Voice-As­sisted In­ter­faces And The Fu­ture Of E-Com­merce

Forbes Middle East - - CONTENTS - By Em­manuel Durou and Jo­erg Meiser

The U.A.E. has grown into the most mo­bile and in­ter­net friendly coun­try in the Mid­dle East, with over 99% of the pop­u­la­tion ac­tively us­ing the in­ter­net at an av­er­age of al­most eight hours per day. This has long since led to far-reach­ing changes in re­tail. Fol­low­ing the change in in­ter­ac­tion brought about by touch screen smart­phones, the next ma­jor rev­o­lu­tion is now im­mi­nent with voice-con­trolled shop­ping.

In­tel­li­gent speech as­sis­tants are al­ready dis­rupt­ing dif­fer­ent ar­eas of life, with voice-as­sisted in­ter­faces not only used for in­for­ma­tion re­trieval, de­vice con­trol or en­ter­tain­ment, but also in­creas­ingly for shop­ping, es­pe­cially in the U.S. This new trend could rev­o­lu­tion­ize re­tail and e-com­merce once again.

Sim­ple as­sis­tants have evolved to be­come in­tel­li­gent sys­tems that are con­stantly learn­ing thanks to AI. Nowa­days they are able to solve com­plex tasks. As they mimic hu­man in­ter­ac­tion, a flex­i­ble com­mu­ni­ca­tion via dif­fer­ent me­dia is pos­si­ble. Voice com­merce is be­com­ing in­creas­ingly im­por­tant. Global smart speaker rev­enues are ex­pected to reach $17.4 bil­lion by 2022.

What in­flu­ence will voice-as­sisted in­ter­faces have on the fu­ture of shop­ping? What will the con­se­quences be? And how can mar­ket par­tic­i­pants po­si­tion them­selves op­ti­mally? Let’s look into four pos­si­ble fu­ture sce­nar­ios.

Sce­nario 1: The old world—1,000 lit­tle cas­tles

Due to the tight­en­ing of an­titrust law and data pro­tec­tion, no com­pre­hen­sive voice so­lu­tions are pos­si­ble. The mar­ket for voice as­sis­tants con­sists of non-in­te­grated silo so­lu­tions by in­di­vid­ual mar­ket par­tic­i­pants. Fran­chis­ers and in­de­pen­dent re­tail­ers have their own in­de­pen­dent voice so­lu­tions. This de­liv­ers mar­ginal added value to con­sumers as they have no end-to-end uni­fied dig­i­tal so­lu­tion. Mid­dle East fran­chis­ers work closely with brands to tai­lor voice com­merce to their specifics to place them more promi­nently, lead­ing to higher mar­gins.

Sce­nario 2: Age of het­ero­genic al­liances—100 king­doms

Al­liances are made be­tween large re­tail­ers and man­u­fac­tur­ers whose spe­cially de­vel­oped lan­guage tech­nolo­gies are based on dif­fer­ent stan­dards and can­not be com­bined. Here the choice of a strong al­liance with a fran­chiser will prove to be vi­tal. This may be bad for man­u­fac­tur­ers and brands, but is pos­i­tive for large re­tail­ers and Mid­dle East fran­chis­ers. They have the chance to be­come the core el­e­ment of an al­liance with a global or in­ter­na­tional man­u­fac­turer as they are the only en­try for them into the Mid­dle East mar­ket.

Sce­nario 3: World of ag­gre­ga­tors—3 big kings

Large tech­nol­ogy com­pa­nies like Ama­zon con­trol closed tech­no­log­i­cally-in­te­grated sys­tems, act­ing as gate­keep­ers be­tween pro­duc­ers, re­tail­ers and con­sumers, with the power to sig­nif­i­cantly in­flu­ence sup­ply and de­mand. Other mar­ket play­ers like Noon will need to form al­liances with tech gi­ants like Google to cap­ture a slice of voice com­merce. For man­u­fac­tur­ers and brands this is a pos­i­tive sce­nario as they can sur­pass the fran­chis­ers. How­ever, es­tab­lished re­la­tion­ships with re­tail­ers and fran­chis­ers be­gin to crum­ble as the re­sult of a shift to­wards tech providers. For Mid­dle East fran­chis­ers and re­tail­ers, this is the sce­nario with the great­est chal­lenges. A strong in­crease in price pres­sure will lead to lower mar­gins, and to re­main suc­cess­ful and prof­itable in the mar­ket in the long term, new busi­ness mod­els are nec­es­sary.

Sce­nario 4: The new in­ter­net—one global em­peror

Large tech com­pa­nies make tech­nol­ogy and data avail­able to the pub­lic, over­jump­ing re­tail­ers and fran­chis­ers. It is in­te­grated in all de­vices, from smart speak­ers to re­frig­er­a­tors, as well as voice and sen­sor tech­nol­ogy. This is the best sce­nario for man­u­fac­tur­ers, and the worst for fran­chis­ers in the Mid­dle East. They ac­cess di­rect sales via tech providers, which gives them the chance to by­pass re­tail­ers and fran­chis­ers. A shift to­wards mail or­der and in­no­va­tive last mile is ex­pected and the mar­ket is char­ac­ter­ized by enor­mous price pres­sure. Loy­alty and an­a­lyt­ics will be de­ci­sive for suc­cess. The im­por­tance of cus­tomer ex­pe­ri­ence and cu­ra­tion as com­pet­i­tive fac­tors will in­crease.

In 2030, voice com­merce could claim a share of 30% of e-com­merce rev­enues. In in­ter­con­nected sce­nar­ios, the im­pact on e-com­merce growth is par­tic­u­larly high. The U.A.E.’s e-com­merce mar­ket could grow by al­most 200%. Mar­ket play­ers should al­ways keep an eye on the risk of govern­ment in­ter­ven­tion and leg­isla­tive changes. Le­gal re­stric­tions could have a ma­jor im­pact on voice com­merce at any point.

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