‘Alexa, I need ... everything.’ Sales via voice could hit $40B
The retail revolution shifting sales from stores to laptops to smartphones could be on the verge of its next sea change — when shoppers will ask Amazon’s Alexa and other voice-driven speakers to order just about everything.
Purchases made through devices such as Google Home and Amazon’s Echo are projected to leap from $2 billion to $40 billion by
2022 as technology improves, U.S. consumers become more comfortable and the speakers become nearly as commonplace in homes as a flatscreen TV, according to a new study from OC&C Strategy Consultants.
“We really see this as the next big disruptive play in U.S. retail,” says John Franklin, associate partner at OC&C, which surveyed
1,500 smart-speaker owners in December.
The smart-speaker space is one in
which many tech giants want to play. Though Amazon and its digital helper, Alexa, have come to define the niche, Google Home and its Google Assistant are second in popularity. Apple began shipping its Siri-assisted HomePod smart speaker in February. Microsoft’s “Cortana” is also part of the mix.
For now, the most popular use of voice-driven speakers is to play music or find out whether to take an umbrella when heading out the front door, OC&C says. But voice-driven speakers are at the center of a budding universe of AIconnected devices that include bathroom mirrors, door locks and TV monitors. Smart home product sales are expected to total $4.5 billion this year, up 34% from 2017, according to the Consumer Technology Association.
Among the U.S. residents who have a smart speaker, 62% have used it to buy groceries or some other item, according to OC&C’s study. The report predicts that more than half of U.S. homes will have a smart speaker by 2022.
“That number has been going up incredibly rapidly over the last two years,” Franklin says. “That’s clearly a big driver in the overall potential in voice shop-
Smart home product sales are expected to total $4.5 billion this year, up 34% from 2017, according to the Consumer Technology Association.
ping. We then expect household spending with smart speakers will increase also.”
Amazon is still king
Amazon, which first upended the retail environment when it wooed readers away from traditional bookstores, then became the go-to for many online shoppers interested in items ranging from toys to tools, dominates the emerging smart-speaker space as well.
The Amazon Echo is used in 10% of U.S. households, followed by Google, which is in 4% of homes, and Microsoft’s Cortana, which comes in at 2%.
“Retailers should be taking notice of this primarily because of the way Amazon is pushing this technology and the potential Amazon has ... to access consumers on a regular basis and in a very intimate way,” Franklin says.
Google is pushing back. The world’s largest search engine has linked up with a range of retailers, including Whole Foods, Costco and Walmart, whose items are available through its shopping and delivery service Google Express. Customers can place orders through Google Home, as well as on the Google Express website and app.
Voice shopping obstacles
There are hurdles that could slow how quickly shoppers take to voice shopping — and how lucrative voice-based purchases are for retailers.
It can be difficult to compare prices when ordering via speaker.
For retailers, OC&C found that the tally from voice orders isn’t typically as high as purchases made online. Shoppers are more apt to buy cheaper items, such as phone charger cables, via voice. The average online basket was $661 for online purchases of electronics, compared with $239 for voice orders, OC&C said.
Then there’s the matter of trust. Among shoppers who don’t make purchases through a smart speaker, less than half, 45%, say they would trust the device to recommend the best reviewed products. Among those who do shop via voice, 83% say they have confidence in the assistant’s suggestions.