Brands are shouting over each other for the #1 spot on your smart speaker

As more and more consumers buy their groceries using smart speakers, brands are struggling to find ways to weasel into Alexa’s good graces.

May 14, 2018

To buy groceries, Americans aren’t heading to the store or even the internet — they’re just turning to Alexa.

Today, consumers purchase $2B of goods from their smart speakers, but in 4 years that number is expected to skyrocket to $40B.

As more and more homes gravitate toward smart, e-commerce enabled speakers, struggling consumer brands are fighting to ensure that Alexa knows about them so they can make their way into smart-pantries.

According to Alexa if you’re not first, you don’t exist

“Alexa, order some tea.” – Got it. Ordering Celestial Seasonings Sleepytime Tea. 

Because Celestial Seasonings was first, but every other tea brand lost. See, with Alexa, unless you ask for a specific brand, the brands listed first in the Amazon store (or in your history) are added to the cart by default — meaning that, unless brands are in good standing with Amazon’s algorithm, they might not make it to your cart.

As fewer shoppers buy in-store, big brands have taken a hit (this year Hershey has dropped 18%, General Mills 28%, and P&G 20%). Some brands with name recognition (like Kleenex or Cheetos) may benefit, but the vast majority will lose.

Apps are the new Super Bowl beer displays

Brands that used to pay for prime real estate in grocery stores now pay for Prime real estate on Alexa — mostly by creating branded apps.

To keep their mayonnaise moving, Hellmann’s created an Alexa app called “Hellmann’s Best Recipes” that integrates with Amazon — and ensures customers order the right mayo.

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