In Part 1, Status of Voice and Virtual Assistants, we looked at the smart speaker market driving adoption of the voice user interface. The ubiquity of the voice-interactive virtual assistant, now on 100 million smart speakers and 2 billion phones and other devices, coupled with really significant advances in the performance of speech recognition and natural language understanding technologies has made the voice capable of being the everyday user interface to our devices. (If you missed Part 1, it can be found here).
In this Part 2, we explore voice shopping expectations and hype, as well as how major retail and brand CMOs are viewing the opportunity.
Voice UI Usage Growing Dramatically
The optimists in voice R&D used to say that “next year would be the year that users really start using voice”. And they said that every year starting in the early 1990s. Although the technology was suitable for solving many important tasks, the market evolved slowly. Sprint Voice Command, deployed nationwide in 2001, had several million users dialing their mobile phones by voice everyday, particularly in the car. A great performing and very useful point application. But voice was not ready to be the user interface for general applications.
Fast forward to today. Technology capability has improved dramatically, speech recognition combined with natural language understanding leading to Google Assistant correctly answering 93% of questions in a recent test. And people are embracing voice on their devices.
Voice Assistant Usage Growth Drives Voice Shopping
There are lots of statistics that indicate that the voice user interface has reached critical mass. In the chart below, eMarketer reports that over 110 million users in the US using a voice assistant at least monthly. And PwC’s survey in 2018 found that 65% of 25-49 year olds reported that they talk to their voice-enabled devices every day reports. Statistics and projections are often misleading, but the clear trend is that people are interacting with their virtual assistants by voice for an increasing range of uses.
$40B Voice Shopping Projected by 2022
Back in February 2018, OC&C projected that voice shopping would reach to grow from the then current $2B to $40B by 2022, driven by the surge of smart speakers.
Since then, many of the newer smart speakers have added screens. Thus, they combine the audio and video output of phones and tablets, but with the UI based on voice input and and virtual assistant. This is a major change that will impact voice shopping for categories where visual feedback is important. And, as said previously, smart speakers are only a small fraction of devices with voice virtual assistants and the majority of those other devices–phones and tablets–already have screens.
Voice Shopping Influences Much Larger Percent of Shopper Journeys
OK, let’s give that some perspective. For 2019, according to Digital Commerce 360, total global online sales are $3.4 trillion, about 16% of $21 trillion total retail sales. So, $40B voice shopping is about a 1% share.
However, 1% is misleading. If we look at the entire customer journey, from initial research to purchase, reviews/ratings, support and reordering and consider all the purchases where voice interaction with a voice-interactive virtual assistant will be in the loop, the amount of purchases that will be influenced in part by voice shopping is much larger than that 1%.
The reasonable conclusion is that the actual purchasing by voice will continue to be only a small percentage of e-commerce for the foreseeable future. But, the use of voice in various parts of the shopping journey will be significant percentage very soon. The use of voice in daily activities has reached critical mass and will continue to grow rapidly. Retailers and brands ignore this trend at their own risk.
The CMO View of Voice Shopping
CMOs are recognizing the need to prepare their brands for voice shopping. A major Adobe survey of CMOs in 2019 in COM.com found a consensus that we have reached a tipping point as as more and more consumers use voice services consistently. Just like with their adoption of mobile, time is of the essence. Consumer and brand adoption is similar to mobile circa 2007, quickly moving into the mainstream.
“Voice technology is quickly becoming the status quo for brands looking to reach and better engage consumers. The numbers make that clear: According to a new study by Adobe Analytics, 91% of 401 business decision makers surveyed said they already are making significant investments in voice, and 94% said they plan to increase their investments in the next year.”CMO.com, 2019
CMOs surveyed clear: Brands are experimenting now. And the driver for voice commerce is simple — the ability to drive conversion and revenues. The companies who have deployed voice shopping report that voice is a differentiator and can be a strategic competitive advantage.
Next Voice Shopping Article:
In the next article, The State of Voice Shopping, Part 3, we will review the reality of voice shopping deployed today, what’s next, and consider how brands are investing.
Mike Krasner is a co-founder of Vioby, a Boston-area developer of AI-based marketing automation tools for e-commerce retailers and their agencies. Leveraging their extensive background in creating and deploying enterprise-scale voice-interactive systems, Vioby is now developing voice shopping for retailers and brands. Click here to learn more about Vioby.