Scott Galloway: This Technology Kills Brands
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Scott Galloway: This Technology Kills Brands


Here at L2, we’re not afraid to talk about technologies that we think have been overhyped and are more fluff than substance, whether it’s VR, the Internet of Things or 3D printing. The technology that is probably in our view the most revolutionary and is going to shake brands to their core? Voice. Voice technology is getting tremendous
traction. Alexa is in 4% of US households, Siri handles over 2 billion commands a week and 20% of Google searches on Android handsets are input by voice. Who loses? Brands. Voice-based ordering eliminates the need for packaging, design and end caps – all the things brands have poured billions and decades into perfecting. The decline of brand began with the advent of Google and every day fewer people put a prefix of a brand name in a Google search. And the same is going to happen with voice commands. Our research reveals that over the past year, non-branded product searches have increased in every CPG category. Prediction: the decline is going to accelerate. The death of brand is here and it has a voice, specifically Alexa. Buy batteries. Amazon’s choice for batteries is Amazon Basics AA batteries 48-pack. It’s 13 dollars and 60 cents total including tax. Would you like to buy it? No. I also found a 20-pack of Amazon Basics AAA performance alkaline batteries. It’s seven dollars and 61 cents total, including tax. Would you like to buy it? No. That’s all I can find for batteries right now. All right. Check your Alexa app for more options. So there’s nothing that unusual about a retailer taking advantage of their custody of the consumer to trade them off to a private label brand – which is what Amazon is doing here because when you go on the site in fact you do find that Alexa has more options. There are several branded batteries. It’s just Alexa, without having to bother with the consumer seeing a brand or packaging, has decided to omit or let other brands
disappear from your selection. Also, the pricing is different on Alexa to
voice commands than it is on the main platform. It seems as if they’re taking advantage of this lack of transparency to charge more. We’ll see. I feel insignificant sitting in front of this. So just as the media was fascinated with the fight between Muhammad Ali and Antonio Inoki, the famous wrestler 40-plus years ago, the media is missing the point today and focused on the fight between Walmart and Amazon, who compete against each other, but not really directly as Walmart owns the rural customer and
Amazon is clearly going after the urban wealthy. The real victims here? The people hurt by Amazon? Likely brands – specifically CPG brands. Amazon’s algorithm finds the lowest unit price for a given product and then applies it. If Costco sells a 10-pack of toilet paper for $10, Amazon notes the price per roll is $1, forcing Walmart, which aims to have the
lowest price on 80% of its products, to do the same which in turn, Amazon and Walmart force their manufacturers to lower their price, telling them to stop marketing and start cutting prices which is the equivalent of a payday loan in the world of marketing: it works in the short run, but over the long term you end up broke. If you don’t play ball, Walmart will limit your distribution and create its own rival products and the Amazon algorithm will literally kick you off the platform in a nanosecond. A continued loser: TV networks. What best captures the vibe at the recent upfronts? A stunned and silent audience based on, no joke, the announcement that ABC was bringing back Roseanne. Desperation has a name. It’s TV. Fox registered a 2% gain in viewers this season – if you include sports. If you don’t, viewership fell 19%. ABC viewership declined 8%. The network boasts five of the top ten shows in the adult 18-to-49 category but only one of them is new. The rest are aging franchises, including Grey’s Anatomy and Modern Family. When ABC launches Modern Family they own it and it’s a point of differentiation. However the only thing keeping these guys from death’s door right now are assets they don’t own that go to the highest bidder – specifically the Super Bowl, March Madness and the Olympics. What happens when, and it will, one of the Big Four – Apple, Amazon, Facebook and Google – begin bidding on these assets because they can monetize it elsewhere with their infinitely cheap capital? You’re going to see an incredible decline in television. It’s surprising how long things take, then shocking how fast they can happen. TV is about to enter the shocking phase. The only people left watching broadcast
ad-supported TV are going to be the poor and the technologically illiterate. A few weeks ago we referenced a wonderful nonprofit, Lifeline Syria, that is helping resettle Syrian families in Canada. Unfortunately there are now more donors
than there are families, as Canada has suspended the exemption that allowed these families to immigrate. We have instead decided to focus some efforts and raise some money on a wonderful charity called Gather for Goats, a worldwide benefit for Syrian refugees living in the desert in Jordan to provide a sustainable source of nutrition and hydration for children in the area. Specifically we’re going to raise some money and buy some goats for some good people. It’s strange, it’s innovative and we’d like to think it’s generous. Not bad things to have on your tombstone. We’ll see you next week.

