‘In its infancy’: Why voice-assisted purchasing isn’t likely to go mainstream in 2019
While 41 percent of U.S. consumers own a smart speaker, few are doing their shopping on Amazon Alexa or Google Home devices. And unless customers start making voice purchases in huge numbers, brand marketers will be waiting in the wings until user adoption inches up.
Like the early days of internet searches, the technology’s potential is yet to be fully realized. A recent report from Amazon highlights the 2018 holiday season’s growth in voice commerce. According to Amazon, consumers’ embrace of Alexa-initiated purchases more than tripled compared to just one year earlier. Though this represents progress, Amazon didn’t provide specific figures. And it’s still far from moving the user adoption curve beyond an experimental phase in 2019.
“It’s in its infancy, we’ll have to see as adoption rates rise, [and] how it advances,” said Amanda Martin, director of enterprise partnerships at digital advertising company Goodway Group. As the number of people who own smart speakers grows, adoption will eventually follow suit, a trend likely to bear fruition over the next couple of years, she added.
Though Amazon reportedly had a 65 percent share of the U.S. smart speaker market as of September 2018, according to a recent report from The Information, only 2 percent of people who own Alexa-equipped devices made a purchase with it.
“I see this voice shopping as the next iteration of search, especially because it aligns with Google, and it brings in Amazon,” said Martin. “Google tends to position itself as the neutral search option,” she said.
In considering expectations for the coming year, Martin said we’ll see growth in voice-activated purchases of cheap, commoditized products that need to be replenished regularly (kitchen towels or toilet paper, for example). The smart speaker will remember the customer’s purchase history and the customer will be easily able to carry out repeat orders, but beyond that, it gets more complicated. But his use case raises concerns for advertising potential: If customers are using the technology to refill a go-to purchase, and a competing brand has bought ads against that command, that makes for an unwelcome user experience.
“[Customers’] behavior will help advertisers and merchants understand how they need to ready themselves for a higher adoption rate,” Martin said.
Much like search, marketers are still figuring out how to operate in a context where each platform gives certain retailers an advantage, and where they can’t rely on visual advertising to drive purchase behavior. For example, a recent Gartner L2 study found that most of Alexa’s default product recommendations were Amazon choice products. Meanwhile, Google Home results were dominated by a handful of large retailers, with Walmart being the most visible retailer on Google Shopping, accounting for more than 40 percent of the first three voice recommendations. As a result, retail brands may have a greater incentive to work with Google owing to its “open marketplace” positioning.
Beyond how voice platforms’ product recommendation engines work, a customer experience that’s not fully seamless may be holding some back from fully embracing it, said Kevin Perlmutter, chief innovation officer at sonic branding agency Man Made Music.
“Audio experiences have an immediate subconscious effect on people, and that informs their behavior,” he said. “If they’re instantly reminded of a call center, people are not going to come back.”
As the technology is still at an early stage of its evolution, it’s still prone to glitches or outages, as experienced by some European users this past holiday season. As a result, analysts say the march to greater adoption is a long game, and customers are more likely to use the devices to learn more about items rather than completing purchase transactions through them.
“We believe, based on surveying consumers and our experience using digital assistants, that the number of consumers making purchases through voice commands is insignificant,” wrote Gene Munster and Will Thompson of Loup Ventures, in a recent blog post. “We think commerce-related queries are more geared toward product research and local business discovery, and our question set reflects that.”
‘Clever about how we rest’: As uncertainties drag into fall, agencies are facing a burnt out and fearful workforce
Agency employees and executives say that a feeling of fatigue due to the on-going uncertainty and the need to be always on has set in.
‘A credible voice’: Why Honda is doubling down on esports
Honda has struck deals with Riot Games, pro esports team Team Liquid and Twitch as it looks to maintain its appeal among first-time car buyers.
Member Exclusive‘2020 has been the year of contingency plans’: The new norms of marketing
Six months into a paradigm shift in marketing due to on-going crises, marketing leaders say that many of the coping changes put in place are here to stay.
SponsoredThe race to frictionless consumer journeys is expanding beyond marketplaces
Compressing consumers’ path-to-purchase is the holy grail of advertising and marketing. When Jeff Bezos authored 1-Click in 2011, advertisers began to realize that in some cases — especially for consumables — awareness, consideration and purchase can all happen in seconds. Since then the rise of e-commerce marketplaces has forced a major shift in the design […]
Snap is exploring bringing ads to Minis
Snap launched Minis, lightweight third-party applications that sit within the Snapchat app, in July. Now it's looking to monetize them.
Deep Dive: How the Summer of 2020 forced brand marketing to change for the better
The coronavirus crisis upended the world for brands and marketers, but as it turned out, the pandemic only marked the beginning of a wave of technological and social changes that would sweep the nation. A summer of protests ignited calls for change from the street to the boardroom, prompting brands to examine their values and […]