Conversational Commerce: The White Space for Retailers as Consumer Usage of Voice Assistants Grows
Voice assistants continue to proliferate, but are consumers really using them to shop? And what should retailers be doing now? Research shows that consumer adoption levels outpace the readiness of retailers in this area, and there’s a first-mover advantage that’s available for the taking.
Voice interfaces will continue to evolve in coming years to create a more contextualized, conversational experience supported by predictive technologies that anticipate shoppers’ preferences and needs. The truly differentiated shopper experience will come when brands have their own voice – literally – that can interact with consumers both within their homes and everywhere else they choose to engage.
Adoption of voice assistants
Smart speakers with voice assistants are the latest in technology changing consumer behavior and redefining expectations. The five-year growth rate for smart speakers is forecast to be 653 percent, dwarfing the comparative speed of mobile phone adoption at 286 percent.
Many consumers took advantage of 2017 holiday promotions and now boast interconnected smart speakers in several rooms in their home, allowing them the control of, and ability to, interact with their environments with simple voice commands ranging from “dropping-in” to other rooms, adjusting lighting and temperature levels, accessing news and media, and online shopping.
How voice assistants will transform consumer behavior
There’s no question that over the past 20 years e-commerce, omnichannel and mobile have dramatically enhanced shopping and forever altered consumers’ expectations of retailers and brands. The waves of changes spread from category to category, channel to channel, region to region, and generation to generation to the point that digital shopping is nearly ubiquitous today.
Consumers’ expectations related to voice-assisted shopping will follow a similar journey, although the change will be much more rapid and will more seamlessly traverse all generations. One of the most noteworthy attributes of the voice assistant is that it appeals to all generations due to its natural interface — consumers simply talk and the voice assistant does what is asked.
Although the use of smart speakers and voice assistants for shopping is fairly nascent, its growth will be rapid. By 2019, consumers are forecast to use more than 190 million devices with voice assistants such as Amazon Echo and Google Home, not to mention those accessible through mobile devices or other touchpoints such as vehicles with integrated voice capabilities. Although reasonably small in the grand scheme of retail sales, the associated addressable market for voice commerce is predicted to be $35 billion by 2020.
These positive signs inspired progressive retail and brand companies to ramp up their experimentation with voice capabilities in 2017. By August of last year, there were more than 20,000 app-based voice skills, of which 40 percent were developed between June and August.
One of the most important factors that jump-started growth in voice technology took an important leap forward. Namely, word accuracy improved from less than 80 percent in 2014 to greater than 95 percent (the human accuracy threshold) in 2017. This advancement significantly improves the user experience. Today, leading smart speakers are able to understand most accents and diction, providing a reasonably good experience.
What’s working in apparel and what’s not?
Shoppers are responding. According to a Capgemini survey, 51 percent are already using a voice assistant (81 percent via mobile devices and 25 percent via smart speakers), 86 percent are satisfied with their experiences making purchases via voice assistants and a shocking 24 percent say they’d rather use a voice interface.
Although there are many reasons shoppers cite for their positive attitudes about voice assistants, the top two are that they perceive the interactions to be faster (49 percent of respondents) and more convenient (47 percent of respondents). Active users of voice assistants predict that 18 percent of all their purchases will be via voice within three years, our survey revealed.
Early use cases suggested that shoppers would be primarily interested in purchasing consumable products via voice, but consumers actually express interest in using the technology for all types of purchases. In fact, we found that 46 percent are interested in using them to purchase clothing; however, 54 percent are concerned about not being able to visualize their selections.
Future opportunities for retailers
Retailers and brands need to think about points of friction across the value chain and explore how voice assistants might be used to make things easier and more convenient for shoppers. For example, how could the technology be used to provide service inside and outside of stores?
Twenty four percent of shoppers said they would prefer to interact with a voice assistant over a sales person in a store, 49 percent would like to check the delivery status of their orders, 40 percent want to provide feedback on product and services, 40 percent want to access customer support and 34 percent want to recommend products to others.
The technology could be used to augment the in-store experience, provide style tips and recommendations, share reminders, create community connections and so on. Voice assistants could also be a powerful tool for retail operations ranging from supporting employee collaboration, providing real-time access to help or sharing trending fashions.
Retailers and brand companies who choose to be leaders in this space need to embrace voice across their enterprise. If the IT department builds voice capabilities in a silo, then adoption will likely mirror that of QR barcodes and beacons — dismal. Rather digital, marketing, stores, supply chain, merchandising and IT all need to come together to imagine and build comprehensive, contextualized, voice-enabled customer experiences. They need define their strategy ranging from their brand voice, to research and development, to customer and employee-facing experiences, to testing and measuring business performance.
In a separate Capgemini survey, shoppers in the U.S. said that retailers who offer voice assistance could improve their Net Promoter Score (NPS) by up to 25 percentage points. Early movers will have the advantage as they’ll simultaneously build their organizational muscle in this channel and win the loyalty of their customers.
Shannon Warner leads Capgemini Consulting’s North American retail practice.