I'd rather have 10% of a watermelon than 100% of a grape. A slice of the price of every purchase in almost any area of commerce adds up to an impressive bundle of bucks in no time-- especially once the underlying businesses begin to take off. Today, the truth is that you can't sell a stand-alone product; you also have to sell connection, support and service and deliver a first-class experience across all those dimensions. As a result, in the "right now" and "always on" economy, everything is, of necessity, transaction-based in one way or another. The only question is, who's getting a piece of the pie and how do you make sure that you get your share? Getting into that game is becoming harder and harder because so much of the process is data-dependent and only a few of the biggest players have access to the answers.
We're starting to see the emergence of large and well-funded gatekeepers and all kinds of other middlemen in almost every industry and everywhere you look on the web. The companies developing GPS-based mapping software are a great example. Google and Here (formerly part of Navteq/Nokia) have such a huge edge that the other players talking about creating their own global street and site maps sound seriously deluded. Coinbase jumped miles ahead of the rest of the pack in the cyber currency space and has already become a virtual utility and exchange for the industry. And these tech toll takers are here to stay because many of the markets and the disparate players they serve can't continue to grow and expand without the concentration, centralization and organization that these entities provide.
It's not exactly one-stop shopping yet, but, over and over again, technology channels tend to become two- or three-horse races or even "winner-take-all" configurations. Think about Apple and Android, Uber and Lyft, or even FedEx and UPS. You don't have to be the first; just eventually the best. And, to stay in the race and maintain your position, you also need to have the technology and, most importantly, the data that it increasingly takes to compete at these levels of size and scale.
The new gatekeepers are becoming some of the most valuable businesses on the planet, as we grow ever more connected and reliant on a few key channels to meet our basic and recurring needs. The people who own the pipes (the utilities) may be in decent financial shape, but the ones who are controlling the content and product flows and sitting astride the traffic in, out and through those pipes are much better positioned, further ahead of the game, and far more likely to be highly profitable.
Controlling, delivering and charging for access to the content or products is a lot more appealing than having to handle all the hardware maintenance headaches. Access trumps assets today. Poor AT&T and Comcast still have to pay attention to (and spend millions servicing and keeping up) all those POTS lines, cable boxes and telephone poles while digital content creators and e-commerce providers essentially ride their rails for free. Trump's not entirely wrong about how the e-commerce companies are taking advantage of the U.S. Postal Service, which still has to get all those deliveries over the last mile and into our mailrooms and mailboxes.
It's a good start to know who and where the customers are, but the ultimate giants will be the ones who can track, influence and ultimately dictate our actions, choices and decisions. Companies that can provide invaluable evaluations and interpretations of the vast amounts of user data that are being constantly and exponentially generated will become new market leaders. And you can bet that the best players won't share this data with the world - they will use it exclusively to improve and strengthen their own positions. This is where Amazon once again shines.
Amazon's dream state for its Prime customers is the complete elimination of thought in the purchase process. "One-click" is on the way to being "no clicks" at all. Think of this as "I see, I buy." I'm not even sure that needs or even desires will enter into this Pavlovian process of pre-conditioned responses for much longer. And, as for commodities and recurring purchases, life is going to be all about automated replenishment. The pantries of Prime subscribers will never be empty again.
But it's Amazon's newest foray into providing free samples to Prime customers on behalf of brands that highlights the beginning of these new data-driven initiatives. No one has more detailed information on every aspect of our past, present and intended purchase intent and behaviors than does Amazon. And no one can do a better job for their brand "partners" than Amazon of putting these offerings directly and painlessly into the hands and the homes of the very best, in-market prospects.
But every rose has its thorns and, in the case of Amazon, it's that (a) the brands hate giving up their direct connection and control of the end customer, which Amazon basically requires and (b) they hate the fact that Amazon keeps adding competitive house brands that are aggressively priced and bundled in ways that the brands can't replicate. And, to make things even worse, as Alexa approaches 150 million households, and voice becomes the key to commerce, it's hard to see how brand identities will even matter any longer to the buyers.
Not a happy prospect, but if you're looking for a way around the juggernaut, you might take a look at what Walmart's trying to do by buying a bunch of the niche names like Bonobos, Modcloth and Moosejaw and hoping that the selective and upscale customers will prefer and seek out these specialty offerings rather than the typical mass market and commoditized goods they associate with Amazon. Try to be sexy, not Sears.