The Reason Amazon Is Advising Retailers To Prepare For Voice Commerce

Amazon is desperately trying to get more consumers to use its Echo devices to make purchases so that it can capture more data and revenue. Which means its prediction should be viewed through the lens of its own self interest.

But, given its market clout, that may be enough to push more consumers to use the technology, so merchants should be prepared, if not in a rush to embrace the possible trend. JL

Lisa Lacy reports in Ad Week:

39% of U.S. customers have said they will be using voice devices to shop in the next three years, and 20% are ready to make voice purchases now. 25% of Chinese consumers use voice technology to make payments for online purchases. Only10% of U.S. customers are using smart speakers to make purchases. (But) like retailers couldn’t move their online experiences to mobile and had to create new experiences, so it would be unwise to reproduce what they already do elsewhere for voice.

While the history of voice recognition technology dates back to IBM in 1961, the modern era of voice didn’t start for another 50 years when IBM Watson won Jeopardy! and Apple debuted Siri. But even that marquee year, 2011, was almost a decade ago now.

Nevertheless, Patrick Gauthier, vice president of Amazon Pay and a speaker at the National Retail Federation’s 2020 conference in New York this week, said this is the moment for retailers to embrace voice commerce. To date, Amazon Pay has helped vendor partners like Atom Tickets, TGI Fridays, 1800Flowers, Woot and ParkWhiz do just that by integrating services with Alexa.

“Voice is not new—you’ve been talking to your car with frustration for at least a decade—but it’s not going away,” Gauthier said.

And neither is voice commerce.

For starters, voice-enabled shopping is no longer limited to a particular device. Plus, the technology boasts inherent advantages like ease of use.

But, like any technology-driven shift in consumer behavior—like, say, the internet around 1994 and smartphones circa 2006—it’s going to take time for both customers and brands to adjust. So, Gauthier warned, retailers would be wise to remember their predecessors who didn’t think online or mobile shopping would take off if they feel skeptical about voice shopping now.

And, he said, much like retailers couldn’t simply move their online experiences to mobile and had to instead create new experiences, so, too, would it be unwise to reproduce what they already do elsewhere for voice.

According to Gauthier’s figures, there are hundreds of millions of Alexa-enabled devices in the world now that customers use daily—and, every year, customers have “tens of billions of dialogs” with voice assistants.

Gauthier said 39% of U.S. customers have said they will be using voice devices to shop in the next three years, and 20% are ready to make voice purchases now.

“Innovators and early adopters are already there. This is the time to engage with them,” he added. “Innovators and early adopters will work with you. They don’t expect it to be perfect. They will give feedback. … If you wait for it to go mainstream, you’re too late.”

Plus, voice presents an opportunity for more natural interactions with customers, who typically talk much faster than they type.

“The fact you can interact faster and on more natural terms opens opportunities to untether customers from knowing how to use a device to engaging on their own terms,” he said. “It’s the first step to establishing a relationship and making commerce human again.”

To start, brands and retailers need to ensure their voice assistant has context for user interactions—so, say, if a customer asks a question about a product then has a follow-up, the assistant can help without asking for additional information.

“[An assistant] has to know the context of the conversation we’re having,” he added.

And while tech consultancy Juniper Research said there were more than 574 million voice assistants in the U.S. at the end of 2019, that’s mostly on smartphones. Smart speaker adoption is lower—around 63 million devices in the U.S. as of 2018. What’s more, only about 10% of U.S. customers are using smart speakers to make purchases. That’s according to figures previously shared by Benjamin Condit, chief strategy officer of Mindshare China, who noted that 25% of Chinese consumers use voice technology to make payments for online purchases.

So while marketers have spent the last 10 to 15 years thinking about keyword relevance to win in display ads and emails, Gauthier argued the next decade will be about contextual relevance, which he described as, “At the moment a customer is interested in information, am I there and do I understand what they mean?” adding, “If you don’t, you will be commoditized.”

Being ready in those moments is important: Gauthier said 30% of customers ranked the ability to purchase in the moment as one of the top five reasons to purchase through voice.

“‘In the moment’ means when the customer thinks about it, you’re there for them,” he added. “Customers don’t think in terms of shopping journeys. They think, ‘Here’s what I’m looking for now.’ You need to think about how to service those moments.”

And, to start, that means retailers need to listen to customer care calls and to frontline associates—wherever they are helping customers is an opportunity to do something with voice technology, Gauthier said.

In Amazon’s case, it found customers were asking about what happens post-purchase, which is why it created delivery notifications, Gauthier said. Customers were also looking for help prior to purchases, which is why Alexa has shopping lists and reminders.

Not surprisingly, Gauthier also said trust matters in voice—and is fundamental to the advancement of the technology, as 69% of customers say they purchase more from sellers they trust.

“Especially with technology, customers want to trust what you’ll do with their data [especially after] they’ve invited you into certain private settings,” he said.

Without trust, brands and retailers can’t build relationships with consumers and find themselves replaced by a similar product or service.

“If you have the relationship, customers will come back,” Gauthier said.