Opinion: Alexa, is voice the next frontier in retail?

- by Fran Minogue in News

Opinion: Alexa, is voice the next frontier in retail?

Over the next few years, voice technology will transform how we search, communicate and shop.

As we’ve now passed the tipping point in terms of reliability, usage is set to explode, and as every technological iteration takes hold faster than the last, it’s not surprising that voice is scaling quicker than mobile. Also not surprising is that Amazon dominates with 33 million voice-activated devices sold in 2018. Voice is now a key pillar of growth and the most important development since the iPhone. Smart speaker penetration in the UK is set to reach 48% by 2022, up from 10% in 2017, and sales are forecast to grow from almost zero to $5bn over that period. There is now a whole generation growing up who will view voice-activated devices as the normal way to communicate.

Repeat ordering is the safest option but, understandably, big-ticket items have much lower penetration

But what are we using them for? Music, weather, gaming, smart home activation, even Trivial Pursuit. Currently the most common retail applications are searching for products and tracking orders – ‘Alexa, where is my stuff?’ According to Google, 20% of searches in the US are now done by voice, expected to rise to 50% in the next two years.

Actually using it to shop is still in its infancy, but growing fast – 36% of US and 16% of UK voice technology owners have made a purchase at least once. Yet most consumers know exactly what they want to buy – they are not browsing or exploring.

Repeat ordering is the safest option – Domino’s is popular – but, understandably, big-ticket items have much lower penetration.

Screens are now being added with the Echo Show or Google Smart Display, which will accelerate fashion purchases, especially with the benefit of an electronic style assistant, and integrating them into cars will enable a purchase, followed by the satnav taking the driver to the pick-up point.

Top of voice

So if voice is the future, how do you make sure your brand is the most relevant or ‘top of voice’?

Alexa will automatically select a product based on the user’s browsing or buying history, and if this doesn’t exist, it will offer a line from the Amazon Choice range, though to date this is only available in more functional categories such as electronics.

‘Choice’ status is based on customer-centric metrics, not revenue optimisation – products need to have an average rating of 4.5+, low returns and be eligible for Prime. Long term, these are critical to success and could boost sales up to three times; conversely, losing Choice might mean a 30% reduction in volume.

It is estimated that by 2021 there will be more digital assistants than people on the planet

As Echo dominates the direct-to-consumer market so far, search is inevitably moving from Google to Amazon, but Google is fighting back by partnering with leading retail brands. Argos was the first to sign and Asos has recently linked up – fashion shoppers can now say ‘Hey Google, talk to Asos’.

Alibaba is using voice assistance devices in unstaffed stores and they are also being adopted in big-box formats to help customers navigate the aisles and find products.

By the end of this year, 30% of customer interactions could be by voice, and it is estimated that by 2021 there will be more digital assistants than people on the planet. So we had better start thinking what else to do with those things on the ends of our arms.


Clarity is an International Board Advisory and Executive Search firm specialising in the Retail, Consumer, Hospitality and Leisure sectors.
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