How Businesses Thrive during Dangerous Times

The Covid-19 pandemic unleashed suffering on a global scale not seen in our lifetimes. As if waves of sicknesses and death were not bad enough, businesses everywhere were rocked to the core, resulting in job loss and economic hardship. And it’s not over. But amid the turmoil, some businesses are as strong or even stronger than they were before the pandemic changed everything. Here are their stories, and the lessons we may learn from them.

1 Take Care of Your People: Raising Cane’s Chicken Fingers Rallies through a Hard Times

Todd Graves saw the storm coming. Graves, the co-founder and CEO of fast-food chain Raising Caine’s Chicken Fingers, followed the spread of Covid-19 in China before the virus was news in the United States. He read about lockdowns happening to contain the virus. He quickly grasped the potential impact of Covid-19 on his business. So he and his management team went into crisis mode even though there was no crisis to react to yet.

The executive team canceled a scheduled management retreat to celebrate its five-year plan and started to change how the chain operated. Raising Caine’s quickly implemented CDC guidelines for social distancing and placed an “uber-intense focus” on sanitizing every location, as discussed in QSR magazine. Managers were trained on how to conduct team meetings in socially distanced fashioned so that operations would not be disrupted. Fortunately, most Raising Caine’s locations have drive-through service. So the company changed the focus of its marketing to put a full-court press on its enhanced safety measures and its drive-through service.

Almost all Raising Cane’s 500 locations stayed open and did a thriving business. Thirty-three non-drive-thru locations temporarily closed, but Graves kept employees in closed locations busy sewing masks and supplying local hospitals amid a mask shortage.

Raising Cane’s purchased sewing machines and supplies for the group. Two teams worked in shifts to comply with the company’s social distancing procedures. They created more than 600 masks in their first week and upped production to 100 a day. The mask sewing initiative gave employees in closed restaurants a sense of purpose as they gave back to the community. And beyond those efforts, Raising Cane’s launched fund raisers to help frontline workers in hospitals putting their lives on the line to fight the pandemic.

All the while, Graves refused to furlough or lay off any of the 23,000 workers.

“Our mantra then was no crew member left behind,” Graves told QSR. “I wanted the team that went into this pandemic to be the team we come out with. And so we’re going to work like heck to get through it.”

Initially, the chain suffered a hit as the pandemic upended our lives. Sales were down as much as 30 percent. But by late April, they had returned to pre-pandemic levels even as other restaurants struggled — a stunning turnaround.

This was a story we all needed to hear in the early days. Raising Cane’s gave us hope and put its people first.

2. Sense and Respond: Amazon, Target, and Walmart Ascend to Greater Heights

Some businesses prospered during the pandemic. You know three of their names: Amazon, Target, Walmart. All of them crushed their quarterly earnings announcements throughout 2020 and enjoyed all-time valuations on the stock market.

Why?

All three of them benefitted from the rise of the stay-at-home economy, in which people increasingly bought what they wanted from their sofas. Amazon already had a lock on ecommerce, and both Target and Walmart wielded an advantage with their curbside pick-up capabilities. People who preferred to order groceries, clothing, and housewares from their homes, then pick them up without leaving their cars, chose Target and Walmart. As a result:

  • Target’s curbside pickup service sales jumped by more than 700% during its fiscal second quarter.
  • Walmart’s eCommerce business jumped 97 percent year over year, partly because the popularity of curbside pick-up services.
  • Amazon just kept powering through, showing 37% year-over-year growth for the third quarter ended September 30, 2020.

Were they in the right place at the right time? No. They prospered because they know how to sense and respond.

Target and Walmart had been steadily building ecommerce services and curbside pickup over the past few years. They both saw the rise of a mobile consumer who preferred the immediacy of driving to the store but didn’t have time to go inside to make their purchase. When the pandemic made many people frightened to shop inside stores, curbside pickup served Target and Walmart well.

Amazon, building off its already strong ecommerce operation, had made a major investment in its own delivery capability, including its own air cargo fleet. The move triggered a war with FedEx and raised questions about whether Amazon had overreached. But as retailers struggle with maxed out supply chains in the 2020, Amazon seizing control of its own destiny now looks smart and forward-thinking.

In addition, by building out its cloud computing service, Amazon Web Services, Amazon positioned itself well when stay-at-home living in 2020 caused a surged in online usage. Amazon Web Services is the backbone for digital platforms ranging from Facebook to Netflix — a $10 billion business.

Amazon, Target, and Walmart aren’t standing still. Amazon continues to expand in to industries as diverse as advertising and healthcare — both leveraging Amazon’s ability to mine its own customer data to deliver personalized services and products. Target is doubling down on its in-store experience by opening Ulta beauty stores within a number of Target locations, anticipating a return to more in-store shopping in 2021. Walmart is also stepping up its own healthcare services and recently announced the launch of a fintech startup.

Leaders always think ahead — during good times and hard times.

3 Act with Purpose: Netflix Invests in Racial Justice

Netflix put its money where its mouth is.

As the world erupted with protest over racial inequality in 2020, businesses sought to have a voice. Many responded with gestures of support on social media. Others took action, and Netflix was one of them. In early June, Netflix CEO Reed Hastings announced that he was donating $120 million to support scholarships at Black colleges and universities. On June 30, Netflix announced it was allocating up to $100 million of its cash holdings into financial institutions and organizations that directly support Black communities in the United States. As reported in The New York Times, the action would help Black-owned lenders inject more capital into Black-owned businesses.

It turns out Netflix had been planning the capital reallocation since April. The New York Times reports that the company’s decision makers were influenced by book “The Color of Money: Black Banks and the Racial Wealth Gap,” by Mehrsa Baradaran, a law professor at the University of California, Irvine.

