment offers, payment services or web services for companies. The result is increasing market power: smaller providers do not have enough traction and resources to develop their own ecosystem and are therefore becoming dependent. But that also offers opportunities: Those who learn to move successfully in existing ecosystems can accurately offer their products to an almost infinite target group.

Thesis 6: Retail is dead - long live retail