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Retailing Trends: Shopping Via Voice

May 10th, 2017

Voice-activated assistants are programs that are designed to work with existing digital devices to perform tasks prompted by voice commands. Although their impact in the retailing landscape is still in its nascent stage, they are likely to create new opportunities for retailers in the near future. As voice-activated assistants’ existing features are honed and new ones are added, retailers and manufacturers should prioritize adapting their businesses to be compatible with these products.

Advances in voice assistant technology continue with Amazon’s Alexa and Apple’s Siri leading the way

Retailers and technology companies continue to invest in improving voice assistant products. Currently, leading voice assistant products are Amazon’s Alexa and Apple’s Siri. Although both products are still in their developing phases and their impact in the retailing realm are limited, they are designed to be tightly integrated with the daily activities of shoppers and have the potential to create unique opportunities for retailers. As voice-recognition technologies improve and these products are able to provide convenient, safe, seamless and consistent shopping experiences, there will likely be growth in customer adoption for retail use cases.

Amazon’s Alexa continues to improve but retail opportunities remain exclusive to Amazon.com

Alexa is Amazon’s voice assistant that can be accessed through its product portfolio: Echo, Tap, Dot, Amazon Fire TV, and Amazon’s Fire tablets. Users activate Alexa by starting their sentences with “Alexa.” Alexa is particularly interesting as it incorporates various non-shopping related activities of shoppers. By being deeply integrated into the daily activities of its users, Alexa can become an integral part of shoppers’ path to purchase, becoming the go to place for easy purchasing.

Currently, users can ask Alexa to play music, set an alarm, search for information, order a cab service, order products on Amazon.com, and more. Amazon continues to add new skills to Alexa and Alexa’s ability to process natural language is also improving. As of May 2016, Alexa can offer tracking information for products ordered on Amazon. By offering easy ordering via voice, Amazon is already reaping the benefits of the greater convenience and locking consumers into its ecosystem. According to a study conducted by the NPD Group, customers that own Echo devices spend approximately 10% more than they did before owning the devices, and also shop more frequently by 6%. Purchasing opportunities using Alexa are currently limited to Amazon.com, allowing Amazon to develop even greater loyalty amongst consumers.

Amazon is expanding beyond the home and making inroads into the connected car sphere through a partnership with Ford. Future generation Ford passenger cars will be synced with the Amazon Echo home hub and its Alexa voice concierge service. In time, the partnership could trigger all manner of retail opportunities, from shopping for groceries while stuck in traffic to instructing a self-driving car (via Alexa) to pick up a package from your local store, or to get parcels delivered at a specific pick-up point. By the end of 2016, three Ford models, the Focus Electric, Fusion Energi, and C-Max Energi, will be equipped with a voice recognition button on the steering wheel. Drivers will be able to utilise the button to make voice commands.

Apple’s Siri starts operating with 3rd party apps, signaling possible retail opportunities in the future

A non-retailer that is making advances with voice assistant technology is Apple. Apple opened up its voice assistant, Siri, to 3rd party apps in fall 2016 with the upgrade of iOS10. Various types of applications, including messaging apps, health and fitness apps, mobile payment apps, image search apps, ridesharing apps, and VoIP apps, are now accessible using Siri. Examples of such apps include WhatsApp, Pinterest, Square Cash, and Skype. Most recently as of November 10, 2016, users in 30 countries can send and request money using PayPal via Siri. Commands such as “Siri, send Bill $50 using PayPal” can be made in various languages. Although these are improvements from its limited collection of basic commands, such as asking Siri to make calls and check the weather, Siri still has yet to offer retail opportunities.

Nevertheless, Apple is likely working on creating such opportunities in the near future through Siri. One of the most recently introduced wearables from the company is AirPods. It is possible that Apple is looking to create a wearable, voice-enabled device that supports retail opportunities through these wireless headphones. Much like how users activate Amazon’s Echo device with ease, users can simply tap AirPods twice to access Siri AirPods link with Apple’s mobile phones, laptops and watches. The product is not yet available and its success is yet to be determined, but Apple is likely envisioning more than a simple pair of headphones with the potential to have consumers make online purchases using their AirPods and Siri while on the go.

Retailers should start developing appropriate strategies to participate in retail opportunities created by voice assistants

Although retail opportunities enabled by voice assistant products are currently limited outside of Amazon’s own eco-system, retailers and manufacturers should think ahead to develop appropriate strategies to participate in the market once it emerges. Voice assistant products will eventually improve to navigate the retail space largely on their own and there are several actions that businesses can take to prepare:

  1. Retailers that are able should build their own voice assistant platforms. Smaller businesses that cannot invest heavily in such products should partner with others that can provide the service.
  2. Retailers should continue to improve their apps, and improve existing features and add new ones while keeping voice assistant products in mind. Retailers must ensure that their apps are compatible with voice assistants.
  3. Retailers should ensure that their customer service departments are prepared to interact with voice assistants regarding their products and services. Once these products are able to navigate their retail space on their own without their users, retailers’ customer service departments will likely communicate more with these products and less with shoppers themselves.

 

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Michelle Malison

Michelle Malison is an Industry Research Associate for Euromonitor International. She has a bachelor’s in marketing from the University of Texas in Austin and a master’s in international relations from the University of Chicago. She combines her experience in consulting and market research to help global organizations grow.

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