Netflix’s financial commitment reflects the company’s culture in other ways. For example, Netflix’s marketing arm Strong Black Lead, is committed to hiring people of color and supporting their voices. (Read more about Strong Black Lead here.)

Netflix’s actions point to a bigger role that businesses have to be purposeful, a major news theme of 2020. Corporate accountability to society really took hold as the Covid-19 pandemic spread. In March, According to a recent Kantar study of the public’s attitudes about COVID-19, more than three-quarters (77 percent) of people surveyed said they wanted to see brands talk about how they’re helpful in the new everyday life. And 77 percent wanted to see brands to inform consumers about their efforts to face the situation. Meanwhile 62 percent of people around the world surveyed by Edelman said that their country would not make it through this crisis without brands playing a critical role in addressing the challenges. Then, in June, the conversation turned toward race. An Edelman survey revealed a widespread public outcry for businesses to take a lead tackling racial inequality. Sixty percent of Americans surveyed by Edelman said that businesses must speak out publicly against racial injustice. Sixty percent said that brands need to use their marketing dollars to advocate for racial equality and to educate the public on the issue.

But businesses were not always sure how to take a stand. After Nike published an ad condemning racism, economist Scott Galloway took the company to task for over-emphasizing a message over taking action. He called on more businesses to focus on deeds, not words. Netflix was all about both words and actions.

4 Be Nimble: Airbnb Rebounds

Airbnb was on the brink of collapse. Under CEO Brian Chesky, the company had built one of the most storied brands in the digital age by creating a network of property owners willing to rent homes to travelers. Airbnb had become so successful that it was threatening the established lodging industry without owning a single hotel. It’s no exaggeration to say that Airbnb helped invent the modern-day sharing economy, in which people profit by sharing their assets for a fee. But Airbnb was like traditional lodging industry in one important aspect: Airbnb and its network of entrepreneurs needed people to travel and book lodging. And as the pandemic took hold, travel had practically ground to a halt. Overnight, bookings plunged. By mid-March, Airbnb saw $1.5 billion in bookings vanish.

Airbnb’s stellar trajectory was halted. A planned initial public offering was out of the question. Chesky laid off a quarter of his staff, slashed expenses, and sought capital to keep the business afloat. Things did not look good as the weeks went by. Even as people emerged from lockdowns, traveling was not popular.

Or was it?

In fact, Airbnb’s data scientists noticed something happening: people emerging from lockdowns were traveling. But their preferences had changed. Instead of looking to fly to cities and stay in tony urban locations — a mainstay of Airbnb’s revenue — travelers were looking to rent homes in smaller locations within 200 miles of their homes. People were ready to get out of their homes and travel. But they wanted to rent entire homes instead of sharing them with other people (and risk contracting the Covid-19 virus), and they wanted to drive, not fly. So as reported in The Wall Street Journal, the company quickly changed. Airbnb redesigned its website and app so that its algorithm would showcase travelers interesting locations such as cabins.

Incredibly enough, by July guests were booked stays at the rate they were just before the pandemic crushed the travel industry. By December, Airbnb had recovered so fully that it launched a successful IPO after all.

“People are now discovering small towns, small communities,” Chesky said. “They’re discovering national parks, falling in love with the outdoors, and realizing they can go to all sorts of other places. This is an irreversible trend.”

And Airbnb was ready to capitalize on that trend.

Airbnb needed to do a lot more than reposition itself to short term travelers in order to survive the tumult of 2020, but listening to its customer data and adapting were essential. In 2021, Airbnb says it appeals to a new type of traveler — people redefining their staycations, traveling in small pods of families and friends, or visiting different towns with an intent to relocate permanently. You can be sure Airbnb is adapting to them, too.

5 Be Bold: Disney Saves Its Future

It’s quite possible that “pivot” is the most overused word in 2020, used to any business that adapted during the pandemic. But Disney really did pivot its business, and may well have saved it.

It has been painful to watch the COVID-19 pandemic crush Disney’s fabled parks and resorts. In September, Disney announced it would lay off 28,000 employees across its parks, experiences and consumer products segments. Disney blamed prolonged closures and capacity limits at open parks for the layoffs.

On November 12, Disney reported its first annual loss in 40 years, and declining attendance at its parks had a lot to do with that decline. Disney said that the pandemic cost it $7.4 billion in operating income in the fiscal year, and $6.9 billion of that loss came from theme parks and experiences division.

But by November, Disney had already made a very important move to change course. On October 12, Disney reorganized its media and entertainment divisions in order to focus on streaming content, namely its wildly successful Disney+ platform. Kareem Daniel, the former president of consumer products, games and publishing, would now oversee the new media and entertainment distribution group, responsible for content distribution, ad sales, and Disney+.

In an announcement, Disney said that its “creative engines will focus on developing and producing original content for the Company’s streaming services” — meaning that Disney’s creative teams, ranging from Pixar to Lucasfilm, will be all-in to support streaming, focusing on Disney+, Hulu, and ESPN+, all streaming brands owned by Disney. Meanwhile, a newly created Media and Entertainment Distribution group under Daniel would be responsible for monetizing and distributing that content.

Disney didn’t wait for its restructuring to change the way it operates, either. In September, Disney bypassed movie theaters in the United States and released its feature film Mulan on Disney+ (while distributing the movie in theaters internationally). Mulan received mixed reviews and lackluster box office receipts globally. But as Kay McGuire of Screen Rant discussed in an analysis of Mulan’s financial results, Disney+ was a lifeline for Mulan.

And on December 25, Disney skipped theaters and released Pixar’s animated movie Soul on Disney+.

