A lot of people are claiming victory for having succesfully predicted Amazon's acquisition of Whole Foods but few were as clear about this scenario and the underlying drivers (in advance of the announcement) as the L2 founder and New York University professor Scott Galloway.
His interview on how how tech giants are disrupting retail, jobs, advertising and more is one of the most insightful commentaries on what's happening to retail:
Google is God, Facebook is love and Amazon will be worth $1 trillion (Scott Galloway, founder, L2)
Some favourite quotes:
- I can’t imagine why they wouldn’t buy Whole Foods, for example, just because of the urban locations. They could close them down and just turn them into warehouses and I think they could justify the price.
- I think the only thing in the way of Amazon right now is a governor or district attorney wakes up in the morning, looks in the mirror and says, “Hello, Mr Governor,” and thinks that the clearest blue-line path to the gubernatorial mansion is to go after Amazon; or somebody in Brussels or D.C.
- Then we’ll say, okay, it makes user-generated content on the product page, seems to be resulting in increased conversions so we’ll say that is a good thing.
- What you have is you no longer need to immediately defer to the shorthand of brand, and the number of people who can name their favorite brand across luxury, across hotels, across retail, has declined 20 or 30 percent just in the last five years because people now have the ability to find unique and special, and disposable high-margin income wants special and it wants new. It used to want Dannon, then it wants Yoplait, then it wants Chobani, now it wants some special kefir yogurt that they say Beyonce likes that is curdled in Brooklyn.
- The long tail has new life, that’s the good news in consumer. In technology, it’s the short tail, fewer and fewer players. In consumer, in the world of beauty and the world of food, the long tail has new life, but brand is eroding in terms of importance. The algorithm for value post-World War II was the following: An average shoe, an average soda, and then wrap it in these outstanding brand associations to feel more American, feel hotter if you drink this beer, feel more elegant in your appearance ...
- All of these companies are effectively operating systems. Amazon’s an operating system for consumption; Google, operating system for information; Apple, media; Facebook, operating system for what I’ll call our connections. Netflix could be the operating system for joy in our lives. Millennials are spending more time on Netflix than all of cable TV combined, so arguably Netflix is worth more if you believe millennials are the future in terms of disposable income and their sheer size, then Netflix should be worth more than every cable and media company on television combined.
We've followed Scott closely for years given the previous relationship between Olapic, Unilever and L2.
When asked by Kara what he thinks is the greatest unsung brand right now, Scott's first thought was Canada!
We couldn't agree more :)
$AMZN is running through @profgalloway's list fast -> Prime Wardrobe lets you try on, return clothes free https://t.co/yqZssfq0lC #ecommerce
— Candid (@candid) June 22, 2017
[Update: June 20, 2017]
Ben Thomson has a great piece out on Amazon's approach to becoming the "Operating System of Consumption": https://stratechery.com/2017/amazons-new-customer/
