It’s good to talk – and it’s going to be really good for retailers to let customer talk to them. Paul Skeldon, Mobile Editor, InternetRetailing, investigates how voice is changing customer interaction.
A fifth of US shoppers have made a purchase with a voice-controlled personal device, such as a Google [IRDX VGOO] Home, Amazon’s [IRDX RAMZ] Echo and Alexa, or, if they have deep pockets, Apple’s [IRDX RAPL] Siri-enabled HomePod this year, according to research by Walker Sand. This number goes up to 43% amongst millennials.
Investment firm Mizuho, goes further, predicting that revenue generated by the Amazon Echo and Amazon Alexa services could exceed £8.37bn ($11bn) by 2020. The firm also predicts that £3.04bn ($4bn) of that would come from the sales of the Echo device itself (including the Tap and Dot), while the other £5.33bn ($7bn) would come from all the commerce transactions derived from those devices to Amazon.com.
This has serious implications for retail. Not only are shoppers wanting these devices in their home to help them do all manner of things from play music to finding recipes to shopping, but they are also starting to expect retail apps and retail websites – especially on mobile – to also be voice controlled.
Some of the forward-thinking retailers are already starting to exploit these home devices, but for the majority who are still struggling to deliver a good mobile user experience, it is simply seen as a bridge too far. But they ignore voice at their peril. Voice is calling, and retailers need to answer.
FOOD FOR THOUGHT
Amazon Echo users are already well-used to asking Alexa to ‘order dog food’, through Amazon Prime. This is obviously good news for Amazon, but bad news for other sellers. But third-party stores can literally upskill to ensure they don’t miss out.
Companies such as Just Eat [IRDX RJEA] have created app-like ‘Skills’ for the Echo to re-order takeaways. ShopSavvy even tells shoppers if a particular product is on sale at a particular store. That means if Echo users ever leave their couch again; they at least won’t have a wasted journey.
“Alexa is changing the way we search for goods and services,” says Lorna Crowley, Head of Marketing at Engage Hub. “Through one simple command Alexa can order you a pizza right to your door or tell you where to buy that dress you have your eye on for your summer holiday (most likely Amazon). But, the real question for businesses is how do they respond to this? How can they ensure they prepare for the voice evolution and adapt to the way their customers want to interact with them? Are some industries adapting faster than others or have they all already woken up to the reality that the customer communications landscape is being modified; and that the likes of Siri, Cortana and Alexa are responsible for this change?”
One of the leaders in this space in the UK is Tesco [IRDX RTSC], which has teamed up with Google Home to allow Home users to add things to their Tesco shopping basket via voice. According to Paul Wilkinson, Head of Technology Research at Tesco Labs, the system not only listens to what you say, but can refine the list by referring also to your ‘Favourites’ and ‘Most frequently purchased items’ in the Tesco grocery app. “It prioritises these in the search results and so can be very specific on the products it adds to their basket,” he says.
These moves to voice control do more, though, than just add a new channel to market for retailers, they also mark a fundamental shift in the grocery business. The move by Tesco to use voice not only taps into the growing move towards how these smart devices play a role in retail, but also it marks a cultural shift in retail: Tesco is now allowing its customer to access it through Google.
REAL RETAIL GAME CHANGER
Amazon’s Echo already allows users to add things to their Amazon Prime accounts, but the move by Tesco is the first time that a major retailer has used someone else’s interface to buy – and it could have an unwanted downside.
According to Hugh Fletcher, Global Head of Consultancy and Innovation at global digital consultancy Salmon: “The fact that Tesco is now promoting its sales through another retailer – Google – is a clear paradigm shift. Customers of Tesco are now accessing Tesco via Google. One thing that retailers and brands need to be wary of in a world of many interfaces is that branding and experience become less evident. As a result, this could pose a risk to existing customer loyalty and brand equity that they possess with customers. While Tesco is undoubtedly right to get into this space and get in there early, for the sake of its future, we must hope that Tesco has also considered its strategy for customer ownership, data ownership and Tesco brand loyalty, or face becoming a tier two retailer accessed via an interface which isn’t owned by them.”