These were big-time moves, but they did not emerge from left field. In 2019, Disney had already laid the groundwork for its newfound focus on digital content — first, by taking ownership of the popular Hulu streaming service, and then by launching Disney+. Hulu gave Disney an instant streaming audience of 28 million (at the time) and a prestigious content library with popular titles including The Handmaid’s Tale. Disney+ gave Disney an arm to unleash its powerful library of content, including the coveted Marvel franchise, as well as new titles such as the wildly popular The Mandalorian, which tapped into the eternal appeal of Star Wars.

Little did Disney know that a global pandemic would trigger a massive shift in people’s entertainment options, from going to the movies to streaming them. By the end of the 2020, Disney+ subscribers had grown to 86.8 million, and Hulu paid subscribers had grown to 36.6 million.

And the financial results reflect the increase in subscribers. In its earnings announcement, Disney said that its Direct-to-Consumer and International division, which includes streaming, had generated $4.85 billion in revenue, up 41 percent year over year.

Disney knows where its near-term future is: streaming. And so it doubled down. And its stock value, incredibly enough, increased even as its theme parks continued to struggle.

Disney demonstrated an eternal truth about industry leaders: when times are tough, the make bold moves. Disney’s digital-content first approach was reflected elsewhere in the entertainment world, too, most notably when Warner Brothers said it would release its entire slate of movies on the HBO Max streaming platform as well as in movie theaters.

These are hard times. Businesses that want to survive them can learn from Disney.

Hope in 2021

Weeks into 2021, we see glimmers of hope for a sustained rebound from the ravages of the pandemic. The travel industry as a whole is showing some signs of life. The live events business, crushed by the pandemic, could return as early as the fall of 2021. Initial public offerings area actually booming. Much uncertainty and hardship remains. But new stories will be told and lessons learned. Stay tuned.

Photo by Jake Ingle on Unsplash

How the Intersect Music Festival Demonstrates the Risks of the Band/Brand Relationship

Many brands try to create enduring emotional ties with people by being culturally relevant. Cultural relevance is about connecting with an audience through their beliefs, interests, and behaviors. Forming marketing relatinships with musicians is a way for businesses to achieve cultural relevance. The deal works like this: the brand uses its muscle to give the musician exposure; and the musician lend a cool factor to the brand with a desired audience, such as Millennials and Gen Z. Hence, YouTube affiliates itself with the Coachella Music Festival, and Red Bull embraces music through content such as the Red Bull Music Festival, to name a few examples (of which there are legion). But cultural relevance is a two-edged sword, as the Amazon Web Service (AWS) Intersect music festival illustrates.

What Is Intersect?

Intersect — officially Intersect by AWS — will be held December 6–7 in Las Vegas. Yes, that’s right. AWSone of the world’s largest the largest cloud hosting providers, is putting on a music event. Here’s how the Intersect website describes it:

At the place where music, technology, and art converge, you’ll find Intersect, a new kind of festival coming to the Las Vegas Strip this December 6–7. Presented by AWS, the most broadly adopted cloud platform, and produced by Production Club, the team behind some of music’s most state-of-the-art live experiences, Intersect was born out of the massive after party for AWS’s annual re:Invent conference, held in Vegas since 2012, with over 25,000 guests last year alone. Now open to the public for the first time ever, the festival offers an inspiring two-day journey to culture and tech’s leading edge.

And the line-up sure looks compelling, with right kind of mix of headliners (Beck, Foo Fighters, and Kacey Musgraves) emerging, critically acclaimed voices such as Weyes Blood.

But there’s just one problem: many musicians are speaking out against the festival.

How No Music for ICE Crashed the Intersect Party

The launch of Intersect has galvanized more than 1,000 artists and industry types (as of this writing) to sign a petition pledging not to participate in Amazon-sponsored events. The boycott is known as No Music for ICE. What’s their beef with Amazon and AWS? Well, it turns out that the mighty AWS cloud hosts the software for Palantir, a data company holding $150 million in contracts with Immigration and Customs Enforcement (ICE). AWS also works with the Department of Homeland Security. Here’s what the petition says:

We pledge to not participate in Amazon-sponsored events, or engage in exclusive partnerships with Amazon in the future, until Amazon publicly commits to:

* Terminate existing contracts with military, law enforcement, and government agencies (ICE, CBP, ORR) that commit human rights abuses

* Stop providing Cloud services & tools to organizations (such as Palantir) that power the US government’s deportation machine

* End projects that encourage racial profiling and discrimination, such as Amazon’s facial recognition product

* Reject future engagements w/ aforementioned bad actors.

We will not allow Amazon to exploit our creativity to promote its brand while it enables attacks on immigrants, communities of color, workers, and local economies. We call on all artists who believe in basic rights and human dignity to join us.

In addition, two musicians originally scheduled to appear at Intersect, The Black Madonna and Japanese Breakfast, claimed they were not told of AWS’s affiliation with event. The Black Madonna raised such as stink on Twitter that she was released from her contract to perform. Her name no longer appears on the event’s website.

How No Music for ICE Reflects Changing Times

No Music for ICE illustrates the impact of changing times. In context of the fractured political climate and culture wars that grip the United States today, many musicians have embraced a social and political voice (a topic I blogged about here.) Their values reflect the surging Millennial and Gen Z populations, who are more likely to hold businesses accountable for their impact on society. In that context, AWS finds itself thrust into a conversation that the company most certainly does not want to be part of.

