The 3As Of Marketing That Are Reshaping Customer Engagement
Amazon, Apple and Alphabet (Google, for the uninitiated) have a combined market cap of more than $2.8 trillion today and if these companies were a nation, that would place them 5th in terms of GDP, a notch above India. And catch your breath after you read that ten years back, their worth was just one-tenth of what it is today!
So, what happened? Why do we love these companies? Why are authorities nervous of their growing influence? And, is there a common thread that can inspire other businesses?
Ecosystems:The single word takeaway for those who wish to imitate the successes of these companies. I could have said that these companies are great because they are well in 3As i.e., Adaptive, Aggressive and Accessible (but let's keep that for some other time!) The most important trait is that all three are racing towards building their own Ecosystem.
Imagine this:You bought an 'Amazon-exclusive' TCL television that has a Netflix button, royally placed at the center of its remote. You are watching your favorite Pixar movie, which is being streamed only on Netflix (for now), and you suddenly start feeling hunger pangs. You turn to Alexa and ask her to get you a pizza, which she orders via Zomato, her exclusive food partner. But you changed your mind, and now you want to step out for a bhelpuri instead. Just ask Alexa to Book an Ola, her exclusive ride partner!
The answer to effective growth is not just Economies of Scale anymore, but Economies of Ecosystem
Do you see what is going on there? Big brands are trying to create a moat around their customers' experiences so that they never leave their ecosystem. To be fair to these brands, this seems to be working just fine for now. After all, who will not want to keep their customers engaged and prevent them from falling into the hands of the other camps. But from the customers' perspective, this could mean that they are getting exposed to lesser service providers compared to a world without these ecosystems. Customers are getting lesser options to choose from, and in future, if such ecosystems become inevitable they could start command crazy premiums or invent their own privacy rules. What is currently being promoted at the pretext of customer comfort could turn on itself and start biting them back because customers would have nowhere else to go.
One may argue that these are just some blue-eyed projects and not the core offering of these companies. After all, connected devices are supposed to do just that connect you with others! But the issue is, if the connectors happen to be so big and powerful that the fate of end companies depends solely on being part of their ecosystem or not, I think that is a dangerous proposition. Worse still, if two big companies join hands, then the third stakeholder (customer) stands to lose. It's the balance of power we need to watch out for.
But it is not a bleak story. We have seen how PayTM became a fairly big brand just by piggy backing the launch of Uber in India. We have also listened to the arguments on both sides of Facebook sponsoring free internet for the yet-to-be-digitalized countries. As businesses/governments/customers is there a clear cut solution? I think like for most of the things in life, the answer is It Depends!
However, one thing is certainly becoming clear. The answer to effective growth is not just Economies of Scale anymore, but Economies of Ecosystem.
We are entering a phase where brands will jostle for space for being tagged with other brands. They will also probably go to extremes to show their loyalty towards these 3A connectors in order to feel more secure. This has a scary resemblance with the cold war era if you happen to have a crazy imagination like me. Where Google is the Uncle Sam and Amazon is Russia, both hurrying in the arms race. However, all my Android friends will agree that in this fictional `corporate world' Apple will play China (did you say firewalls, censorship, and more walls). But this fictional buildup is based on true events try buying a Chromecast/Apple TV on Amazon, or streaming Prime Video on a Chromecast, or You Tubing on a Firestick, and you will know!
Only time will tell who will come out as the winner in this cold war, which is brewing at both Silicon Valley and Wall Street at the same time. Which side are you on?