RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Vine Used to Boost Private-Label Sales; Advertisers Shifting Budgets from Google to Amazon; and Facebook Launches Portal Smart Speaker, with Alexa.
Vine Used to Boost Private-Label Sales
Amazon is using its Vine programme to boost sales of its private-label brands. Vine was originally intended to increase the number of customer reviews, and allow Amazon to serve as a middleman, while prolific Amazon reviewers receive freebies from vendors looking for exposure.
Now, however, Amazon is using Vine extensively to promote a fast-growing assortment of its own private-label products, distributing free samples to quickly accumulate the reviews needed to rise in search results and boost shopper faith in making a purchase. It gives Amazon a big advantage when introducing its own brands over third-party merchants that are more vulnerable to Amazon’s private-label competition than prominent brands already in stores.
The merchants’ complaints have taken on heightened importance amid a European Union antitrust probe into whether Amazon advantages its own merchandise over rival products on the site. The explosion of Amazon’s private-label brands is a key focus of inquiry, according to questionnaires regulators sent to Amazon merchants and reviewed by Bloomberg.
Amazon is in a unique position, given the vast consumer data it has collected covering a broad range of categories. A typical big-box store carries about 100,000 products, while Amazon sells hundreds of millions. Amazon’s private-label products include batteries, phone chargers, dresses, foam mattresses, and even microwaves. Its own brands will grow to sales of USD$25bn (£19bn) in 2022, according to SunTrust, Robinson Humphrey Inc.
Advertisers Shifting Budgets from Google to Amazon
Some advertisers are moving more than half of the budget they normally spend with Google search to Amazon ads instead, amounting to hundreds of millions of dollars, according to execs at multiple media agencies.
Alphabet has remained somewhat insulated from the threat so far; and its overall ad revenue growth actually accelerated in the first half of 2018, compared with last year. Not all categories of brands are shifting money to Amazon – most of the movement is coming in consumer packaged goods, while huge and lucrative advertising categories, such as automotive and travel, are not yet moving to Amazon. Also, while Google search may be flattening, advertisers are moving parts of their ad spend from other media to different Google properties, particularly YouTube.
Nonetheless, Amazon appears to be emerging as the most credible threat to Google’s cash cow advertising business since Facebook conquered mobile advertising beginning shortly after its 2012 IPO.
This news ties into the consumer trend of beginning the shopping search on Amazon, rather than Google. Consumers will soon start their holiday shopping, and 80% will be searching Amazon, according to a new study by CPC Strategy.
Facebook Launches Portal Smart Speaker, with Alexa
Facebook on Monday unveiled a pair of smart speakers, complete with cameras and microphones, for your home. The devices, Portal and Portal+, directly challenge Amazon, Google, and Apple in the fast-growing smart-speaker market with a unique approach that will emphasise video calling. It’s Facebook’s first hardware product outside the Oculus line of virtual-reality devices.
To start a video call, users can say “Hey Portal, call…” followed by the name of a connection on Facebook’s Messenger service. These calls include entertaining augmented-reality features that can outfit users with cat hats or turn their living rooms into animated night clubs. Another feature is Smart Camera, which uses artificial intelligence and the devices’ cameras to perfectly frame users on video as they move around while on a call.
Besides video calls, the Portal devices can stream music from Spotify, Pandora, and Amazon Music and video from Facebook Watch. Not included at launch are services like Apple Music, YouTube, Netflix, Hulu, or HBO Now.
The devices come equipped with Amazon’s Alexa voice assistant and the many skills available on that service, allowing them to ask questions like “What’s the weather?” or “How are my teams doing?”