The Intersect boycott is especially significant because we’re talking about indie artists who could use the exposure, as opposed to a politically active musician such as Roger Waters, who can afford to pick and choose his venues. Fortunately for AWS, the headliners such as Kacey Musgrave have stayed out of the controversy. There is plenty of time for the issue to blow over (although there is also plenty of time for the protest to gain steam). AWS’s best bet is to keep the PR around the event focused on the big names and the up-and-coming acts on the bill who are committed to the event. Tell a narrative that focuses on their music.

The Lesson for Brands

The lesson for brands: tread very carefully when you make a play for cultural relevance through a relationship with an artist. You might get what you asked for, but not in the way you envisioned. Find artists who align with your brand (and, to be fair to AWS, it looks like the company has succeeded with the exception of Black Madonna and possibly Japanese Breakfast). And accept the baggage that comes with today’s climate of political and social consciousness in music.

Why the Next-Generation Google Assistant Could Be a Game Changer for Google

The business that monetizes the voice ecosystem will lead the voice-first economy. During Google’s I/O developer conference May 7-9, Google previewed a major development in its fight with Amazon to be that leader: the launch of a faster Google Assistant, described as “game changing” by Gartner Research Director Werner Goertz. A Google Assistant that responds more effectively to voice commands is certain to make Google a more appealing utility as people continue to use the voice interface to accomplish everyday tasks. And offering a utility remains Google’s chief strength as a brand. The only question is whether Google will move quickly enough to capitalize on its advantage by making the next-generation Google Assistant widely available.

Google Launches On-Device Speech Recognition

Google announced that Google Assistant, Google’s voice assistant, is getting faster with on-device machine learning. In other words, Google devices using Android will offer a voice interface directly through the device rather than rely on the cloud.

This news might have come as a surprise to people who assume that their conversations with voice assistants are managed on their devices solely. In reality, the software that manages Google Assistant actually resides on the cloud. Similarly, when you use the Apple Siri voice assistant on your iPhone, Apple relies on the cloudAnd so does Amazon when you use Amazon’s Alexa voice assistant on an Echo smart speaker. By moving the voice assistant software from the cloud to your phone, Google says Google Assistant will deliver answers to voice requests up to 10 times faster. According to Manuel Bronstein, Google’s vice president of product development, Google Assistant:

Running on-device, the next generation Assistant can process and understand your requests as you make them, and deliver the answers up to 10 times faster. You can multitask across apps—so creating a calendar invite, finding and sharing a photo with your friends, or dictating an email is faster than ever before. And with Continued Conversation, you can make several requests in a row without having to say “Hey Google” each time. 

He also wrote, “This breakthrough enabled us to create a next generation Assistant that processes speech on-device at nearly zero latency, with transcription that happens in real-time, even when you have no network connection.”

The next-generation Google Assistant will become available on Google Pixel phones later in 2019. Google has not yet announced its availability beyond the Pixel. Now that Google has taken the wraps off the improved product, Google needs to act quickly to make Google Assistant more widespread across the Android world while Google has first-mover advantage. 

Why a Faster Google Assistant Matters

Making voice faster and responsive is crucial for Google to be a leader. Years ago, Google became synonymous with the entire search category because the Google search engine offered (and still offers) a utility. Users could type commands and get useful, reasonably accurate answers quickly. Fast-forward to 2019. Google still dominate traditional search. But Google does not lead the voice-first experience as it does traditional search. For example, in the United States, Amazon owns 63 percent of the market for voice-activated smart speakers (although its share is declining). Globally, Amazon and Google are neck and neck in this category

Google has a strong motivation to overtake Amazon: the use of voice assistants is expected to triple from 2.5 billion digital voice assistants in use to 8 billion in 2023. With on-device voice:

Google Can Make Voice More Reliable

Google Assistant has been evaluated as being a more reliable assistant than Alexa based on accuracy of responses. By making Google Assistant faster, Google makes its voice technology even more reliable, thus building on its strength. At Google I/O, Google demonstrated vividly just how useful voice technology can be with the faster Google Assistant:

As Andy Boxall noted in Digital Trends, “Speed is everything, because with it comes convenience. Without it, there’s only frustration. You can reply to messages now using dictation, but you have to go through a series of steps first, and Assistant can’t always help. Using voice is faster, provided the software is accurate and responsive enough. Google Assistant 2.0 looks like it will achieve this goal, and using our phones for something more than only basic, often-repeated tasks may be about to become a quicker, less screen-intensive process.”

With speed and reliability comes trust. As consumers see just how useful voice can be, they’re going to move beyond the current state of using voice to do simple things such as check the weather and move on to more doing more complicated tasks such as making purchases — and businesses are eager for that day to come.

Google Can Make Voice a Better Mobile Experience

Google Assistant is available on one billion devices, up from 500 million in May 2018. Why? One big reason: mobile phones powered by Google’s Android operating system use Google Assistant by default. Android has acted as a Trojan horse to make Google Assistant live on mobile phones. As Manuel Bronstein told The Verge “The largest footprint right now is on phones. On Android devices, we have a very, very large footprint.” And here Amazon can’t touch Google, whose real rival is Apple for leadership of voice on mobile phones. 

Now, mobility means more than using our phones, as evidenced by Amazon, Apple, and Google fighting to embed their voice assistants in automobiles. To that end, at I/O, Google also introduced driving mode, which makes any Android-powered phone using Google Assistant more valuable for driving. As Google announced,

In the car, the Assistant offers a hands-free way to get things done while you’re on the road. Earlier this year we brought the Assistant to navigation in Google Maps, and in the next few weeks, you’ll be able to get help with the Assistant using your voice when you’re driving with Waze.

