The Fear of Amazon ALEXA
Today the modern company can work with Amazon, or work against it. Amazon’s breadth and influence are evident not only in its recently acquired position as world’s most valuable company, or the unprecedented personal fortune of founder and chief executive Jeff Bezos. Ignoring Amazon.com Inc. is no longer a viable option. The company — if company is even an adequate word to describe it — touches e-commerce, logistics, manufacturing, grocery, customer service, cloud services, hardware, robotics, artificial intelligence, the auto industry, the finance industry, real estate, health care, and fashion, among other things. The corners of the economy that Amazon has yet to reach get less and less every day. Whether Amazon is bad for competition is a matter for lawyers and regulators to decide. But the sheer volume of “Amazon” mentions by companies across industries and around the globe leaves little doubt of how powerful and pervasive Amazon is. Every company on some level fears an onslaught from the so-called Everything Store. Amazon’s ruthless efficiency, willingness to scrape by on thin margins, and unmitigated ambition make it the ultimate competitor. According to recent studies, the online retailer Amazon is becoming more and more dangerous for retailers in the Western world. The figures show that the giant has already achieved massive market dominance in some sectors. In the books sector, in particular, Amazon’s market power is almost complete, with the latest studies putting market power at seven out of ten possible points. Amazon also clearly dominates in electronics, household, and garden, toys or sports and leisure. Only in clothing, beauty products and food Amazon is still in pursuit, but overall every second euro, dollar or pound, yes, it´s a fact that around 50% that consumers in the USA, Great Britain, and Germany spend for online shopping ends up at Amazon.
Partner with the devil
But how about to partner with Amazon? Well, partnerships can be seen as a deal with the devil. This becomes really dangerous because Amazon sells for its own account but is also a platform for other retailers. And these retailers are becoming more and more dependent on Amazon, latest studies analyze. There is great potential to hinder free competition. Nike, for example, partnered with Amazon in June 2017 to sell products directly through its website after years of resistance. The deal gave Nike access to Amazon’s estimated 80 million US Prime members. Nike also got Amazon to commit to closer monitoring of third-party merchants selling Nike wares without permission, or even sometimes Nike counterfeits. But selling on Amazon also risked diluting Nike’s premium brand, especially if Amazon pressured it into uncharacteristic price cuts. Why am I thinking just now about a song from Joe Cocker? Maybe because its one of my favorite songs when he sings:
“Unchain my heart, Baby let me be, Unchain my heart, Cause you don’t care about me
You got me sewed up like a pillow case, But you let my love go to waist
Unchain my heart set me free” 😊
Since Amazon announced a couple of weeks ago that more than 100mil Alexa enabled devices have been sold, the fear of losing future competition is bigger than ever before. The German Minister of Economics, Peter Altmaier is angry about the German economy. He demands: “Before we are run over by Amazon’s voice assistant, we need our own Alexa.” Amazon is the world leader in voice assistants, Germany, and Europe are far behind. He demands a European counterpart to Alexa. For Minister Altmaier, Amazon’s voice assistant Alexa is a typical example of the backwardness of Germany as a technology location. “In one or two years, all devices will be able to be operated via voice control,” he said last Wednesday at an event on the subject of Smart Home. “Others are doing, we are just talking, although the technology behind artificial intelligence has even been developed by the German Research Center for Artificial Intelligence (DFKI)”. Amazon has given the AI systems for the home a real boost. Between 2016 and 2018, the use of digital language assistants in the USA increased from only one to 20 percent. Altmaier, therefore, considers Alexa to be “the greatest basic innovation since the invention of the steam engine.” The only question is what this will bring to the German and European economy. Altmaier’s employees told him about a competitor that could compete with Amazon’s product — but only after a “misplaced cough”. According to the Economics Minister, a counterpart has to be found quickly. “We can’t wait forever, we have to start now,” he demanded. Because with Alexa, “a lot is already different”, even German Banks are considering using Alexa for remittances. Maybe the Minister has listened to a song from Lenny Kravitz which goes like this:
“So many tears I’ve cried, So much pain inside
But baby it ain’t over ’til it’s over” 😊
It seems like it´s already too late, but it is not! Just, there is no time to lose because several examples show how fast Amazon conquers new business fields at such a speed, that it´s hard to believe that anyone is able to compete with them. Amazon buying Whole Foods was a game-changer in the grocery but also in real estate. The other went from Online to Offline within a couple of months. The $13.7 billion purchase was a clear sign that Amazon, a company known for its prowess online, intended to develop a physical presence. As of Dec. 31, 2017, Amazon leased 70 million m2 of space for offices, physical stores, fulfillment and data centers, and unspecified other uses. That included leases for 465 Whole Foods stores in North America and seven internationally that Amazon gained with its June purchase of Whole Foods. As of Dec. 31, Amazon also owned 4,5 million m2, most of which was used for Amazon Web Services or its international operations. That number almost certainly rose in 2018, with Amazon’s lease of the 120,000 m2 Expedia tower in Seattle, the expansion of its Amazon Go automated convenience stores and its planned lease of 300.000 m2 of office space in Long Island City. One of the most notable industries to experience a spike in Amazon chatter over the last 18 months was health care. Amazon popped up on the health-care sector’s radar in 2017 for its rumored interest in pharmacy and drug distribution. Amazon’s rumored interest in pharmacy was substantiated in June 2018 when it bought PillPack, a prescription-management startup, for a reported $1 billion. The acquisition instantly shaved $23.5 billion off the market capitalization of the biggest 10 health-care companies.
It is not surprising that more than 70% of the voice assistants who already work in households today come from Amazon and Google. According to the technology market analyst Canalys, the total number of such devices worldwide will increase from around 100 million at present to more than 500 million by 2022. Nearly three-quarters of them will be equipped with Amazons or Google’s technology, the industry experts estimate. Data protectors are concerned about these figures. As soon as the everyday assistants are activated by keyword (such as “Alexa” or “Ok Google”), they transfer unfiltered recordings including background noise into their respective cloud — centralized, often distant server structures with huge storage capacities. Users no longer know what happens to the data there.
This is now the moment where gigaaa AI Assistant comes in and it will be launched this year. It represents a real alternative to Google and Amazon, for companies and for consumers. We are working hard to convince more companies and organizations in Germany, Turkey, Egypt and Russia that gigaaa is not only technically a high level and full conversational platform but has already united strong partners with a large customer base and financial penetration. We are finding more and more supporting companies to participate in the upcoming market entry. The target date is the International Consumer Electronics Fair (IFA) in Berlin in mid-September 2019. In addition to a large number of gigaaa voice-enabled devices such as mirrors, alarm clocks and loudspeakers, which will be used to speak with gigaaa AI assistant, a wide range of useful and practical voice services will also be provided. In addition to the convenient control of Smart Home, music and video streaming will also be offered. Above all, however, the neutral position of gigaaa will come into its own when it comes to ordering products and services, and well-known retailers will be selected as desired suppliers. So, it will not be Amazon. Of course, the hot topic data protection stands above all, so that gigaaa offers the one and only alternative for customers who look at privacy with great importance. Yes, gigaaa should become the only voice assistant alternative with full transparency for data protection and privacy! Of course, I have got a song on my mind for this. 😊 It´s a song by Heavy D who sings:
“Now that we found love what are we gonna do, With it (With it)
Now that we found love what are we gonna do, With it”
Stay tuned the coming weeks to read more about latest developments and milestones how we prepare the market entry in 2019. Have a great time and see you next week.
“Life is gigaaa!”