100 Comments

  • Nun Ya

    Systematic death of diversity based on funneled convenience. Wow, way to go amazon. Please break all of the rest of monopoly driven businesses with your oh so superior monopoly model!

  • Troy Gardner

    as Walmart was to mom and pop stores , amazon is to brands, and automation/technology is to products . we are seeing abstraction/obstruction toll bridges being torn down, built on the ashes/infrastructure of the previous…as we head into star trek replicator/holodeck like world, and beyond alexa is intent and intuition zero click x time

  • Elliott Killian

    GiveWell, they audits charities. They do not recommend giving livestock:
    http://blog.givewell.org/2009/12/27/gifts-of-livestock-eg-heifer-international/

  • Jason Clark

    "The only people left watching broadcast ad-supported TV are going to be the poor and the technologically illiterate."
    NAIL ON THE HEAD!

  • Wolfgang Kühnelt

    great video. just one comment: not all brands are suffering. there is a brand named amazon that seems like a winner.

  • Foxrocks Insocks

    As you spoke about the eventual funeral of tv, I was shocked to realize, in that VERY moment, how long it had been since I had actually watched tv. I actually paused the video to think about that. I forgot that that giant screen that displays my PS4 games and a never ending stream of Netflix marathons, actually has a cable bill attached to it. That I pay. Every month. Just so I can watch my beloved Sonic Drive Thru Commercials real time (yeah, you look it up for free on YouTube, you g-damn poser). Are we evolving? Or just adapting to evolution to save face? I'm debating whether or not to think really hard about that, right after this next beer….

  • ipadsforautism

    You have it wrong – Siri "gets" 2B request a week but actually only helps with 200 a month! 🤣🙃😂

  • yocampout

    ok…so why does cable and satellite keep dropping my channels while increasing prices if they need me so bad? on top of all that, their customer service sucks. if my business was dying I think I'd try harder.

  • Paul Thomson

    So you are saying that everyone is going to have an Alexa assistant? This is too simplistic, Instagram, Pinterest, Snapchat, Polyvore etc. etc. will keep the brands alive and kicking, if the these mediums are image based then the brand has a safe haven, also QVC never went away and has grown consistently over the past 20 years, not to mention Youtube as an outlet for lifestyle brands. Then you get into the kinds of brands that fit perfectly into video, video games drive huge amounts of traffic from players uploading their gameplay, various videos made with musical instruments or demonstrating a new digital musical instrument, check Novation that's pretty awesome. And then you have neglected the fact that social is very important in brand discovery, a brand becomes that bit more tangible if a family member or friend likes it.

    If smart assistants were to kill the brands they would have to change a set of deep engrained human evolutionary behaviours, then you neglect the fact that the increasing personalisation of products on the internet may not lend itself well to Alexa, remember people want an experience/advice as well as product after all this is the experience economy right?

  • HONKY SAVAGE

    you can help 10x more people if you take care of them in Syria and not bring them to the west. Where they cant work, things are infinitely more expensive, and they do not have a social identity. Id you really love Syrians, they need a home in Syria.

  • Jon Comments

    I doubt an internet company would pay for the super bowl rights. And if they did, I very highly doubt they would make it only available online.