Today we’re previewing the next evolution of our mobile driving experience with the Assistant’s new driving mode. We want to make sure drivers are able to do everything they need with just voice, so we’ve designed a voice-forward dashboard that brings your most relevant activities—like navigation, messaging, calling and media—front and center. It includes suggestions tailored to you, so if you have a dinner reservation on your calendar, you’ll see directions to the restaurant. Or if you started a podcast at home, you can resume right where you left off from your car. If a call comes in, the Assistant will tell you who’s calling and ask if you want to answer, so you can pick up or decline with just your voice. Assistant’s driving mode will launch automatically when your phone is connected to your car’s bluetooth or just say, “Hey Google, let’s drive,” to get started. Driving mode will be available this summer on Android phones with the Google Assistant.

Now, consider how a faster Google Assistant could help you as you’re driving and using your voice as a device for wayfinding, making restaurant reservations, and communicating. It’s easy to see how faster replies matter even more when you’re driving, especially when you drive through an unfamiliar area or cities with complicated routes. 

Insanely Powerful, But Can’t Be Used

As noted, the faster Google Assistant will first launch on Google’s new Pixel phones, which are reportedly the fastest-growing smartphones in the United States. So far Google has not yet said when widespread availability beyond the Pixel will happen. But Google will need to make the faster on-device Google Assistant available on any Android-powered device to make a real difference. As Yahoo! News wryly noted in a recent headline, “New Google Assistant is insanely powerful, but can’t be used.”  It’s hard to believe Google would restrict an on-device Google Assistant to Pixel phones. Google cannot afford to do so. The opportunity is too great, and the stakes are too high, for Google to play conservatively.

The Prize

What’s the monetary pay-off for Google making Google Assistant smarter? As I noted earlier this year, being the backbone of voice protects the company’s online advertising business, which accounts for more than 70 percent of Google’s revenue. Google needs to keep giving people reasons to use products such as the Google search engine, Google Maps, and Google Chrome. That’s why in 2018, Google launched Google Duplex, an AI-powered bot that mimics the human voice to book reservations and perform other tasks with businesses. (Google Duplex was launched on Pixel phones and is now available on the web.) By keeping people on Google’s ecosystem, Google can continue to deliver audiences to advertisers and learn from audience behavior.

As Amazon’s own advertising products take flight, and with Amazon stealing consumer search traffic from Google, Google is under tremendous pressure to protect and extend its reach in the home and on the go. As we move toward a voice-first world, is Google moving quickly enough? 

Amazon Prime Video Seeks Cultural Relevance with All Voices Film Festival

Amazon Prime Video wants to empower diverse voices with a new film festival. On April 8, Prime Video began accepting entries for the first annual All Voices Film Festival. According to Prime Video, the All Voices Film Festival is designed to uplift underrepresented communities. Prime Video invites filmmakers to submit short (40-minute) films with the following requirement:

The writer, director, cast or theme of the short must reflect underrepresented communities. This includes but is not limited to people of color, ethnic, gender and religious minorities, members of the LGBTQI community, people with disabilities, veterans, young, aspiring filmmakers as well as older adults, and other groups that are underrepresented or marginalized in the US or globally. 

A panel of judges will select winning entries in July. Prizes range from a $25,000 royalty bonus and paid trip to visit Amazon Studios to a $10,000 royalty bonus. 

My take: the All Voices Film Festival is a smart move for Amazon Prime Video, Amazon’s streaming service. The festival, if curated well, should lend cultural relevance to Prime Video, a follower to Netflix and Hulu.

Amazon Prime Video Plays Catch-Up

Amazon Prime Video distributes both third-party and original content (the latter made by Amazon Studios). Amazon CEO Jeff Bezos has characterized video content as a stepping stone for creating more Prime members. As he once said, “We get to monetize [our subscription video] in a very unusual way. When we win a Golden Globe, it helps us sell more shoes. And it does that in a very direct way. Because if you look at Prime members, they buy more on Amazon than non-Prime members, and one of the reasons they do that is once they pay their annual fee, they’re looking around to see, ‘How can I get more value out of the program?’”

The problem is that being a stepping stone for selling more shoes detracts from the legitimacy of Prime Video. Prime Video has certainly distributed popular and prestigious content. But Prime Video doesn’t create buzz and shape mainstream cultural tastes as Netflix – and, to a lesser extent, Hulu – does. Netflix creates cultural relevance by shaping pop culture (see Stranger Things and its impact on 1980s nostalgia) and influencing behavior (as Tidying up with Marie Kondo has done by making so many people want to streamline their homes that resale shops are being overrun). 

A Step in the Right Direction

The All Voices Film Festival is a step in the right direction. Netflix has been building a reputation as a haven for New Hollywood visionaries who want to make personal movies that Old Hollywood won’t touch, an example being Alfonso Cuarón’s Roma. The All Voices Film Festival may give Amazon Prime Video the high ground for emerging talent. And its focus on under-represented voices – ranging from LGBTQi to veterans – taps into an important national conversation about diversity and inclusion that is much bigger than the movie industry. Being a source of content that connects at a topical level nationally is what cultural relevance looks like.

As Latasha Gillespie, Amazon Studios’ head of diversity, equity, and inclusion, told Variety, “At Amazon Studios, we are looking for passionate storytellers who reflect and represent all backgrounds, specifically so that we can share their experiences and stories. We created this opportunity because we wanted a way for underrepresented voices to be heard.” 

A Warning Shot Across the Bow

The All Voices Film Festival also represents another warning shot across the bow of Old Hollywood. Although Netflix gets credit for challenging Old Hollywood, Amazon Studios was actually the first streaming service to release a movie nominated for Best Picture at the Academy Awards (Manchester by the Sea). Its feature-length titles include Cold War, nominated for Best Foreign Language Film Oscar. Amazon Studios is also producing the anticipated Lord of the Rings television series. The All Voices Film Festival could give Amazon Studios the inside track to emerging talent and position Amazon Prime Video well against Netflix, too.

