A decade ago, if you were asked what companies are at the forefront of driving the economy, you wouldn’t find many lists that didn’t include the likes of Microsoft, Walmart, IBM, Dell and a few others. But if you ask that question now, you may be surprised if any of them show up. That’s the nature of how much the world has changed, and how much we expect to change going forward.
Lori Schafer, Executive Advisor for SAS Institute’s Retail Practice and Co-Author of “Branded! How Retailers Engage Consumers with Social Media and Mobility,” joins Brent Leary to share her unique perspective on why today’s Tech Titans – Amazon, Apple, Ebay, Facebook and Google – are now the ones we all need to watch.
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Small Business Trends: Can you talk a little bit about the Five Titans, and why you selected them?
Lori Schafer: Sure, I’ll say researching and writing about what I refer to as the tech titans – Amazon, Apple, eBay, Facebook and Google – I believe they are literally out to transform every company and many of us in the world. They already have, and they will continue to, have a significant impact on the overall economy.
It’s not to say that there aren’t other large companies, especially in the technology world, but your voice lowers now when you think about the discussions around the likes of IBM, Hewlett Packard, Oracle. A few years back they were in the news and changing the way people act and think. Not only in business but in their daily lives. Now it is really the five titans that I discussed.
On top of that when you take a look at the amount of their market cap combined, which is around a trillion dollars between the five of them, that really shows the future potential of these companies. You look at their cash positions which is more about what they are able to do today, which is about six times that of the top five retailers.
But the point is that they not only have that kind of future, but current ability to continue to innovate because they have that much cash on hand.
Small Business Trends: Why do you think that these companies have had such a disrupted effect on the economy?
Lori Schafer: I think that’s because of the combination of mobile and social media in the last five years.
I remember many times in retail hearing ‘is mobile really going to happen, is it really going to be any change?’ People laughed at it because of so many false starts, but part of the challenge was that the mobile phone, prior to Apple inventing and revolutionizing the smart phone, just wasn’t that friendly.
Then social media has completely changed the way people communicate with one another on the Internet. I would have to give a lot of credit to both Apple for revolutionizing mobile and to Facebook for revolutionizing the face of social media.
Small Business Trends: When did you see Amazon getting beyond the retail space and being viewed as one of the technology titans?
Lori Schafer: I had an analytics company in retail that we ended up selling to SAS, and Amazon approached us and wanted to buy our solution.
I think from day one, they were relentless on customer satisfaction. But the other thing was relentlessness on analytics. I mean from the very get go they were putting recommendations together when other companies didn’t even know whether or not they ought to have a website.
Small Business Trends: Can we look at the five titans, because they are starting to get into each other’s sweet spot? Let’s talk about it from a mobile prospective.
Lori Schafer: I guess it depends on how you look at mobile. Do you mean mobile in the sense of advertising or do you mean mobile in the sense of hardware?
I look at Apple or Google in the sense of an operating system. Do you look at mobile in the sense of ability to sell? Because when I look at mobile it is a big word.
Small Business Trends: When I think of the desktop, and going to do a search or going to buy something, people go right to Amazon. Do they have that effect on the mobile device?
Lori Schafer: I don’t have the statistics on this one so let me say that up front. I will say for me they do. Because I have the Amazon app on my mobile phone and I do have statistics on the fact that more people search for products on Amazon than they do on Google. That is where a lot of the advertising dollars are. I just wanted to point that fact out because that is very eye opening.
When I look at Amazon, they are ultimately out to make money. They are not making money on the hardware at all, and they are not even breaking even from what I understand on the hardware. Their whole idea is to just make it convenient to shop Amazon because you just press one button and you are in Amazon.
My own opinion is, for what they are trying to be – they are already there.
Small Business Trends: Out of the five titans, would you say that when it comes to mobile commerce, is Amazon in a better position than eBay or Apple?
Lori Schafer: Ebay is pretty darn good at mobile commerce. Apple doesn’t have the percentage of SKU’S Amazon has. I think it is much easier to shop Amazon than it is Apple. Apple has a great app, they have a fantastic ability to buy online, pickup in the store 12 minutes later, all of that. Those things are great, don’t get me wrong. But I think that Amazon is miles ahead.
