Alexa and Google Assistant Have a Problem: People Aren't Sticking With Them After Trying

The problem, to be precise, is that retention equals monetization. JL

Jason Del Rey reports in Re/code:

69 percent of the 7,000-plus Alexa “Skills” — voice apps, if you will — have zero or one customer review, signaling low usage. What’s more, when developers for Alexa and Google Assistant, get someone to enable a voice app, there’s only a 3 percent chance the person will be an active user by week 2. For comparison’s sake, Android and iOS apps have average retention rates of 13 percent and 11 percent,

Amazon Echo and Google Home were the breakaway hits of the holiday shopping season. But both devices — and the voice technologies that power them — have some major hurdles to overcome if they want to keep both consumers and software developers engaged.

That’s one of the big takeaways from a new report that an industry startup, VoiceLabs, released.

For starters, 69 percent of the 7,000-plus Alexa “Skills” — voice apps, if you will — have zero or one customer review, signaling low usage.

What’s more, when developers for Alexa and its competitor, Google Assistant, do get someone to enable a voice app, there’s only a 3 percent chance, on average, that the person will be an active user by week 2, according to the report. (There are outliers that have week 2 retention rates of more than 20 percent.) For comparison’s sake, Android and iOS apps have average retention rates of 13 percent and 11 percent, respectively, one week after first use.

“There are lots of [voice] apps out there, but they are zombie apps,” VoiceLabs co-founder Adam Marchick said in an interview.

Amazon and Google spokespeople did not respond to a request for comment.

The statistics underscore the difficulty Amazon and Google are having in getting Echo and Home owners to discover and use new voice apps on their platforms. Instead, many consumers are sticking to off-the-shelf actions like streaming music, reading audiobooks and controlling lights in their homes.

Those are all good use cases for the voice platforms, but not sufficient to build an ecosystem that will keep software developers engaged and lead to new transformative revenue streams. As a result, the numbers highlight the opportunity for Amazon, Google or others like Apple to stand out by helping both consumers and developers solve these discovery and retention problems.

These issues aren’t surprising, Marchick said, when you consider that there are no voice prompts such as push notifications for this new class of apps. He believes that voice apps that allow people to communicate with friends or family through the devices, or connect with social network contacts, will be popular.

VoiceLabs sees opportunity. The startup predicts that 24.5 million voice gadgets like the Echo and Home will be shipped in 2017, up from an estimated 6.5 million last year. But software developers of voice apps currently get limited usage data from Amazon and Google, leaving an opening for an analytics service.

Hundreds of Alexa and Google Assistant developers are currently using VoiceLabs’ service to get insights like how well they are retaining new users and which of their features are being used, Marchick said.

The startup isn’t charging for its service yet, because developers currently don’t have a way to make money off of their voice apps. VoiceLabs expects either Amazon or Google to introduce a way for developers to monetize these apps in the first half of this year — perhaps by charging consumers directly.

VoiceLabs was founded by Marchick, the former CEO of marketing software startup Kahuna, and Alex Linares, who spent nearly seven years at Yahoo, most recently as a senior director of product management.

The startup was incubated last year inside The Chernin Group, which is also funding the startup, as it became clear that Amazon was really onto something with the Echo and Alexa and that other tech giants were going to invest big in voice platforms as well