Everything now comes down to execution: developing potentially exciting new talent and using good marketing to promote it. Amazon has deep pockets. Money doesn’t buy you good judgment and cultural relevance. But Amazon Prime Video is off to a promising start.

When Voice Assistants Peddle Potato Chips

The Pringles brand is returning to Super Bowl LIII 2019 on Sunday, Feb. 3.

Now I know we’re really living a voice-first world.

Pringles has released three teasers for its Super Bowl LIII spot. The star of the ad will be a  — wait for it — voice assistant. At a time when advertisers are loading up on celebrities such as Chance the Rapper to hustle products, Pringles is relying on a faceless, Alexa-like voice assistant to sell us on the emotional power of Pringles flavors.

The ad, which will play during the second quarter of the Super Bowl February 3, will sell the viewer on the appeal of “flavor stacking,” or combining Pringles flavors in interesting and tasty stacks. The teasers depict an “emotional smart device” (in the words of a Pringles press release) that laments not being able to taste Pringles. In one teaser, the device sighs, “I cannot taste Pringles. I can only order them.” 

The ad will also supported by “a fully integrated marketing campaign including PR, digital, social media, e-commerce and product sampling.”

Whether a depressed voice assistant will inspire Super Bowl watchers to start stacking Buffalo Ranch, Wavy Applewood Smoked Cheddar, or Screamin’ Dill Pickle Pringles remains to be seen. But the fact that a well-known consumer packaged goods company would shell out $5 million (the approximate cost of a 30-second spot for Super Bowl LIII) for an ad that makes a joke involving a voice assistant shows just how rapidly the voice-first economy is evolving. 

Last year’s Super Bowl featured an ad using Amazon’s Alexa voice assistant, but the point of the ad was to playfully sell Alexa itself. Pringles is banking on the likelihood that people are so familiar with voice assistants that an ad can incorporate the voice metaphor to sell its own product. Here’s what the number say: According to Accenture, half of online consumers globally use digital voice assistants, up from 42 percent one year ago. Accenture also notes that smart speakers are among the fastest-adopted technologies in U.S. history. In the United States, most consumers are aware of Alexa even if they’ve not used it.

The risk, though, is that the joke becomes dated as technology evolves. But if the ad helps Pringles move product in the near term, perhaps it won’t matter. 

Now let’s see if an Alexa knock-off can get us to start stacking chips. 

Why Amazon and Google Are Fighting to Lead the Voice-First Economy

To no one’s surprise, the story of CES 2019 was the battle between Amazon and Google to lead the emerging voice-first world.

CES was awash with announcements about products such as alarm clocks and thermostats powered by Amazon’s Alexa virtual assistant and Google Assistant, prompting coverage such as CNET’s “Who Won CES 2019: Amazon or Google?” and USA Today’s “CES 2019: Google vs. Amazon, Who Won?

In the aftermath of CES, though, one question looms: What exactly do Amazon and Google get out of winning this battle?

Numbers Galore

Both Amazon and Google used CES to state the case for their leadership of voice (Apple, Microsoft, and Samsung, while certainly players, are not the leaders in voice although Apple is a strong challenger). Google announced that Google Assistant is on one billion devices, up from 500 million in May 2018 (a figure boosted by the sale of Android phones that contain Google Assistant by default). Amazon disclosed that it has sold more than 100 million devices that rely on its Alexa virtual assistant. In addition, the number of people who use Alexa every day — and who own more than one Amazon Echo smart speaker — doubled in 2018. 

Meanwhile, during CES, more telling numbers were disclosed. According to research conducted by Edison Research and NPR, 53 million adults in the United States (or two out of 10 Americans) own at least one voice-activated smart speaker. The number of smart speakers in homes has increased 78 percent year over year. And on January 8, Accenture reported that half of online consumers globally use digital voice assistants, up from 42 percent one year ago.

These figures don’t mean that people are actually using their voices to buy things from businesses. In fact, most people use voice assistants to perform everyday tasks such as listening to music and getting weather information. But the usage data is important nevertheless. It shows that even if we’re not exactly living in a voice-first world, we’re getting there – and doing so quickly considering that the Amazon Echo didn’t exist until 2014, and Google Home just two years later. In addition, by 2016, 20 percent of all Google mobile queries were voice searches.  

The rise of voice also helps explains why so many companies continue to launch products fueled by voice at CES, and 2019 was no exception.

Gadgets and Software Integrations

CES unleashed a dizzying array of products powered by voice, usually through Google Assistant or Amazon Alexa. These products typically focus on making it easier for people to use their voices to live in their homes and navigate their cars. For instance:

In the Home

Lenovo announced an alarm clock powered by Google Assistant. KitchenAid and GE rolled out smart displays that rely on Google Assistant to help you get recipes, watch videos, and do anything else to keep you occupied and entertained in the kitchen. Currant’s new smart wall outlet, which can be controlled by Alexa and Google Assistant, monitors energy usage and suggests which products to automatically turn off to conserve power. The Dalkin smart thermostat works with Alexa and Google Assistant to control the climate in your home.

You can learn more about major product announcements here and here. (For those of you keeping score, in November 2018, Recode reported that Google Assistant works with 10,000 smart home devices versus 20,000 for Alexa.)  But the most intriguing products, such as the Currant smart wall outlet, use artificial intelligence to not only act on your voice commands but also give you information and manage your home without your intervention.

