The year 2016 was a revelation in terms of consumer exposure to voice-activated shopping. Amazon reported that sales of its Echo devices in 2016 increased ninefold during the holidays compared with the same period in 2015. There are 8.2 million U.S. shoppers who now own one of the voice-activated digital assistant devices, up 173% from an estimated 3 million shoppers in year-over-year growth.
More importantly, owners of the Amazon Echo spent around 10% more on Amazon in the six months after they bought the device than before they purchased it, with purchase frequency also going up by 6%. In fact, the NPD Group’s Checkout Tracking purchase monitor found that Echo owners conduct about half of their total online spending at Amazon once they own the speaker.
2017 should only add more fuel to this trend now that Google has extended voice-activated shopping beyond the Amazon ecosystem. It stands to have a dramatic impact on retailers’ approach to marketing, but the challenge now becomes one of tailoring the marketing function to get into consumers’ voice-activated shopping bags.
On that score, these three game plans may very well rise up the marketer’s playlist.
Back to the Future
In many ways, the dawn of voice-activated shopping takes us back to the earliest days of branding, when Kimberly-Clark pulled off perhaps the largest coup in marketing history by implanting in all of us that facial tissue was now, and forevermore, to be called Kleenex. In the context of voice-activated shopping, retailers are forced to place renewed focus on a similar objective: get the brand to be synonymous with an entire category. When a consumer repeat buys with Echo, for example, the system works by first looking to the last time that item was ordered, and simply adds that same item to the shopping cart.
Which is fine, but only if a consumer has already ordered your brand. But, when people haven’t voice-purchased from a particular category before, they aren’t necessarily asking the assistant for specific brands. They’re shopping for general products. “Alexa, we need beer,” or, “Ok Google, order toilet paper.” As a brand marketer, you need to pull the right levers so that customers request your brand by name on that first order. “Ok Google, it’s time to refill our Charmin.”
The algorithms and forces at play parallel the battle for physical shelf space in a brick-and-mortar grocery store. It is a blessing and a curse: A curse because the pressure on brands to make themselves top-of-mind increases by orders of magnitude; a blessing because there are is a whole new group of shoppers coming online that have no history of voice shopping. As a retailer, this opens a tremendous greenfield to influence what gets into consumers’ shopping bags.
New Life for Omnichannel Customer Service
Naturally, the question that follows is, “Ok, but how do we do that?” For starters, we can look to the potential of voice assistant technology to become a whole new node for enhanced customer service (and the brand affinity that can likely result). Omnichannel has been a buzzword for retail marketers for several years now, but no one yet has quite figured out how to implement it in a meaningful way. Most companies struggle with standardizing the experience across channels, and we see voice-enablement as just the unifying force omnichannel has been missing all along.
For example, imagine a scenario where you wake up in the morning and Alexa reminds you of a sale at your favorite boutique or, even more tied to the moment, that you have unused rewards at Dunkin Donuts.
“Good morning Paul, you have DD Perks to use. Shall I order your usual? It will be free today”
“Yes Alexa, sounds great.”
“Okay. I will place the order when you are 5 minutes away from the store.”
Then, through Echo’s integration with the Dunkin mobile app, the store would know when to make the order, tell you it’s ready with a push notification as you drive, and potentially even have the store’s clerk hand-deliver your coffee when you pull up. The thread of voice activation has just turned the QSR into a near-luxury, personalized one.
This potential to boost the service experience extends into all facets of retail and, more importantly, serves as a reminder that brand value can sprout from simply taking action to indulge impulsiveness. Remember that, above all else, Amazon is a leader in collecting, processing, updating and analyzing information about its customers to fuel everything from personalized upselling, to setting prices specifically geared to attract more customers.
It’s no accident the company’s been referred to as a stalker, and Echo merely increases the number of interactions from which Amazon can pull preference data to log, and act upon. Through this lens, the real wonder of digital in-home assistants is that they present marketers with a much more fluid means to organically pique shoppers’ interests at random times. To make it happen, however, marketers must take the lesson from Amazon and hyper-focus on storing and refreshing customer data, so they know when to act on it.
Ride Google Home’s competitive challenge
Google entered the home assistant market somewhat late in the game, but the good news for retailers is that Google will specifically have to focus its efforts on voice-activated shopping if it is to compete effectively with Amazon. The firm is currently partnering with retailers where consumers already shop frequently, and markets its shopping feature as a way to handle everyday purchases — a strategy it is betting will lead to more repeat purchases, help to make more customers comfortable with the process, and ultimately lead to outright reliance Google Home. Let Google do the work to make Home essential to consumers by way of the shopping app, and reap the benefits of better promotion and organic distribution.
To be sure, if history is a teacher, we’d expect Google’s voice-activated shopping application to dovetail closely with search marketing algorithms. When someone tells Google they need rice, or a new jacket, or a set of flatware, the Google assistant will be programmed to suggest ordering from the local retailer who rises to the top of search results for that category. By that measure, there’s no reason to believe Google’s ecosystem cannot become a wide-open space for retailers of every stripe to gain a foothold. It’s just an extension of tried and true search marketing.
Voice-activated shopping does not begin and end Echo and Google Home devices. At the 2017 Consumer Electronics Show, LG Electronics unveiled its Smart InstaView web-connected refrigerator, which leverages Alexa technology to allow users to buy groceries by standing at the fridge; they can speak their order while simultaneously looking at what’s low. A day later, Ford Motor Co. announced that its Sync 3 infotainment system will enable in-car Alexa applications: Motorists can order products, ask questions or search for restaurants and travel directions while sitting in the driver’s seat.
In short, never has shopping been more effortless — so simple that a child can do it. As marketers, it means we must get better at weaving ourselves organically, authentically, into the everyday life of consumers.
Paul Mandeville serves as Chief Product Officer of QuickPivot
Originally published by Multichannel Merchant on 4/3/2017