    Imagine if Apple did, and you could only watch it on an Apple device. It would be a huge negative PR for Apple because so many people don't have Apple devices.

    Like my dad wouldn't go out and buy an Apple device because of it, he would just hear that reason he can't watch it on tv is because of Apple, and be mad at them.

  • Ryan Turner

    So long basic broadcast TV networks with tired, uninventive shows and millions of commercials! I love that streaming platforms are killing it.

  • Stu Rayfield

    Scott Galloway is so cool that even his peers probably have a nickname like "Professor G" or something for him.

  • Jack Roberts

    Canada removes exemption for Syrian immigration, no one bats an eye. US blocks immigration, everyone loses their minds.

  • John Smith

    I cut the cable a decade ago, but a friend of mine watches Law And Order when it comes on (Haha- Time slots!), and it is SO compelling! While being an utter waste of time, though.

  • Benjamin S

    Anyone ever looked at if Scott's predictions are accurate? They seem mostly spot-on to me, but almost anyone can sound good in the present. There are L2 videos going back 4 years, so we do have some history.

  • JuiceManVon

    Didn't know Amazon makes batteries….

    Which I wouldn't buy anyway.

    These companies are really capitalizing on the consumers need to get things not now, but right now.

  • MechanicMan

    Yeah…….this shit just keeps getting better. Script, performance, production Fucking superb! Alexa, I want Duracell!

  • Sean Welch

    My wife and I make regular use of the DVR, and I watch TV programs when they are scheduled. I am highly literate and not very poor. I just like TV.
    At my house we innovated a method of avoiding ads during programs: We pause the show, engage in something called "talking", maybe we get a snack, then we fast forward to the next scene of the show and keep watching. Life goes on even with these inconveniences.

    My wife and I have been discussing the fading of brands for years. You can see it on full display in the disfuctional spaces of any grocery store- whole aisles of salad dressings, or toilet paper, breakfast cereal, or eggs. Brands compete for a dwindling share of users' give-a-shit level. What does the buyer get in return for brand loyalty to a particular cola or frozen waffle? What are the meaningful differences that only a certain label can reveal?

  • Luka Magic

    Only problem with this show is sometimes I know the answer to stuff he leaves questioned, or he'll just be flat out wrong. Admittedly, if these videos came out every day they'd be much harder to make and worse because of it

  • stupidstomp

    https://en.wikipedia.org/wiki/Galloway
    Galloway is a region in Scotland.
    Scott Galloway.

    Coincidence? I think not

  • Weight Loss Ninjas

    I haven't watched TV in years. It's just so mind numbing. The only people I know that watch TV are my 81 year old grandma who loves Mattlock re-runs and my 62 year old mother that loves Rachael Maddow and the View.

  • Dutch 9

    What's with the obsessive Syrian fixation? Where were you guys when the muslims where raping and slaughtering anything that fogged a mirror for a decade in Darfur??

  • Chris Moore

    The difference is buy thru Alexis if quality doesn't matter, and yes even toilet paper has a lot of variance!

  • Pedro Ruiz

    I think this is true for commoditized goods like batteries and toilet paper but lifestyle brands may benefit. You would not ask Alexa to buy a phone but to buy and iPhone. However, if an algorithm takes into account consumer preferences or past purchases into account, maybe commoditized brands may fair better. What do you think?

  • Andrew Craig

    I think voice it just the tip of the Iceberg that is AI. At this point, I think we should be looking forward to the different ways that AI technology is going to drive the market.

  • Damien Neva

    Scott, this latest episode plays like it’s five minutes off Slayer’s 1986 masterpiece album «Reign In Blood» — brutal, relentless, and without apology. Keep up the fine work.

