Alexa’s Expanding Ecosystem

Amazon connected

When Alexa was first introduced in November 2014, it didn’t look much like the next big thing in user interfaces. There wasn’t very much like it in the market at the time — both in terms of design and function — and there was little in the way of guarantees that the product would mature into a hit.

The existent product, the Echo, was a cylindrical speaker that most often reminded consumers of a high-tech Pringles can. Even though Siri had been around for a few years,  a standalone device that was navigated wholly and entirely by a user’s voice was a new concept. It wasn’t also widely available at first — the first release of Alexa-enabled Echos on the market in late 2014 was only available to Prime members by invitation; the general release wasn’t until July of the next year.

It also didn’t do that much then either. And that’s not our opinion at PYMNTS, that comes from Amazon’ Senior Vice President of Devices and Services David Limp in a recent conversation with CNBC, who noted that in its earliest instantiation, Alexa could do two handy things for the consumers in the home: play music and turn the lights on and off.

But, he noted, even in the earliest days, Amazon, with Alexa, understood that what voice could be in the future with more adoption and development, something that it has become a little over six years after that initial, very primitive, launch.

“We see voice as a new paradigm for an ambient user interface. We don’t think this is going to replace the phones that everyone knows and loves, but instead gives users a different way to interact with those around them,” Limp told CNBC.

Our sentiments, exactly.

And, as reports out of International Consumer Electronics Show (CES) this week — not to mention last year’s worth of expansions to Alexa — have made clear, it is an ambient platform that not only can live comfortably in the background of any number of consumer experiences, but one that can seamlessly tie them all together as consumers journey between them.

The Auto Expansion 

A year ago at CES, Amazon surprised the world with the introduction of Echo Auto — a device that essentially brought Alexa function to vehicles in which it was directly built-in.  Released first by invitation only in the U.S., consumers were given a broader opportunity to purchase the device in July, and, as of CES 2020, Amazon announced that Echo Auto is going global with its international release in 2020.

And that was just one of the many car-related announcements out of Las Vegas this week; by volume of initiatives and announcements, automobiles are an increasing focus and target for Alexa expansion.  That was more or less confirmed by Limp, who noted in his conversation with the CNBC that after the home, the car is, in many ways, merely the most natural expansion point for an ambient user interface that Alexa’s voice interface has to offer.

“It is an environment where we don’t want people looking down at their phones for safety reasons, and so voice becomes the perfect interface to listen to a book, play music, make a purchase or get information …  And I think until we get to full autonomous vehicles, which we believe is coming, but is a few years down the line, it is about how do we make the car more convenient for the driver,” Limp said.

And how to capture the $212 billion in commerce potential created by the roughly 135 million American adults that commute to work each day, according to the 2020 Edition of the PYMNTS Digital Drive report. Consumers, that by the numbers, are primed for a connected commerce experience given what it is they’re already doing on the ride: 51.2 percent are already conducting commerce while they are on the road and 54 percent order food ahead while they are on the road. Of that 54 percent, 66 percent said they would do so more often if more in-vehicle purchase options were available to them.

And Amazon, given its recent slate of announcements and recent progress, seems determined to help make that option available. In its most directly related to commerce announcement, Amazon announced jointly with Fiserv and Exxon Mobil earlier this week that the three have partnered to make it possible for consumers to pay with Alexa at the pump.

Consumers with an Alexa-enabled car, or who use Echo Auto or another Alexa-enabled device, will be able to say “Alexa, pay for gas” when they go to fill up at an Exxon Mobil station. Once Alexa has confirmed the station’s location and pump number, the pump will activate and Amazon Pay will process the payments.

And while Amazon is more actively pushing Echo Auto, it also seems to be expanding the roster of vehicles that have Alexa built-in from the ground up. This week  Rivian and Lamborghini both announced plans to bring Alexa to their vehicles — adding to a list of automakers that added Alexa to some models including Audi, BMW, Ford and Toyota. GM announced in 2019 that, as of the first half of 2020, Alexa would be added to the infotainment systems of its Chevrolet, Buick, GMC and Cadillac vehicles. It is also why Amazon has worked with third-party device makers Anker, Garmin and Nextbase to build Alexa-enabled devices for the car in the last two years — and why it added Telenav, TOMTOM and HERE to its roster this week.

And, if Amazon’s Vice President of Alexa Auto, Ned Curic, is to be believed — we may only be getting started with integrations with Alexa’s voice-activated technology in cars in 2020.

Curic was recently quoted as saying demand for Alexa’s voice-activated technology is “through the roof” as 2020 rings in.

“Two and a half years ago, we had nothing,” he told the network last week, following a tour of Amazon’s Seattle headquarters. “We’re much further than I thought we would be. I’m quite pleased with the speed we were able to build and deploy.”

Amazon is looking to jump on drivers’ increased desire for connectivity in cars and wants to develop a smooth exchange between Alexa at home and in automobiles. At the same time, automakers are working to improve the quality of voice recognition in cars.

