Have you used a voice assistant on your mobile device or smart speakers to make an online search? According to a survey conducted by VoiceBot in January 2019, 84% of users have searched online at least once using smart speakers. The AI-based personal voice assistant has seen an unprecedented adoption across all mediums, such as smart speakers, mobile, tablets, appliances and automobiles, which are now integrated with AI-based smart voice assistants. The customer base for voice assistant technology has been growing exponentially.
In January 2019, 66.4 million of 253 million American adults owned a smart speaker and 26.1% had made a purchase using the same. The number of monthly shoppers who use smart speakers to shop is estimated to be around 15%. If we calculate the annual revenue generated through voice-based e-commerce for an average basket size of $100 on mobile platforms and 10 million monthly active users, assuming they made at least one purchase in the month, the revenue generated is close to $11.95 billion. In 2017, the annual revenue for voice-based e-commerce was around $1.8 billion. From 2017 to 2019, the growth has been a staggering 564%. Various industry experts forecast the growth of the voice-based e-commerce industry to around $40 billion in the next two years (by 2022).
It is interesting to note the top categories that customers are buying using voice assistants. The perishable nature and frequency of order puts grocery segment at the top with a share of 20%. The next is entertainment, consisting of video on demand and reservations for movies, events and concerts, which forms 19%. Electronics comes next with a market share of 17%. The biggest surprise, however, is the next category — apparel — with about 8%. The presence of this segment proves that there is a need for a great deal more innovation to ensure customers have a seamless buying experience.
Customer experience, which is now considered more important than price and quality, is an area where retailers must work. Annual losses due to substandard customer service for US companies is around $62 billion. What do retailers lack that prevents them from attracting voice-based e-commerce customers? For most of retailers, the shopping process is still undefined in the voice medium. There is a lot of scope for designing the processes to suit the voice-based ecommerce. To tap into this ever-growing market, retailers need a robust strategy to align themselves with future customer expectations.
The biggest concern is whether physical stores will cease to be relevant in an increasingly digital retail world. Can voice-based assistants help create a unique customer experience in physical stores, thus making physical stores stay relevant? Virtual assistants can be used to assist customers in locating the product in a large store, making product comparisons and communicating regular updates for targeted offers. Store associates are usually very busy in large retail stores. This is where virtual voice-based assistants can help the customer without having to wait for human assistance.
The use cases for this technology have still not evolved to the extent where they can be categorized as innovators in the technology adoption curve. Voice-based assistants need to be integrated with the existing system to maximize the adoption and usage. The challenge faced in this integration is the absence of visual factors, since we depend more on our visual senses to decide. Our products need to be re-developed in such a way that search results obtained are not the same as what we get through a normal search. Voice-based search results should take the customer through the entire customer journey, from discovery of product to placing the order and all the way through after-sales support. This customer journey needs to be designed by retailers so that they can fully utilize the potential of voice-based commerce. In short, the voice-based commerce needs to be positioned as the voice of the brand and not just a normal search result where the assistant reads the top result. The business cases of online services or content can be utilized in a much better way using voice technology. Booking a ride, making regular monthly payments, ordering services, and booking appointments are some examples where voice-based commerce can take the lead — and disrupt the industry.
The concept of voice technology in retail is evolving. Baby steps are being taken toward integrating voice technology with the multi-channel retail experience. This has the potential to play a vital role in both the online and in-store retail experience of the future. To make this possibility a reality, retailers must design an ecosystem devised specifically to cater to the needs of voice-based commerce.