  • Kevin Schloemp

    I don't think that major sporting events will ever disappear from TV. There are too many people that still watch sports via TV. I would hate to see the day that our ability to watch a major sporting event like the Super Bowl will be determined by our ability to have fast internet. Even those sporting events on cable/satellite TV don't require a very expensive package to view the majority of major sporting event. Going to an all internet model will alienate those that are not technologically literate and having the leagues say to those people "you don't matter. Only millennial hipsters that get the technological revolution matter to us". Sports via internet packages are great, but it will never overtake TV as the main viewing device for sports by the vast majority of people.

    Also, TV networks will never go away, they will evolve with the times.

  • Zarcon

    Thanks for pointing out Google's tricks, I'm staying away from voice ordering, I want a good deal not to be taken advantage of.

  • Ds Vic

    Buy batteries… that wont last, shit batteries, batteries you'll hate. Rely on your brain for everything, not a voice or Alexa..

  • Daniel Silvestre

    How long till we get add-free sports content based in a subscriptions model? Certainly, some of the big guys are aiming at this.

  • Francisco Nz

    i watched this vid at my desk near alexa & she tried to order batteries for Scott -_- some times she ignores me :/

  • VictorFelix

    I think It goes to like Gary V says marketers ruin everything. Building brand will be back to radio like advertising on these platforms. That's if platforms like amazon will allow it.

  • Dean Collins

    Watching that Alexa battery search was like watching paint dry…..voice is TERRIBLE for search.

    Sorry but BS that 20% of google searches are voice.

    Scott…..voice has lots of potential but this isn't it.

  • Benjamin Albert

    i admire the serious informative nature of this video. I like the humor but this one was dense and interesting.

  • John Eustace

    Just watched this at the same time as McDonald's announcee pulling out of the Olympics Something Coke have been desperate to do for years, so here's the end of brands.You want a Cola? Sure but nothing like the brand you think you loved

  • Armon Mitchell

    Death of brand….? IOT loser….? hmmmmmm…..? Banding isnt labeling…. Brand losers….? isnt thats like saying the differences between Yugo and Lexus will be done away with?. IOT, its very very early days. IOT is gonna do for the "real" world what cookies did for the net…. and if thats ho-hum then i guess youre right. Aaaaah several other orgs boing the goat thing why not just help them and not try to be the center of attention or is it you dont want to be affliiated with those other orgs.

  • Nick

    I'd love to hear what Gary Vee has to say about this. His two favorite things Alexa and Brands. Dual to the death. Who will win!

  • Sam Li

    This is so true with TV! with youtube available, why would I pay insane amounts of money for TV. It not like comcast internet is cheap… also youtube is on demand which is what this generation is all about, stuff on demand, no more waiting.

  • sgtsnakeeyes11

    Giving goats or other "animal gifts" is a bad way to help people in need. This is well established. You can just google "why animal donation doesn't work".

  • JKEleison

    Voice command tech getting rid of branding is one of those things that I doubt will gain dominant traction, much like the prediction that car ownership will be gone by 2025. It just sounds like those estimations you give cause you're really invested in the idea. Although I could just be oblivious of the technology's "Hype Cycle Indicators" and we are simply undergoing the "Peak of Inflated Expectations" part of the cycle [Source: Gartner.com] [Look at: "Bold" by Peter H. Diamonds and Steven Kotler]

    Don't forget, 98% of people choose the branded options at grocery stores instead of the cheaper store brand (wal-mart, target, Kroger, etc.) [Source: "Positioning" by Al Ries and Jack Trout]. Brands are powerful. And so long as people are using Facebook (And the internet in general) and are frequently being exposed to brands through targeted Facebook ads, brands are going to dominate. Although I'm positive the dynamics have changed through Amazon. Gotta look into it deeper..

    Of course, never underestimate Amazon. So who knows?

  • Alon Eisenberg

    Absolutely love the reference to Woody Guthrie here… Not that he would have supported big brands, but definitely would be against the use of this technology to undercut small brands and mom-and-pop shops. Especially considering the fact that Jeff Bezos is the richest man in the world… very clever. Great video!

