Voice recognition technology has come a long way since IBM introduced the Shoebox in 1961, which had a vocabulary of just over a dozen words. Today’s voice-enabled devices perform so many different tasks they’ve earned the nickname, “virtual assistants.” Some even have their own personalities.
However, virtual assistants, like Alexa and Cortana, aren't just streaming music and delivering the day’s weather forecast; they're also enabling commerce. Research from eMarketer forecasts that more than four in 10 U.S. smart speaker users will use their devices to make purchases. Spending on voice shopping in the U.S. and the U.K. is expected to surpass $40 billion by 2022.
Commerce is constantly evolving with the advent of new technologies, and the COVID-19 pandemic has only accelerated the adoption of smart speakers. New research shows that smart speaker adoption among U.S. adults has now reached 24 percent. Between millions of Americans no longer commuting to work and the desire to limit physical contact with objects like payment terminals in public, people are turning to contactless and voice technology now more than ever.
But will smart speakers ever really catch on at a large scale? What’s their appeal and where is the technology heading? As commerce continues to evolve at a rapid pace, what should businesses be thinking about to meet the needs of today’s consumer?
The Appeal of Smart Speakers
Most consumers’ introduction to voice-activated technology was via Apple’s Siri or Microsoft’s Cortana. The advent of smart speakers changed the way many people approach shopping, entertainment, and life as a whole. From streaming music and games to telling jokes and answering trivia questions, today’s smart speakers are a virtual playground for consumers of all ages.
In addition to entertainment, we’re also looking to technology to provide new hacks for daily life. Smart speakers offer that by assisting with things, including grocery shopping and education. People are now able to create grocery lists and schedule deliveries using only their voice. Students can use their smart speaker to learn another language or conduct research. Younger children can get help with simple homework questions like spelling or checking math problems. Smart speakers are even assisting teachers in classrooms with activities, audiobooks and other learning tools.
Clearly, smart speakers have vast potential, with the promise of increased productivity. Whether scheduling appointments and reminders, making phone calls, sending text messages, or enabling hands-free online shopping, smart speakers help users get through their to-do lists while they're busy with something else. Hands-off and voice-on, smart speakers take multitasking to a whole new level.
Putting a Face to the Voice
Smart speakers first caught consumers’ attention because of their entertainment value. Therefore, it’s no surprise that the majority of purchases made via these devices have been for digital experiences like streaming music and movies. However, the devices also offer a convenient, voice-activated shopping experience for other consumer goods. So, the question remains: How will consumers make the jump from using smart speakers for entertainment and enhancing productivity to shopping?
Experts note that new users of smart speakers are testing out the shopping-related features of their devices, and early adopters are asking their devices to search for products and ask for prices. It’s compelling to be able to shop without having to pull out a smartphone. However, voice commands without a visual component continue to be a barrier for consumers, perhaps because voice assistants have a high rate of failure for answering specific commerce questions.
The industry is responding to these obstacles with the addition of smart screens that display visual information to accompany smart speakers’ responses. The hope is that adding a visual component to the voice-activated experience will clarify requests and drive purchasing beyond digital offerings.
3 Things to Consider
It hasn’t been long since the term “omnicommerce” emerged to describe a seamless shopping experience online, in-store and via smartphone. The advent of voice-activated shopping adds to that omnicommerce experience and presents even more opportunities for brands.
While the future of smart speaker shopping is yet unknown, one thing is certain: commerce isn’t slowing down. Connecting your brand to another shopping channel may require a new way of thinking.
- Technology: Do you have the technology in place to meet new commerce trends, including voice-activated shopping? How can you ensure your business comes up during voice-activated search requests?
- Security: How will you authenticate payments for voice-activated purchases? What can you do to reassure customers that their voice-activated checkout experience is safe and secure?
- Changing customer habits: Are your customers ready to embrace voice-activated commerce? What information or guidance can you offer to help them feel comfortable with their shopping experience?
The evolution of smart speakers from pure entertainment to the latest e-commerce channel brings with it both opportunities and challenges. How long it will take for voice-activated shopping to settle in as the fourth channel of the e-commerce experience remains to be seen, but now is the time for businesses to begin exploring their options.
The 2020 Global Payments Report published by Worldpay from FIS™ explores more about voice commerce. This report also offers insight into key payment trends, including social commerce along with in-depth analysis of worldwide payment methods. Download your copy here.
Jason Pavona is the general manager for global e-commerce, North America, Worldpay Merchant Solutions, FIS.