Will your brand survive the "Replenish Before Depletion" era?

Tech disruption abounds. Delivery. Drones. AI. ML. Name your acronym. There is no shortage of corporate speak that will impede your current business model. But none of them speak to the fundamental underlying shift that is driving consumer behavior. Because remember...consumers don't change behavior because of tech...they change because tech enables an easier way.

• MP3s made it easy to share music... and ownership vanished
• Netflix made it easy to view anything, driving content relevance
• Uber/Lyft provided certainty in transportation

So what about all these great next techs? AR? VR? Holo-whatever.......you're missing the boat. The biggest change in the last 50 years is this:

"The ability for a consumer to replenish an item before it is depleted"

Why is this important? Because for years brands fought at the FMOT (First moment of truth") at the shelf, when a consumer was making a purchase decision.

Then it was Google declaring the ZMOT (zero moment of truth) as a consumer searched for a product on line before shopping. But then an interesting shift occurred. Google held ~70% of product search....but as Amazon grew and became the "everything store" the equilibrium moved to 40% Amazon / 30% Google as the starting point for product search.

The old model of a replenishment has been optimized over the last decades to drive down inventory, shorten product cycles and improve margins for stores....the model has become increasingly efficient.

The model on the left is about to be eviscerated. No longer will a consumer decide they are out of a product and run to the store or go online.

Instead, a fridge like the Samsung Hub might detect the upcoming expiration of food or depletion of a staple and re-order it without consumer intervention. Or the washing machines re-order detergent. Or the coffee machine sends an order to Blue Bottle.

In the future there will be only one purchase...the first

It will become increasingly important for brands to get the first purchase in a category (the set-up purchase). Once you are locked into a replenishment category...game over for the competition. This is where other disruptions come to bear. (Voice/AI/Echo/Dash) Lets look at Amazon..

I'm at home. I realize I'm out of baby wipes and no time given two kids under 2 months. I ask Alexa to order me baby wipes. Since I've never ordered wipes through Amazon, Alexa recommends a 4 pack of Amazon Elements, their private label offering. While ordering via voice is less friction than opening up my computer, trying to sort through purchase options actually adds more friction. "Alexa-- read me three more wipe options, then listening to the options, etc." So naturally I default to the first option. Now every time I ask for wipes, Amazon elements are the default option. If I want to get on a replenishment schedule, Amazon Elements are my first option. The lock in is tremendous. The consumer never even sees a second option. For the categories where Amazon has no private label, I'm sure the voice product placement/slotting fee is going to be pricey.

So how will brands compete in this new arena? Will there be alliances between the packaged goods companies and the electronics producers (Samsung, Maytag) to cut out retailers like Amazon, Target, Walmart, etc? Or will Amazon have such a vise grip on the market, that brands will have to live or die by the Amazon ecosystem? Or will an Apple/Google ecosystem provide a third path for brands to reach a consumer ?

Time will tell but clearly the race is on for brands to be the last "first purchase" a consumer will ever make.

#ecommerce #tech #marketing