  • piet mondrianstudent

    WHy watch TV…it stinks; who need some idiot tv execs telling me what I want to see? Most raw video produced by people on YT is more entertaining and REAL!

  • Dexter Dake

    If you’re talking about companies who only care about squeezing the most margin possible regardless of the customer experience, then yes. Keep in mind Brand is more than visuals. It’s a collection of memories a customer has with your company. It’s the way the product feels in your hand or the speedy customer service rep. who went the extra mile, or not. Great companies that use design thinking to empathize with users and mold a process, product, or service so the least capable person in the room will survive.

  • Troy Gardner

    @3:02 Amazon algorithm finds lowest cost per unit

    This is NOT remarkable, only interesting that it's so difficult for retailers to do consistently and INSANE consumers to demand (e.g. I can find rc cola for $1/liter vs $1.39 a 16oz a few minutes walking distance among many other things a competitive capitalistic economy in close proximity shouldn't be possible to exist)

    This is something rosie riveter generation mothers had to learn as second nature.. look up depression era cooking (e.g. with hot dogs) which is where all these so called beloved CPG companies and zombie brands (e.g. Disney vs pixar… PixarGhibliland launched today…(we wish)

    And basically again every decade 70 etc with each new money crunch

    Anyway…..

    Having such numbers Amazon failed (and affiliates imho) never meeting the ground floor of

    On a perfect average day/ night
    I need just 2 ear plugs per say 2 weeks. They are sold by 20 ..40 ..100 which as a mobile nomad (fortunate/ unfortunate depending on what metrics you measure quality of life by)…I just don't live that way or want to love life defined by such semi precious having enough and hindered by excess duplicity/ redundancy

    Having less I take better care of them & more appreciative of them vs having a big box become indifferent and expectant of there always being more and unaware of opportunity costs of say $10 trapped &entrapped in a "best buy" (per Amazon algos.. via economies of scale many times over(t))

    Multiply this across every item/service you need/use/own (or vice versa lol) and this adds up to huge discretionary quality of life distinctions most miss as it's simply not an option (think bulk food at health store sold perfectly based on what you have actually consumed and then copy paste averaged and forward projected… trivial for AWS on lambda alone spare CPU cycles…. then aggregate the indexes do a group buy on brands worth keeping (some actual discernable remarkable trade secret e.g
    Justin's nut butters process) or if plastics like earplugs Amazon should WhiteLabel2.0++ and survey actual users about Actual problems push that into r&d (like they developed Alexa) and boom..a independent possible stock reportable) CPG in house competitor to also hold other brands accountable to a) customer role focus (Bezos an I bet most stock market tech darlings use/ love/ detest Amazon) b) ensure production teams and tech are happy vs a money game (and production teams shouldn't expect retirement or buying an island given automation DESTROYS WORK & ABILITY TO WORK (which currency/ stock are supposed to be SRT/KPI trend indicator of, which Alexa suitably integrated with deliveries and consumption of ( Alexa & Amazon button meets quantified self at point of consumption (Fitbit meets Google glass whatever etc))

    real life is simple
    .. hundreds of millions of years identifiable species have existed and thrived without more than the basics which with (society x technology x science x etc) cost less than nothing (WHAT IS SOCIETY FOR ?!? "BITCHES")

    Put simply everybody (pets (animal/ insect/ plants) & plants (agriculture n exotic) would get ALL basic needs for as long as they naturally live and then freed up have unlimitedish amounts of stuff to learn play etc ( vs startUp ⇒endD((own)ed) throwing it ALLL (((((TRUEself)family friends) healthy health) "My"self: respect peace of mind etc )etc) etc….)

    Amazon & dependent consumers completely missed the boat here instead of having everything they basically just made a better big box store without THEIR commute, finding stuff in vast aisles of mostly irrelevant (one size fits nobody) assuming it's in stock.. something (e.g. medium size out but seemingly all others ( xxl xl x s ) there for four months

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