The Future and Consequences of AI and Voice-Driven Retail
New research from Voicebot.ai reports that nearly one in five adults in the U.S. already has access to a smart speaker (e.g., Alexa, Google Home), although they might not necessarily have their own. This equates to roughly 47.3 million people, or 20 percent of the U.S. adult population.
Considering that Amazon.com didn’t release its Echo speaker until November 2014, that’s an incredibly fast adoption curve. And it’s not stopping there.
Gartner forecasts the market for smart speakers will jump from $700 million in 2016 to $3.5 billion by 2021. Although millennial men and early tech adopters are still the dominant users of stand-alone smart speakers, the projection doesn't take into account the personal assistant technologies used on smartphones.
Adding those to the picture balances out the gender inequality in the adoption curve for “smart voice device markets.”
Interestingly, though, Voicebot.ai reports that smart speaker owners talk to their devices an average of 2.79 times a day, smartphone users do so only 0.33 times a day.
Smart Speakers and Their Effects on Retail
“Interactive kiosks, mobile-friendly websites and transactional apps have become the norm. But shoppers are looking for deeper connections and more convenience in researching, trying and buying products.
"If mobile is the glue connecting digital and physical retail, then location and voice technology are the bedrock of meaningful shopping experiences of the future:” Gary Mortimer and Louise Grimmer, The Conversation, April 11.
When you look at the stages of retail history as if they were human maturity levels, these transformations are quite revealing:
- Infancy: Location, location, location (High-traffic areas dominate.)
- Toddler: Internet anywhere (We can sell stuff online!)
- Adolescence: Multichannel retailer (Wow, the same buyer will buy online and visit the store.)
- Teen: Omnichannel and “seamless” experience (Connecting regular buyers and making the shopping/buyer process easier.)
- Young adult: Mobile/digital first (Will people really not leave home without their mobile phones?)
- Adult: Smart digital shopper assistants (Humanizing the digital experience, we listen and make it easy for you.)
Retail is very old, but also very young. Its evolution is preparing for a new leap in both how to define engagement, how to deploy it and what roles humans play in it.
Amazon’s dominance of both retail and technology has driven many retailers to team up with other companies to stay competitive. This includes Walmart, which is enabling customers to use voice to shop its e-commerce site via Google.
Target and Home Depot have similar deals with Google. Target enables customers to shop for thousands of products (excluding perishables) via Google’s smart speaker and assistant.
Both Walmart and Target say they can offer more personalized shopping by requiring customers to register their company accounts with Google Express. This means the assistants will know the customer’s favorite brands, which makes for effortless voice ordering and reordering.
Last year, Starbucks added the ability for customers to use voice to place orders in its mobile app. The company says customers also can speak to modify their orders as if they were speaking in person to a barista.
In the future, you might order furniture from Ikea and have your smart speaker read you the instructions for assembly. You could do the same thing with your meal kit subscription. What if you bought a new beauty product, and the brand used voice to talk you through different looks to try?
2 Challenges in the Smart Speaker/Retail Partnership
We get upset when Yahoo announces it's scanning our emails for ads. We freak out when we contemplate an AI system listening to all our conversations at home. Being "always on" creates privacy hurdles that brands must address before smart speakers become pervasive in every home.
If customers become comfortable with just saying what they want to buy and trusting the device to order what they want or might like, that could transform retail marketing.
How do you win prospective buyers over if they don't look at or interact with your product before buying? How do you create brand connections outside of consumption?
This change could shatter the norms of product advertising, too. AI could deem that another brand’s black T-shirt is a better fit for that customer than yours. How can you market against that?
Will this prompt a new type of advertising? Or, could we see brands paying smart speaker companies to prioritize their products?
Gender stereotypes prevail in the selection of female-dominant voices for personal assistants, whereby IBM's Watson has a male voice. This stems from a research and professional foundation vs. task-oriented values. Will new blended voices or adaptive voices shift by the function and mood you're in? Humans react very differently to tone, inflection, rate of speech, and it's not one size fits all. Will this too be a major brand decision? Who is the voice of Walmart? Macy’s?
A cultural shift is also possible. Will our next generation of kids become “rude” if they don't have to say “please” or “thank you” when asking for things? Or will we see an evolution of age-level protocols designed not just to be efficiency oriented but also to teach cultural protocols?
Will we lose the human elements of how we interact? It's possible that brands could take on that responsibility in their targeting and personalization strategies.
Any major innovation has challenges, and this particular innovation has such wide value for consumers that it could disrupt how retailers and manufacturers advertise their products.
Retailers have much to consider with the advent of smart speakers and voice-controlled shopping. If you want to keep hearing the sound of success, you'd best not ignore it.
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With more than 25 years of experience in digital marketing and marketing technology, Baker is an award-winning industry thought leader, columnist and speaker. He has held executive roles at publicly traded, leading agencies and marketing services providers including Razorfish, Targetbase, Agency.com and Acxiom. Direct Marketing roles at American Airlines and Franklin Covey as well as startups including Cordial, TwelveHorses, MindArrow/RadicalMail — a first generation rich media messaging company — and DigitalThink, the first eLearning Platform that went public in 1999. He has served as strategic advisor to various media and technology companies.
Baker is one of only three individuals to be awarded the MediaPost Lifetime Achievement award (in 2012) for his contributions to the digital marketing industry, and he was also the recipient of the DMA-EEC Thought Leader of the Year award in 2016 for his positive impact on digital marketing. He is a MediaPost “Email Insider” columnist and former “Email Insider” Summit Chairman and program director. His works have also been published in iMedia Connection, Internet Retailer, Adweek, Direct Marketing News, ClickZ, The Drum and Chief Marketer.