The next iteration of four walls and a cash wrap might just talk back.
Despite the “chicken or the egg”-like conundrum of whether voice assistant devices are proliferating because so many of them are being made — Amazon, Google and Apple have released rival versions — or because consumers were demanding a speaker that would listen, smart speakers don’t appear to be a fad.
A new report on Amazon’s artificial intelligence-enabled devices and voice commerce from L2 Research has the number of Americans using some type of voice assistant device growing by 129 percent this year. That means at least 36 million people will be asking for weather reports, checking their calendar appointments and, yes, shopping, all through conversations with this new wave of devices.
But shopping hasn’t yet become the main use of the devices in America, with only 25 percent of Amazon Echo owners having so far asked Alexa, the device’s artificial intelligence program, to add an item to their shopping list, and only 20 percent having asked Alexa to make a purchase on their behalf, according to L2.
At the moment, Alexa devices are used primarily as music players and to control a user’s home lights.
That’s likely to change as people become more accustomed to the technology and as the technology itself advances. L2 expects “voice-based commerce will become a significant sales channel in the future, particularly in categories that require frequent product replenishment.”
Although the L2 report focuses on America, where Amazon at the start of 2016 had about 305 million active users, its conclusions could easily extend to the rest of the world.
Alibaba, the operator of Chinese marketplace Tmall, counts roughly 450 million active users, and founder Jack Ma hopes to serve two billion consumers worldwide in less than 20 years.
To help hit that lofty goal, Alibaba on Wednesday launched a beta version of its own voice-controlled device, dubbed the Tmall Genie, which marks not only Alibaba’s first “smart speaker,” but the first fully functioning smart speaker option for Chinese consumers.
While Amazon’s Echo is technically available in China, its services can run up against regulatory issues, and although it launched its Prime membership program in the region late last year, it enjoys nowhere near the popularity of Tmall.
Google has famously had difficulty operating as a search engine in China, shutting down entirely for a time in 2010, and has also had trouble with Home operating fully, given the restrictions on its services imposed by the country’s government.
That could help explain why Alibaba is launching the Genie only in China and has it set currently to only operate in Mandarin.
The 499 yaun price tag for the Genie also appears to be by design. Amazon’s Echo sells for $120, while Google Home typically sells for $129 and Apple’s HomePod, set to hit the market in December, will retail for $349.
Even though Chinese consumers could grow the conversational commerce market exponentially over the coming years, it’s not yet clear how users will interact when it comes to apparel.
Brands are only now truly getting used to operating on social media and through search engines. And voice assistants represent wholly new challenges, which again could upend the market and how fashion operates.
While a typical search engine like Google is meant to give users a full list of what they may possibly be looking for, Alexa is designed “to be conversational” and as such, its algorithm responds to a search query with “two products” instead of 10, according to L2.
And these two products are most often either “Amazon’s Choice” products, which meet a certain criteria of the company, or those already among its bestsellers, L2 found during a recent trial period, meaning “the top-ranked search result benefits disproportionately from its position.”
Although this will present certain products with an unfair advantage over others, and likely mean shoppers will have easy access to fewer and fewer brands, retailers are already looking to conversational commerce as the next advancement in consumer-driven technology, so figuring out how to game a voice assistant system has got to be next.
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