What it Will Take for Retailers to Succeed With Voice Commerce
Recent market research predicts that voice shopping will explode to over $40 billion by 2022, up from $2 billion today. As popularity in voice assistants like Google Assistant and Amazon Alexa grows rapidly, retailers are jumping at the opportunity to create unique and dynamic shopping experiences by leveraging the new technology. However, in an era when customer experience defines a brand, today’s smart speakers aren't adequately equipped to handle the nuances of retail and online shopping.
A Massive Market Opportunity
Today, approximately one-third of U.S. consumers have a smart speaker, with the worldwide installed user base exceeding 100 million units. According to Deloitte, the smart speaker was the device with the highest year-over-year increase in ownership through mid-2018 in six of the seven markets in which they were available from multiple major brands. Deloitte also estimates that 164 million smart speakers will be sold in 2019. This surge in smart speakers — coupled with voice assistants found in smartphones and Internet of Things-connected devices and appliances — spells huge opportunity for retailers. In fact, industry experts predict that voice shopping on Alexa alone could generate more than $5 billion per year in revenue by 2020.
In the not-too-distant-future, as voice-enabled technology becomes ubiquitous, consumers will be able to grocery shop by speaking to their refrigerator, gear up for their weekend ski trip by asking Alexa to purchase supplies, order lunch from the restaurant up the street by speaking to their car, and buy a new pair of sneakers while on the treadmill by commanding their smart watch.
Some early retail adopters have already taken the customer experience to the next level with voice. For the 2018 holiday season, H&M launched a voice-enabled gift guide spotlighting its home décor collection, powered by Google Assistant. Shoppers could browse products and purchase merchandise via voice command. Meanwhile, a voice-based app prototype for Alexa demonstrated how voice technology can be used to help in-store shoppers find products they’re looking for and answer their product-related questions. This innovation could not only help retailers reduce demands on staff, but also create unique shopper profiles that capture consumers’ questions and preferences to help personalize future visits to the store.
It’s clear that voice technology will soon play an integral role in the retail customer experience for the masses, offering unprecedented levels of convenience, integration and customization … but we’re not there yet.
The Factors Inhibiting Widespread Adoption
While consumers are stocking up on smart speakers, the vast majority aren't using them to shop. According to research by The Information, only 2 percent of people owning an Amazon Alexa used it to make purchases in the first eight months of 2018. Why is there such a disparity?
Shopping is a highly visual experience. Most people want to see a product before making a purchase, particularly when there are multiple options to consider. That’s why 62 percent of consumers still prefer to shop in-store. With voice shopping, consumers lose the ability to visually browse and search for products. Unless the person knows exactly what they want — from the brand to the exact product name — it often becomes difficult for the voice assistant to positively identify and recommend the right product. Furthermore, since many smart speakers are screenless, post-purchase confirmations cannot be displayed, which can create unnecessary confusion and frustration on the customer side.
There’s also the huge issue of voice recognition. Anyone who has ever used a voice assistant can relate to the challenges in getting your device to understand and accurately respond to your request — even after multiple attempts. Add everyday background noise or another person’s voice to the mix, and the chances of getting your request right are slim to none. For voice commerce to become mainstream, voice technology must evolve to deliver improved recognition and accuracy, and ultimately, more personalized results.
The Key to Improved CX
Technologists are making breakthroughs with artificial intelligence-powered signal processing solutions that use biometrics to aggressively separate and improve the voice of interest from background voices and sounds. These advancements promise to eliminate today’s voice identification and customization challenges by helping smart speakers and voice assistants to improve pattern recognition, overall sound quality and speech command accuracy.
For retailers to ultimately succeed with voice technology, they must truly understand and successfully design the customer journey based on their audience’s specific needs and expectations. Voice is just one of many channels that the shopper may choose to utilize, providing the retailer with a valuable new way to collect data and better understand the customer’s purchasing behaviors. By harnessing the power of AI and voice biometrics to enhance sound quality and speech command accuracy, high-quality voice technology will soon become an integral piece in solving the retail customer personalization puzzle.
Ken Sutton is co-founder, president and CEO at Yobe Inc., a software startup that's pushing the boundaries of artificial intelligence-powered signal processing.
Ken Sutton is co-founder, president and CEO at Yobe Inc., a software start-up that is pushing the boundaries of Artificial Intelligence powered signal processing.
Ken is a serial entrepreneur with nearly 20 years of strategy and corporate business management experience in the technology, marketing and finance industries. Prior to his tenure in Technology, Ken was a financial services professional who worked on critical projects for hedge funds, venture capital and private equity firms who focused on Pre-IPO investments in the technology and real-estate arenas. Ken started his first venture (TMG) directly out of University. The Tampa Marketing Group was a multi-state B2B marketing firm, focused on product development, market research and brand strategy. TMG managed regional product promotions for the following companies: Vivitar, Universal Studios, Disney, MCI, Major League Sports teams and AT&T to name a few.
Ken’s other start-up experience includes: Founding Member of Co-Mune Inc (a community focused connectivity and mobile commerce platform), and Managing Partner Sutton Willis and More (a boutique strategy and capital advisory firm). Ken attended the University of Connecticut has served as a proud member of the US Armed Forces (Army Ranger).