According to Amazon’s chief evangelist of Alexa Auto Arianne Walker, the question for Alexa’s entrance into most cars is more a matter of if than when — as Amazon is  “essentially talking” with all major automakers on partnering in some form.

“It’s really more of a matter of getting things lined up for the cars that are going to be released as opposed to any hesitation,” she said.

And while automakers got much of the recent attention, it seems Amazon is running into less and less hesitation where Alexa is concerned — and in far more places than just the automobile.

The Double Device Ecosystem 

In the beginning, there was just one Amazon device — the Echo. It took a little over four years from Amazon’s Alexa to go from that one device to 100 million Alexa-powered devices on the market — but by early 2019 Amazon had done just that.

As of the start of 2020 — that number has more than doubled. As of Monday, Amazon announced that there are now “hundreds of millions” of Alexa-enabled devices worldwide — including the devices Amazon makes and the ever-increasing number of speakers, televisions, appliances, computers and wearables that are building in Alexa compatibility.

And, according to Amazon, more devices are breeding more engagement: the more Alexa can do and the more places it can do things from the more likely consumers are to interact with it. According to Amazon, consumers are using voice assistant smart home controls to run their heat, turn their lights on and off, and even start their coffee pot from bed in the morning.

Amazon also pointed out its recent smart home milestone passed in late December 2019: Alexa already integration into more than 100,000 smart home products from over 9,500 brands.

“It looks like an inflection year,” David Limp noted. “It’s been a very, very big year in terms of momentum for Alexa-enabled devices out there. We started with just being able to turn a light on and off, now we have over a hundred thousand devices and you can connect Alexa to your toaster oven and your ceiling fan.”

The power in that, he noted, is not just in what it allows Alexa to deliver to consumers in terms of service,  but also in what it allows Alexa to learn about consumers driven by how they interact. Alexa, he noted, gives them a direct window into what people are interested in and how they are involved in interacting: from the kinds of searches they perform to how they locate their enabled devices in their homes.

“An easy example is we quickly saw that half of all Alexa users were using it to find recipes and so we built skills and function around that. You wouldn’t know to purse that unless you had the experience of seeing it in the data.”

Notable Expansions Out Of The Spotlight 

While the automobile and the expanding connected device ecosystem took center stage at CES, Alexa made a few other bold steps out in 2019 of note, particularly for those watching the consistent expansion of Alexa’s reach. Early last year, Amazon announced that Alexa was capable of launching HIPAA compliant skills and that it was partnering with various healthcare firms to build capability for Alexa to make appointments at urgent care facilities, track prescription drug shipments and provide doctors with the information once a patient is released from the hospital.

Early 2019 also saw Alexa partnering with Cedar Sinai hospital to pilot smart hospital rooms with custom programmed Echo units for patients.

“Patients young and old are now used to voice-activated devices in their homes. Since it’s familiar to them, it helps enhance their hospital experience,” Peachy Hain, Cedars-Sinai’s executive director of medical and surgical services said of the program. “In the hospital, patients have little to distract them from pain or loneliness.”

The latter half of the year saw more HIPAA compliant Alexa skills rolling out for consumer use — including services to make it easier for seniors and their care providers to better manage their care or even simple medication reminders that Alexa can now deliver to patients who want them.

And healthcare wasn’t Alexa’s only somewhat unexpected expansion of 2019. As summer was fading into fall, Amazon announced that Alexa was officially being folded into the bill payments flow.   Talking to Karen Webster about the decision to tie Alexa into their new bill payment offering, Amazon Payments chief Patrick Gauthier noted that from where they stood, the voice and bill payments were a natural fit.  It preserves the consumer’s preference for maintaining choice in when and how they pay their bills, he noted, while also providing an easily accessible source of information about them so that customers can better plan for them. And though those payments are starting with utility bills, he noted, the goal is to expand the program, and Alexa’s reach within it, sooner rather than later.

“We will watch what the customer does, listen to what they tell us and see how we can evolve it to their needs. When we keep that as our North Star, we can augment what we have available today, and raise the bar from a community standpoint,” Gauthier told Webster.

And though Gauthier was talking about bill payment at that time, his attitude echoes through many Amazon officials about voice — and where it is going in 2020. As is their custom, Amazon has had few specifics to offer about what comes next. Though, as Amazon’s David Limp noted, it will be based on what the customers are responding to today and what they think will be resonating with them tomorrow

So what comes next for 2020? Some of it is predictable: We imagine a lot of connected car announcements in the near future. Some of it will likely be unpredictable up until the moment it is announced — no one was talking about Alexa as a bill pay tool at this time last year. And some of it will fall somewhere in between: we likely will see more healthcare expansions, though what those will look like is still a known unknown.

But if the past is a prelude and if Amazon’s officially hints are to be believed, there will be no shortage of things to watch. If 2019 is any guide, by the end of 2020, we might be surprised how small the Alexa ecosystem was when the year first kicked off.