On the Go

Both Amazon and Google showed that Alexa and Google Assistant are powering our lives on the go, too. Google formally integrated Google Maps with Google Assistant, which is important because of Google Maps’s popularity for mobile wayfinding. As Mashable noted, “Google envisions users asking it for directions home, or to nearby restaurants and saved locations. You can ask the assistant to search for places along your route (like gas stations) or add a stop — all things that used to require some button pushing.”

Amazon announced a stronger push into voice-powered automobiles. CES was barely under way when Amazon and Telenav, a provider of connected car and location-based services, announced a relationship that makes it possible for drivers to use the Telenav Alexa-powered navigation system to do the same kinds of functional tasks that they can do with Google Maps. And then Amazon formally launched Amazon Echo smart speaker for the car. Google announced a similar product through a relationship with Anker’s Roav automotive accessory, which is essentially a Google Home for the car.

These announcements continued a battle for on-the-go voice experiences that has been going on for some with Google, Apple, and Amazon all rapidly launching products and software designed to be the de facto infotainment systems for different car manufacturers. The irony is that major auto makers have been announcing dips in sales for 2018. But overall, automotive has been a strong industry over the past several years. And now cars are getting smarter.

What Do They Want?

No wonder so many “Google versus Amazon” stories have proliferated throughout January. But the more important question than who “won” CES is what do Amazon and Google get out of all these voice-powered products? The answer is simple:

  The company that owns the ecosystem monetizes the voice-first world.

Owning the ecosystem yields practical benefits, such as revenue gained from the sale of smart speakers. Amazon commands a strong leadership of smart speakers, but Google is catching up. As of 2019, Amazon is capturing 63.3 percent of the smart speaker market, with Google Home accounting for 31 percent. The numbers matter for another reason besides revenue: smart speakers connect people with other smart devices, thus acting as a gateway for product integrations. As Accenture noted in its survey of global smart assistant users, “[n]inety-three percent of consumers globally expect their home device purchases, such as smart TVs or computers, to be based on ease of integration with their standalone smart speaker.”

Google’s Motivation

For Google, being the backbone of voice protects the company’s online advertising business, which accounts for more than 70 percent of Google’s revenue.  Google needs to keep giving people reasons to keep using products such as the Google search engine, Google Maps, and the Google Chrome web browser. As people stay on Google, Google can continue to deliver audiences to advertisers and learn from audience behavior. As people use voice, Google can keep them on Google by incorporating voice into its products, launching new products such as Google Home, and making Google Assistant part of other companies’ products, which is the alarm clocks, thermostats, and cars using Google Assistant come into play. 

But it’s not all about advertising for Google. Google also wants intelligent voice assistants to make Google software and hardware (such as Pixel phones) more useful and popular, a dramatic example being Google’s Duplex software, which can make convincing phone calls on behalf of human beings.  

What Amazon Wants

Amazon has its own motivations. Amazon is already a popular search engine for product searches, with half of online shoppers starting their searches on Amazon. Amazon also needs to incorporate voice to keep those shoppers using Amazon as they become more comfortable using voice – not just because Amazon wants them to buy things from Amazon with their voices, but also because Amazon is building an online advertising business that is already the third largest in the industry, behind Google and Facebook

As Amazon creates its own advertising business, it, too, needs to show potential advertisers that it can deliver an audience to them – in the home and on the go, whether they use their voices or text to get what they need. In 2018, it was reported that Amazon was in talks with advertising giants such as Procter & Gamble to permit them to advertise on Amazon Echo speakers. Amazon has denied that it’s going to permit advertising through Alexa. But even if Amazon does not offer ads, per se, it can use voice to mine valuable data about its customers that would be useful to its advertisers, such as Google can.

Amazon is already working with businesses to monetize skills. Through premium content known as in-skill products that reside within Alexa skills, businesses can sell premium content such as in-game currency. For example, Stoked Skill offers free games such as Escape the Room and Escape the Airplane. The games are set up as Alexa skills. Players use Alexa skills to find clues that will help them escape spaces such as jell cells and cars. Customers can pay for optional “hint” packs (in in-skill product) that make it easier for them to escape. 

I could see Amazon also offering branded content and products to Prime customers who use Echo, such as discounts at local restaurants unlocked exclusively through Amazon Echo Auto. Doing so would monetize voice without more intrusive advertising that lack any useful offers.

Finally, Amazon has other plans to monetize voice in the enterprise, such as Alexa for Business to help enterprises use Alexa to improve workforce productivity. As these examples show, companies are using Alexa for Business to book conference rooms, manage the connection status of shared devices, and other workplace tasks. But Amazon has competition in the enterprise most notably from Apple and Microsoft.

What Business Should Do

Brands have a clear mandate: prepare for a voice-first world, and one where Amazon and Google call the shots for now. When consumers start really buying products and services via voice assistants, brands will need to play ball with the companies that control the voice ecosystem. Here is how Recode envisions one way that world will play out:

How it works now: If you ask Amazon’s Alexa or Google Assistant to buy, say, shampoo, they’ll surface what they think you’ll want. Alexa uses several criteria to suggest a purchase option: Your order history, whether a product is eligible for free Prime shipping and whether the product has the “Amazon’s Choice” seal of approval — “highly rated, well-priced products available to ship immediately.”

Google picks products from merchants thatare most relevant to the query. It also considers purchase history and information about user preferences, as well as an item’s availability and proximity.

Both companies say there is no favoring of specific retailers — or their own products.

Brands also can’t pay for visibility — yet. For now, Amazon and Google are trying to build trust among new — few — voice buyers by making their search results as relevant as possible. It doesn’t, however, take much imagination to see a future in which Amazon or Google merchants could pay to have their products suggested by their smart assistants — like sponsored ads that crowd their websites — as a way to generate more ad dollars.