The move also marks the growth of the ‘virtual ecosystem’ for retail, believes Fletcher. “As we see these virtual ecosystems grow and become more widespread, we are likely to see a battle commence between the digital assistants such as Google Home, Amazon Echo and the imminent Apple [IRDX RAPL] Home, as retailers and brands affiliate themselves with one or the other. Tesco is one of the first of what will inevitably be a long line of retailers making the decision to offer its customers a voice controlled service, removing the need for a cumbersome, physical interface and allow consumers to slot digital services into their lives with less disruption.
HOW DO YOU IMPLEMENT VOICE CONTROL?
With so much attention on adding voice to apps either on your phone or for home devices, how do you actually make it happen? Lorna Crowley, Head of Marketing at Engage Hub, talks through the first steps you need to make.
Quite rightly, customers and business professionals around the world are getting excited about natural language technology. The challenge now is creating a seamless customer experience that will keep them coming back for more.
The first stage in preparing yourself for the new frontier is early adoption. Your business needs to have a voice activated assistant. There’s plenty to choose from depending on your requirements so purchasing is the first step. Besides the obvious advantages of letting your developers experiment, setting up a device in your office can really help productivity for everything from scheduling a meeting to ordering stationary.
Ensuring your website and apps recognise voice-enabled searches is a very small piece of the puzzle but an important one. Implementing natural language understanding to deliver a seamless customer experience across multiple devices, that all talk to each other, will be the difficult part.
Another element of utmost standing is building trust. Trust is a key consideration at a time when customers are used to reading about high profile data privacy breaches on an almost daily basis. Amazon is currently developing speaker recognition features for Alexa so we may see a surge in biometric security to ensure that purchases and financial information are kept safe and secure – critical if consumers are going to adopt the technology and keep coming back. Keep a lookout for announcements to make sure you and your business stays ahead of the curve.
Finally, begin to think about integrating data from Amazon’s Alexa to deliver relevant messages via SMS, email or push notifications to customers on the move. For the time-being, Alexa is restricted to just the home, so consider how you can also combine geo-location technology with spending habit information from Alexa to create the ultimate digital experience for the ‘on-the-go’ consumer.
The fast moving, inquisitive and time poor consumer is who business is catering for. The need to anticipate their needs in order to stay ahead of the curve, remain competitive and attractive is integral. The customer communication landscape is being modified, business needs to move with these times and ensure the correct channels are accessible.
Where it gets interesting is that voice control is going to not only be the preserve of these devices, but also of all devices: it will be the way we interrogate the web. This means that voice control in retail is not just a matter of building out platforms that can handle voice inputs from these ‘home’ devices, but also to voice enable websites and apps.
This isn’t just fanciful thinking inspired by another Apple hoopla-laden developer conference, but something driven by the other big game in retail: engagement.
It has become accepted wisdom that, in the age of abundance, consumers want more of an experience from retailers. This has become so over-powering that now the majority of execs in retail boardrooms rate customer experience as more important than marketing and even sales as a priority.
Voice control, as it gains acceptance in the home, is going to become the driver of much of this experience on mobile when out and about and it is what is going to shape how retail in store and on the web works.
Research shows that people are willing to spend more and keep coming back for more if they get a meaningful experience. Voice interaction is likely to be one of the key drivers therein.
Right now, one of the most compelling reasons for adding voice control is that it puts anyone offering voice control in their apps way out in front of the competition, makes their app look more modern and garners a lot more attention. But it delivers so much more.
Adding voice control leads to better apps and interesting new ways for consumers to interact. There are voice controlled apps to talk you through your morning run, there are ones that can help you take a better selfie, you can even order a Domino’s [IRDX RDOM] in the US using voice. More interestingly, iTranslate will translate conversations in real time, taking the voice activated app into the realms of what was once science fiction.
But can the technology and retailers make this happen? While Apple entering the fray with HomePod in June came as no surprise – apart from perhaps its dreadful name and the fact that it looks a bit like some sort of elaborate air freshener – it does beg the question that to be truly useful – and for me and many others to even contemplate buying one – Siri and the voice recognition tech in all these devices needs to really up its game. Until that part of the process works, the rest of the points here are moot. And while consumer demand is there, the tech is lagging.
For instance, I asked “Siri, what is your impact on retail going to be?” and she coquettishly replied: “I’d rather talk about your calendar and dinner plans, Paul”