Listen, retailers, brands: Don't ignore voice shopping
(Bloomberg Gadfly) -- With another Black Friday and Cyber Monday in the books, Amazon.com Inc. has issued a self-congratulatory press release about how it fared during the shopping frenzy. As is typical for these recaps from Amazon, the report was skimpy on useful statistics.
But there was one data point that jumped out at me: The e-commerce behemoth said that, over the holiday shopping weekend, its Echo Dot home voice assistant was the best-selling item across its entire product catalog.
This served as a powerful reminder of how quickly this technology is making its way into shoppers' households.
Consumers are using voice assistants to cue up music, set timers and get weather forecasts. And they're also starting to use them to shop.
I'm hardly ready to declare that, 10 years from now, dictating a shopping order to Alexa will be your primary way of buying groceries or anything else. It's simply too early to know. But it's clear that consumer brands and retailers should take this technology seriously and not dismiss it as a novelty.
Not only is adoption growing, but Amazon -- a company that to some is an invaluable sales partner, to others a competitor or frenemy -- already plays a massive role in this universe. Big brands don't want to fall behind as Amazon cultivates this potentially important new turf.
Siri from Apple Inc. and S Voice from Samsung Electronics Co. Ltd. still dwarf Alexa in voice-assistant market share. But Alexa use is growing explosively, while Siri and S Voice are losing ground. Alexa's monthly unique users grew 325 percent between May 2016 and May 2017, according to a study from consumer-data firm Verto Analytics.
YOY increase in unique monthly users of Alexa - 325%.
And when it comes specifically to voice-enabled speaker devices that stay put in your home -- as opposed to voice-assistant software embedded in your smartphone -- Amazon is clobbering the competition.
It's true that speaker devices such as Echo Dot and Google Home may ultimately prove to be a bridge technology of sorts. They could acclimate people to the idea of using voice commands, only to later fade from relevance as people switch to using voice assistants on their phones to carry out similar tasks.
But it matters that many consumers are forming their habits on this technology via Amazon's device and platform.
In a recent study, consultancy Bain & Co. found that if you're making a first-time purchase of a given item without specifying a brand, Alexa frequently recommends "Amazon's Choice"-anointed products before the top search result. Bain also found that, in categories in which Amazon has a private brand, Alexa recommends such an item first 17 percent of the time.
"Given that these products represent only about 2 percent of total first-party unit volume sold," the Bain report says, "the online retailer clearly positions its own private labels favorably in voice shopping."
Just as it matters in desktop Web to be on the first page of Google's or Amazon's search results, it's going to matter a great deal in voice if you're one of these first or second recommended products -- and it won't be easy to secure that real estate. Brands should carefully consider how to avoid getting lost in this format.
And they should think about ways to connect with shoppers via voice technology outside of the Amazon ecosystem. Wal-Mart Stores Inc. and Target Corp. seem to have already gotten this message; each has teamed with Google to make it possible to shop for some of their items via Google Home and other devices powered by Google Assistant.
To be sure, voice assistants matter much more for some retailers and brands than for others. Replenishment purchases -- items such as laundry detergent, dish soap and diapers -- seem especially conducive to on-the-fly voice-ordering.
Sellers of goods such as shoes or sofas -- purchases that often involve a lot of browsing -- are more insulated. It's hard to imagine someone just bellowing an order for a prom dress at her Echo Dot without laying eyes on the frock first.
But the retail industry also should consider that we could one day see far different uses for artificial-intelligence-powered voice assistants.
Sucharita Mulpuru, an analyst at Forrester Research, points out that a more compelling endgame for this technology might be in-store use. Imagine, she says, going into a big-box store, asking your phone, "what aisle is the syrup in?" and getting an instant response tailored to that store location.
Experimenting with voice shopping now could be a way to get in position to make such innovative leaps down the road. And that's why most retailers shouldn't stay on the sidelines as this technology emerges.
(About the author: Sarah Halzack is a Bloomberg Gadfly columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.)