Ebay is big in the marketplace game – as is Google now. And eBay has really picked up stride in the last 18 months. Their application on a mobile device is very good – second to none in the sense that their mobile revenue is higher than anybody’s. And there’s the idea of PayPal, which makes it even higher.
In summary, more people know about Amazon. I would have to put Amazon ahead of eBay, simply around customer accounts.
Small Business Trends: Let’s talk a little bit about social commerce. Maybe Amazon vs. Facebook or Google? Where do they stack?
Lori Schafer: In the broader sense of the word, where there is chatting with friends and sharing and so forth, Amazon is right up there. Because the one thing Amazon did was introduce transparency to the whole retail game.
Retailers were never transparent. You know the whole ratings and reviews. Amazon was first to do that and that was unheard of. Most retailers panicked, because especially in a social context, ratings and reviews is social media.
Companies like FAB do all of their sales by putting them on Facebook as the deal of the day. Facebook drove 25% of all of FAB’s holiday sales and that was about two years ago. I didn’t get the latest statistic, but from that standpoint, Facebook does very well.
Google is trying to tie everything to your search rankings, which makes everybody want to go onto Google Plus. I would have to put Amazon and Facebook as the two leaders.
Small Business Trends: Do you see any of the other titans playing in so many different industries and potentially dominating them, like Amazon?
Lori Schafer: I do see, in terms of the quantity in industries, Google. Advertising obviously, mobile in so many ways; operating systems, mobile advertising, mobile phones; they have invented GEO location from that standpoint. They are now in the marketplaces for shopping, certainly in digital media with the whole living room effect, and the idea of Goggle TV and Goggle Fiber, they are trying to displace cable companies and phone companies. They are ripe for disruption and Goggle is going head on, as is Apple.
But I think Google is making more of a statement and trying to displace those companies.
Small Business Trends: Do you see any of the titans being able to take on the other titans that are already dominating and winning?
Lori Schafer: Yes. Clearly Facebook is taking on Google in advertising in a big way, and Google has to be on its toes all of sudden because social advertising is becoming very big. Also Facebook, with its capability, is able to pinpoint down to individuals and micro advertising well beyond what Google currently is able to do. So when I look at that example, and Facebook and Google that depend on advertising dollars for revenue, all of a sudden Google has competition there.
I would say that Google is giving Apple a run for its money. There are certainly more Android phones out there, and Google does not make any money on those, they give Androids away. Apple obviously makes a ton of money on hardware, but Google has quality on the phones. I think Apple has to stay as innovative as they have been or they risk losing market share.
I think eBay is trying to position themselves as friends to the other retail owners and helping other retails to compete and stay longer. They are investing heavily in technology to allow retailers to become more competitive with Amazon.
I think this whole idea of the mobile wall, everybody is thinking Google Wallet. You know, some of the others, obviously eBay, are just creaming everybody. They need to have more deals going on now with PayPal. And PayPal has thousands of retail outlets in the US at the point-of-sale checkout. Home Depot is the first of a lot and of many others that will roll it out.
You think about Apple as being a mobile pay wall. But iTunes has 400 million plus customers. And all of the retailers and banks and institutions that have a business to consumer presence in brick and mortar, are realizing they have to go to a mobile point of sell because:
- Big checkout counters are costly and expensive.
- It is very impersonal.
- They have to have their sales associates more educated to assist the consumers who are on their mobile devices looking up things.
I think that in every case there the answer is yes, among those five.
I really don’t see anybody else I am aware of today that could take them on. At least for the foreseeable future. I joke about it, but I think it is true. If somebody will take them on, it is going to be a group of kids in a Silicon Valley garage or something. It is not going to be one of the companies out there that we know today.
This interview on tech titans is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.
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Brent: I look forward to listen to your interview with Lori Shafer. I have to use Soundcloud’s app in order to listen to it. It looks like the Downcast is picking up your feed in the correct way.
Have you read Phil Simon’s book, The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business?
Yes Phil and had a good conversation almost two years ago after his book came out. You can check it out here:
My conversation with Lori added some different perspectives. As you will see with my convo with Phil, we focused a bit more on platforms from a indivdual perspective. And with Lori we looked more at the “big picture” perspective. So together these two conversations really provide some great insights and ideas. And because I’m writing a book on Amazon’s impact on vendor-customer engagement, they help me even more! 🙂