Home voice assistants offer retailers another E-Commerce platform

As home voice assistants become more commonplace, consumers are using them not just for recipes, information, and entertainment but also for shopping help and, more and more, to make purchases.  Every new e-commerce platform creates opportunities and challenges for retailers, and these devices certainly do that.  The issue that individual retailers need to address now is how — and, in some cases, whether — to integrate this platform into their own sales and marketing efforts. 

It’s important to note that shopping by home voice assistant — indeed, the technology itself — is very much in its infancy.  This is particularly true in the U.K., where Amazon Echo debuted in September 2016; Google Home, which rolls out in Britain later this spring, only added a shopping function for U.S. users in February.  However, today’s U.S. market likely offers a good preview of what could transpire in the U.K. over the next year or two. 

Amazon is the clear front-runner in this e-commerce realm; its post-Christmas press release touted the sale of “millions” of Echo devices around the world during the 2016 holiday season.  Meanwhile, it’s unclear if or when U.K. users will be able to shop through Google Home.  Apple, which introduced Siri as an iPhone feature in 2011, is reportedly working on its own smart home speaker, while Microsoft is trying to expand awareness, usage, and the skills set of its Cortana software. 

Echo products (including the Echo Dot and the Amazon Tap) dominate the market for several reasons: 

  • Echo’s launch in the U.S. in late 2014 gave it a two-year head start on Home;
  • Echo users can access over 10,000 “skills,” compared to 80 or so “Actions” available on Home; and
  • Amazon is more widely associated with retail activities than Google is.

Google isn’t marketing Home as an e-commerce tool, though; it’s primarily intended to provide exactly what the category name states:  assistance in the home.  In fact, shopping isn’t among the top five uses of these devices.  Per a recent study, the most repeated functions among Echo owners are playing songs; controlling smart lights; setting timers; connecting to a paid music service; and reading the news. 

The lag in shopping usage is probably due to a combination of factors, including:

Audience restrictions: Only Amazon Prime and Google Express members can shop through their devices.   

Inventory limitations: Members can only order items that are available through their subscription program.  

Programming glitches: The devices still have difficulty interpreting what they hear. 

Learning curves: People aren’t yet accustomed to buying things by talking to inanimate objects.  

The audience numbers will grow; it’s estimated that half of all U.S. households belong to Prime, and Express is available in 90% of the continental U.S.  Similarly, Prime has a robust selection of sellers and products, and the much smaller Express network will surely expand over time.  With ongoing advancements in artificial intelligence, the language disconnect should soon fade.  To maximise their results, though, retailers will need to keep updating their SEO verbiage and SEM efforts in accordance with the device makers’ protocols. 

As for the lack of familiarity with the shopping process, it’s fairly straightforward on both Echo and Home.  Generally speaking, a member simply needs to use the proper words to order a product.  The device will then scan through the member’s recorded purchase history to identify the requested item; if it can’t be found that way, the device will offer options that match the request.  Once the desired item is determined, the member can then confirm the order. 

From retailers’ perspectives, these factors present both possibilities and obstacles, to varying degrees.  For starters, merchants interested in the Echo platform will have to decide whether they want to join the Amazon Prime network (if they’re not already in it).  While participation offers them access to a huge audience, it also comes with a variety of fees, both in the U.S. and the U.K., that can trim sales margins — sometimes significantly. 

As noted earlier, U.K. Home users probably won’t be able to shop by voice at launch.  This year, though, Google plans to roll out a feature in the U.S. that searches local retailers’ inventory feeds to help Home users find nearby stores that have specific items in stock.  (Stores need to advertise on Google to participate.)  The enhanced search function will no doubt appeal to consumers, who predominantly use home voice assistants to look for rather than to buy products. 

Another factor that retailers need to ponder when developing their platform strategies is whether they sell items that people want to order by voice.  One drawback to online shopping is that people can’t touch or try on an item before buying it.  Shopping by virtual assistant removes another key element of the purchase process:  The ability to see the item under consideration.  Even in the long term, voice shoppers will probably be more inclined to buy only those items they’ve already purchased. 

Placing an order sight unseen raises another important issue for retailers.  Return rates for online orders are up to three times higher than rates for in-store purchases, and voice-generated orders could result in another spike in returns.  Some merchants might therefore want to set certain conditions on the types of purchases that consumers can make through these devices. 

Amazon is focused on expanding Echo’s reach in the U.K. and Germany, and Google is about to do the same with its Home product in the U.K.  Retailers therefore need to explore the options that this new platform offers.  As users become more comfortable with shopping by home voice assistants, stores should see increased opportunities to grow their audiences and their bottom lines — even if their customers don’t (or can’t) place orders directly through these devices. 

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