Today, businesses are participating by creating sometimes clever and inventive voice-based brand building experiences, such as HBO’s voice-activated Westworld game, in which people use Alexa to explore the mythical Westworld. Other businesses have created their own branded Alexa skills. With Tide’s Stain Remover skill, you can get stain removal instructions shared with you through Alexa. Campbell’s offers recipes through Campbell’s Kitchen. Presumably, these businesses could offer in-skill products if they wanted to, an example being HBO offering a premium-tier Westworld game for purchase. And businesses are optimizing their content to be found through voice search. 

Amazon and Google are not the only companies doing the heavy lifting, but they are leading the way to a voice-first world. Smart companies are going with them. 

Walmart Promotes a Kinder Black Friday – and a Possible Future for Retail

After treating Black Friday like a cattle round-up for years, Walmart is finally injecting a little humanity into the year’s worst shopping tradition. On November 8, the retailer announced measures intended to make Black Friday shopping just a bit more pleasant:

  • Walmart is serving four million cups of complimentary coffee (courtesy of Keurig) and a few million free Christmas cookies from the Walmart Bakery.
  • Walmart will make it easier for shoppers to find top deals in-store via the Walmart app.
  • Check Out with Me store associates stationed throughout the stores and equipped with mobile check-out devices will make it possible for shoppers to purchase items on the spot, thus avoiding long lines.

These changes are long overdue. But why aren’t more retailers improving the Black Friday experience? For years, as part of my first-hand research into Black Friday, I’ve stood in long lines with shoppers in the cold pre-dawn of this massive shopping day. I have waited Continue reading

How Netflix Is Changing Your Behavior

Being a Netflix investor (which I am) is not for the faint of heart. Within the space of a few days recently, Netflix stock reached an all-time high, then fell off a cliff after Netflix reported disappointing quarterly earnings, only to rebound in stunning fashion the following day, before dipping the day after. The wildly gyrating stock price certainly makes for dramatic headlines. But the real legacy of the company is not its market capitalization but its ability to change human behavior.

Netflix CEO Reed Hastings is a market maker. Market makers do more than make money. They shape behaviors of people and companies. Netflix is undeniably shaping how people live going back to its founding in 1997. Along with Amazon, Netflix ushered in the era of on-demand living. If Amazon made it possible for people to buy things on their own terms, Netflix did the same for entertainment. Arguably Netflix and Amazon laid the groundwork for Uber’s disruption of the transportation industry through on-demand ride sharing. Together these companies ushered in an economy based on on-demand living.

A Cultural Phenomenon

The idea of giving viewers a digital catalog of movies to stream not only knocked Blockbuster out of business but made Netflix a cultural phenomenon as viewers embraced a new way of experiencing entertainment on demand. In 2009, Twitter users began using the phrase “Netflix and Chill” to describe the increasingly popular practice of simply hanging out with Netflix like a friend. Soon, “Netflix and Chill” became a euphemism for people hooking up to have sex, which is how we commonly think of the phrase today. The phrase “Netflix and Chill” became an internet meme and topic of much analysis and controversy. Netflix was shaping how we communicate as Google has done (“I’ll Google the movie time”). Continue reading

Shareable Custom Alexa Skills Bring Us Closer to a Voice-First Future

Amazon continues to create a voice-first future.

In April, Amazon launched Alexa Skill Blueprints, which makes it possible for anyone to create their own Alexa skills and responses, with no coding required. And now Amazon has made Alexa Skill Blueprints shareable through channels such as Facebook, text, Twitter, and messaging apps.

With Alexa Skill Blueprints, voice becomes a source of user-generated content, such as creating skills that help the babysitter find things in your home or skills that help you learn new subjects through your own voice-based flash cards, among many other potential uses. Here’s an example of how to create your own family trivia game:

Empowering people to create their own Alexa skills without any coding experience is important to Amazon’s vision for making voice the connective tissue of commerce and everyday living. Alexa fuels an entire voice-based commercial ecosystem that includes, for example:

  • The use of Echo smart speakers to manage our smart homes, listen to music (preferably by streaming Amazon Music), and order products and services. Echo is Alexa’s primary vessel, enjoying a commanding 70 percent marketshare.

For Amazon to achieve its vision, consumers have to become comfortable using their voices to accomplish tasks that we’re accustomed to doing with our fingertips. So far, Continue reading

Voice Looms Large for Apple and Mary Meeker

Apple and Mary Meeker agree: we’re living in an increasingly voice-first world. But how well is Apple adapting?

On May 30, Kleiner Perkins venture capitalist Mary Meeker, one of the most influential pundits in digital, released her annual Internet Trends report. The uptake of voice-based digital interfaces was a significant theme. She identified voice as one of nine areas where innovation and growth are occurring as U.S. internet usage continues to growth.

“With voice, we’ve hit technology liftoff with word accuracy and we’ve certainly hit product liftoff with Amazon Echo’s install base estimated to be around 30 million plus,” she said, as she presented her report at the 2018 Code Conference. And she presented slides to illustrate her point.

It’s worth noting that in her 2016 report, she quoted Andrew NG, chief scientist at Baidu, who said, “As speech recognition accuracy goes from say 95% to 99%, all of us in the room will go from barely using it today to using it all the time. Most people underestimate the difference between 95% and 99% accuracy – 99% is a game changer . . . “

According to Meeker’s 2018 report, we’ve now approaching that point where accuracy rates will trigger widespread adoption.

As Meeker noted, sales of the Amazon Echo have been phenomenal – an example of a technology company identifying a need that people did not know they had.  And the Echo is an important, but not the only, barometer of voice’s uptake. Businesses such as Amazon, Continue reading