The Strategist

Apple and Facebook Are In Galloway’s Good Books As Winners While Amazon And Google Suffer In Bad Books As Losers

04/11/2015 - 14:57

Steve Denning speculates over Galloway’s predictions of four major company’s future trends which the latter concluded from his algorithmic calculations. – 10 April 2015 – Forbes’ contributor, Steve Denning, reflects on the presentation of NYU Stern’s clinical professor of Marketing and the C.E.O cum founder of a “business intelligence firm” L2, Scott Galloway wherein the subject matter revolved around “The Four Horsemen of the digital economy” being “Amazon, Apple, Facebook and Google”.
Galloway along with his team developed an algorithm which enables him to sort almost eight hundred data in four fields including mobile, social, site, and digital marketing, in eleven geographic locations. Using the said algorithm, he has come up with the concept of “losers and winners” in the corporate market. He declared to winners and two losers according to his reading, the former being Facebook and Apple while the latter being Google and Amazon.
As per his predictions the winners are likely to “increase in influence and value” whereas the losers may decrease in the same way. His studies are relative, therefore his losers, even though may “lose for the next ten years”, they could still remain important in the market for nevertheless these are all “amazing companies.”
Describing Apple as Galloway’s winner, Steve Denning writes:
“It (Apple) is dominant both on-line and in stores. It’s vertical and global. Its future is strong in part because it is becoming a global luxury brand... Apple has all the elements to make a luxury brand work: craftsmanship, an iconic founder, exceptional price point, expanding margins, vertical control of distribution, and globally recognizable. It’s on the way to becoming the world’s largest luxury brand.”
In Galloway’s words”
“There are three things we do in business. Help people survive (head). Help the ability to love (heart). Help your desire to bear offspring (propagation). As you move down the torso, the margins get better and the business gets better. Luxury is in the business of propagation.”
According to Galloway, Apple seems to master in the concept luxury propagation in business.
Facebook, being Gallowya’s second winner, proves to be the platform for all ages wherein they can spend their time. As per him, the news about Facebook’s dropping demand rate among the youth are all “hogwash”. Denning writes:
“Facebook has the ability to track users by their identity, something only Google is able to match (through Gmail). It successfully pulled a bait-and-switch by convincing brands to invest in building Facebook communities, and then charged for access. Galloway applauds the acquisitions of Instagram and Whatsapp, as Instagram is growing faster than any other social platform in the world, except WeChat.”
The future of retailer envisioned by Galloway will have to invest in “multi-channel retail”. Moreover, Galloway terms Amazon being a loser because:
“Amazon cannot survive as a pure-play retailer.”
“Stores are the new black in the world of e-commerce. We have discovered these incredibly robust flexible warehouses called ‘stores’.”
In the race price competency, “brick-and-mortar stores” are not anymore behind Amazon. In fact the latter is also shadowing the former in terms of delivery, as more and more stores are introducing free home delivery concept. In Galloway’s eyes “The retailer of the future is Macy’s”.
Talking about Galloway’s visions of Google’s failure, Denning says:
“...although Google is dominant in search, other brands (like Facebook) are cutting into Google’s share... two-thirds of product high-value searches—product searches–are happening on Amazon... Google has yet to master mobile in the same way it mastered computer search... (moreover) Google had major failures in Google Glass and Google+...”
Nevertheless, Galloway also “hopes that most of what he says is right”, therefore Denning speculates on the possibilities of wherein Galloway might have gone wrong.
According to Denning “Galloway may be too quick to write off Amazon” as if physical stores and free shipping were the keys, then Amazon wouldn’t delay in implementing them. Whereas, what the company looks at is providing a wholesome shopping experience to its customers.
Even though Galloway praises Apple for its “luxury brands”, Denning points out that:
“ the past, Apple has succeeded by producing products that are simple, easy, elegant, useful and affordable.”
Moreover, the luxury brands of Apple, like its smart watches along with its “annoying alerts” and “limited battery life”, are driving the company away from its goal of creating products to simplify its customers’ lives.
While, Galloway praises the platform of Facebook, Denning says, that the company’s practice of using personal information to ad companies in order to promote targeted ads in the personal newsfeed cannot be overlooked for long. After all, the right to privacy, will become a major issue once the customers “experience the creepiness of a commercial “Big Brother” listening in on personal conversations”.
However, the future of Google predicted by Galloway will still have to be tested in time, as their success will depend on the company’s ability to adapt with its shifting trend.