digital assistants

Retail reality 

The voice of a new generation of shoppers

“Hey Google, which detergent is on special offer?” “Siri, I fancy a pizza.” “Alexa, I'd like to re-order that USB-C cable.”
Although shopping with the help of digital assistants is certainly possible, many users currently mainly check the weather, listen to music, ask general questions, or simply set their alarm.
While currently around 10% of all searches are done with the aid of voice interaction, Comscore predicts that this will be 50% by 2020. Based on research among 5,000 consumers in the US, Great Britain, France and Germany, Capgemini even concluded that speech assistance will become the most widely used method of interacting with consumers in the near future. And - you guessed it - that could turn our way of shopping upside down.

Which digital assistant will soon be doing your shopping?

The digital assistants of Amazon (Alexa), Google (Assistant), Apple (Siri), Microsoft (Cortana), Alibaba (Aligenie) and Tencent (Xiaowei) are eager to make shopping even easier.
They are expected to be the driving force behind the immense advance of conversational commerce in the years to come. You're going to see them in all shapes and sizes. They will range from your personal mobile assistant in smartphones, smartwatches, smart speakers and cars, to a variety of chatbots. But you will also find them in physical stores in the form of robots, smart mirrors and talking shelves.

In 2018, Voicebot concluded that one in five Americans used voice as part of their shopping journey. A year later they discovered that over 40% of all American smart speaker users had already used their device to search for a product or product information.

Almost a quarter of consumers already prefer a voice assistant to a website for a variety of things. The forecast is that this percentage will grow rapidly to over 40% over the next two years.

And the shopping? Well, there the researchers' insights still vary considerably.
While one study states that 19% of Americans have ordered something using a smart speaker and that even 62% of smart speaker owners have already bought something through this device, another recent survey states that in 2018 only 2% of Amazon's Alexa owners actually used it to buy something and that 90% of those had confined this to one purchase.

The truth will be somewhere in the middle. At any rate, voice commerce is expected to grow strongly in the coming years, reaching a total turnover of more than 80 billion dollars in 2023.
For the time being, many of the current purchases are digital, ranging from ebooks, movies, series and games, to digital credits. However, the question is, when will the user experience become so strongly embedded that shoppers will also buy more physical items through their assistant?

Speed and convenience are the keys to success
 Because interactions are much more 'human', voice is potentially much faster than typing or swiping. One case that illustrates this well is the Alexa Skill developed by British Virgin Trains in 2018 to facilitate ticket booking.

“The average time it takes to book a ticket online is seven minutes […] and we've got the booking time down to two minutes on the Alexa Skill,” said John Sullivan, chief information officer at Virgin Trains.

[Quote: Virgin Trains reduced the time it took to book a ticket from seven to two minutes using Alexa Skill”]
What's more, a shopping journey with a smart speaker is much more frictionless. You don't need to unlock your smartphone, launch an app, tap and swipe, but flash through your shopping process with a few voice interactions.

Yet there are also some speed bumps in the process. For example, browsing lists with different options using voice is much more difficult and slower than swiping through a visual list of options and, most of all, it's difficult to judge a product when you don't have a visual reference. Moreover, linking accounts is often quite a challenge and the possibilities available within the voice environment vary according to country and platform.
However, don't let this distract you from the potential that the technology has to offer. The technology is growing up fast and is becoming more user-friendly with each update.

The challenges for retailers
The message should be clear: as a retailer and brand, you will have to work with voice assistants. The question, however, is how? And what should you take into account?

Overall, there are three options:

  1. Integrate voice search into your existing digital touchpoints
    The easiest step and a small extension to your current digital services via existing touchpoints: allow users to search within your digital environments using voice instead of typing, tapping and swiping. This greatly benefits their user experience.
  2. Create your own Skills or Actions for the major digital assistants
    Google's Assistant and Amazon's Alexa allow you to develop your own interactions that users can access as a kind of small app. So you are creating your own environment within the world of a digital assistant, in which you have direct contact with your shopper for service or direct sales.
  3. Organise your data for integration with the major assistants and their platforms
    Is a user using their assistant - probably 'the big 2' Google Assistant or Amazon Alexa - to search directly for a product you have in your range? Then it's important that you give the assistant direct access to your structured data, so that all relevant product information can be accessed immediately and the path to an order can be followed smoothly. In fact, you simply offer your product range through the marketplaces of Google and Amazon, and their assistants are the store front.

Retailers and brands, take note!
For consumers, digital assistants will provide a lot of convenience and a shorter 'screen time'. For retailers - physical, online and omnichannel - the impact is expected to be significantly greater. We have listed a number of things:

  1. Your store front is going to change radically.
     No longer is your own shop or app the entrance to your product range. So the questions become, how do you create traffic, what will make you special, and what control will you still have of the customer experience? In fact, how much space will you have to brand your store when users are actually teleported directly to your warehouse by their digital assistants?
  2. Insight into your (users) data
    You are the owner of your user data through your own channels, and you have direct access to the insights they can offer you. However, if your customers shop through Google Assistant or Alexa, these platforms obviously know your customers better than you do.
  3. (Extra) commission on your sales
    When your products are sold through the assistant's marketplaces - and perhaps also using their specific payment services - your margin also changes. While your price is already becoming more important in order to be 'selected' by the assistant as a potential provider, you will probably pay extra commissions on top of that.
  4. The competitive field changes
    With the increasing dominance of digital assistants and their marketplaces, there is a danger that - as a multibrand retailer - your band will become increasingly less a differentiator. You will be at the mercy of the AIs, and dependent on your skill in taking advantage of this in the right way. You will also be at the mercy of increasing competition with regard to prices.

Gimmick or game changer?
Only time will tell. In any case, substantial parts of both physical and digital journeys will shift towards the voice domain and as a retailer and brand you will have to at least work on creating a vision of your future in this playing field. Start testing and learning now, so you are ready to move fast if the voice revolution really takes place!

[Inzet] Cool or creepy? Assistants who empathise with you...
There are persistent rumours about the new Amazon 'Dylan' project - a collaboration between Amazon's Alexa team and their Lab126 hardware division. The product? A smart wearable that you can not only talk to, but which can even recognise your emotions during the conversation. Do you sound stressed? Then, no doubt, Dylan will recommend a book about Mindfullness, or maybe a modified diet.

Whether the product will actually reach the market remains the question, but that digital assistants are becoming increasingly human is beyond any doubt!

Do you want to know more about this trend? Then you should contact Erica Twigt, erica.twigt@kega.nl  or +31 (0)252 750275.

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