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🍲 Amazon scaling food | 💬 💰 cheating social media

Happy Father's Day to all the dads out there :) This week I look more closely at the Amazon/Whole Foo
🍲 Amazon scaling food | 💬 💰 cheating social media
By Connected Paths (Riaz Kanani) • Issue #22 • View online
Happy Father’s Day to all the dads out there :)
This week I look more closely at the Amazon/Whole Foods acquisition and then jump to social media and its dirty underbelly.
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Co-founder, Radiate B2B

Alexa: order me some fresh food please.
The big news of the week was Amazon flexing its financial muscles and acquiring Whole Foods for a mere $13.7bn. 10x larger than any other deal they have done.
Whole Foods is an upmarket grocery store with 431 stores US-wide. It does also have a small presence in the UK with 9 stores, mostly in London. 20% of its revenue also comes from meals and it has a similar 1 hour delivery service to Amazon.
The stock market saw amazing industry-wide movement when the deal was announced with even Walmart dropping in share price. Clearly investors felt this wasn’t just about upmarket groceries.
Amazon have been looking at this industry for years. They have sniffed around Ocado here in the UK and as recently as September last year looked at opening up its own grocery stores in the US. Known as Project Como it mostly small and focused on delivery/pick ups. 
Groceries is a low margin and tough business though - Amazon themselves have failed to scale it in recent years profitably so was this an acceleration of Project Como? Some analysts think that this alone would cover the amount paid. 
Maybe this ties in with Amazon’s strategy of having a greater physical presence - they recently opened a physical book store as well. What worries me though was the lack of anything breakthrough in the experience.
I’m certainly not convinced Amazon spent the money primarily for an upmarket grocery, much more likely would be the distribution network that allows them to scale their perishable food business. 
There could be an impact here in the UK as well. One of the best distribution networks for groceries belongs to Ocado. They currently have a deal with Morrisons to deliver groceries here in the UK. Will Morrisons step in and acquire Ocado before Amazon does or will Amazon go it alone?
Would you bet against Jeff Bezos? For a deeper look at why Amazon bought Whole Foods, you can read more here and to get the various analysts viewpoints on the deal go here
Starving your ego
One of the early games of social media was to boost your followers and likes on Facebook and Twitter. Clearly there was some importance to doing this as it increased how far you could spread your message inside the network. There was also a greater likelihood of more people interacting with your content which in turn would spread your message thanks to the algorithms behind the scenes that decide what to show to who, when.
It may seem obvious, but when you focus on such a vanity metric, the real metric (how many real people saw the message from a branding perspective or went out and took some action (the direct response metric) can often be forgotten. Let alone the ultimate metric of generating revenue.
And of course that is what happened.
Cue: the rise of the bot. A fake account which boosts likes, comments, follows etc.
Estimates last month suggest half of Trump’s Twitter followers as fake. He isn’t doing too badly anyhow with 15m real followers but interestingly as time passes the percentage of fake accounts is increasing rather than decreasing.
Now you would think that the social networks would be keen to remove all these fake accounts - they are not difficult to identify and there are numerous free services that allow you as a Twitter user to identify and remove them. For Twitter though, it seems to suit them to have increased numbers “using” the network. Facebook and Instagram have gone through very public rounds of deleting fake accounts. Possibly Twitter is doing the same just very badly 😉
Instagram has had its own fair share of bots and it has propagated thanks to platforms like Instagress. You paid Instagress to add followers based on your interests (hashtags). The platform then followed those hashtags and looked for people to follow. Bots of course followed back (and placed fake comments like “stunning photo”) and so the “best” accounts to follow became those bots.
Today when you look at many Instagram accounts with large numbers of followers, a quick look at their posts will see plenty of likes but very little real interaction other than the “amazing photo” type comment. 
It definitely played to your ego and at scale (and speed) defeated Instagram’s new algorithm launched in 2016, where your newsfeed changed from showing posts based on recency to posts it thought you would want to see. The posts who quickly garnered likes and comments would be promoted up in your feed. It also gave accounts a sheen of respectability - if an account has that many followers, it must be good (really? 🤦). That is a problem for Instagram over time.
Instagram obviously has been improving its algorithms to stop this gaming but now it is going after the platforms that allow you to buy followers. They recently shut down Instagress and many of its peers to much chagrin from some Instagram users. 
With the amount of money involved though (users with 1m+ followers can charge £3,000 a post for example), this hasn’t stopped everyone. Some users have clubbed together in private groups in Whatsapp to schedule posts at a specific time and then they all like and cross post and comment at once. Again gaming the system. It is a game of whack-a-mole and one that will only get harder over time. 
Removing the manipulators can only be a good thing for the network and marketers overall though. There are plenty of ways to build an amazing community within Instagram and at least for now, it is harder to buy followers.

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Connected Paths (Riaz Kanani)

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