Ecosystems

Alexa’s Expanding And Advancing Ecosystem

Amazon seems to have a lot to be merry about this holiday season. As of holiday 2017, three-quarters of all Americans are Prime members, and Amazon could account for up to 44 percent of all online commerce in the U.S. (4 percent of total retail). According to some estimates, the eCommerce giant was home to 50 percent of all online sales made on Black Friday this year.

Plus, it’s hard not to feel pretty confident going into the shopping season when the mere mention of the word “Amazon” strikes more fear into the hearts of retailers (and their investors) than Santa strikes in the hearts of naughty children worried about getting coal in their stockings.

But while there is much for Amazon to be enthused about during holiday 2017, Alexa (and the family of devices Amazon offers to bring “her” to your bedside) has managed to stand out as the star of the pageant so far, with Amazon touting the Black Friday/Cyber Monday holiday weekend as its “best ever” sales period for Amazon devices.

“Customers purchased millions of Amazon’s Alexa-enabled devices this weekend, and Alexa devices were the top sellers across all of Amazon,” said David Limp, senior vice president of Amazon Devices & Services. “We’re excited that tens of millions of customers around the world will be using Alexa to prepare for the holidays.”

And, to aid in those preparations, Alexa is not just adding new skills, but is also making it easier for third-party players to make those skills more personalized and useful. You can even get Alexa to save you from an awkward dinner conversation or two this Christmas season, by asking her to change the subject.

And, if Echo devices had as good a day as they seemed to have on Black Friday, perhaps Alexa will have a chance to keep the peace at many holiday gatherings.

 

The Black Friday Device Blow Out

As is their eternal custom, Amazon offered almost no specific figures on its holiday shopping weekend sales performance — other than a few flashes of color, of course.

Which isn’t to say those flashes weren’t interesting or informative.

In the annual Black Friday/Cyber Monday post-mortem, Amazon announced that this was its best year ever in terms of devices sold — though “millions” was as specific a number as they were willing to place on it. Amazon also noted that the Alexa-enabled Echo Dot and Amazon Fire TV Stick with Alexa Voice Remote were the bestselling Amazon devices sold in 2017, and the bestselling devices overall on Amazon.com during the holiday shopping weekend.

Amazon notably softened up that ground with deep discounts on both products: Echo Dot was down to $29.99 on Cyber Monday, while the Fire Stick TV clocked in at $24.99 — about half the price of its nearest competitor, the Roku streaming stick.

Dot, notably, also got considerable “real-world” exposure, as Amazon also noted that it was a bestseller at its Whole Foods locations.

It is not known exactly how many tens of millions of Alexa-enabled device users are out there, though some estimates put the number in the 20 million range as of Q3 2017.

A number that sounds like it may have gone up considerably as of the last few days.

 

New Skills

With more Alexas on the market, there will be new skills on offer — and possibly more customized and personalized versions of some of the skills that are already available.

Alongside the sales news on Alexa-powered speakers this week, Amazon also announced that it will be opening up Alexa to let skill developers create customer notifications.

During Amazon’s re:Invent conference in Las Vegas yesterday (Nov. 28), Amazon noted that Alexa skill developers (of which there are now 25,000, according to Amazon) will now be able to engage customers beyond using voice commands, with developers having the capability to access things like lighting and audio cues.

The LED light on Alexa-powered devices can be flipped green, for example, if there is an update from one of a user’s chosen Alexa apps. According to TechCrunch — using a cue like “Alexa, what did I miss?” or “Alexa, what are my notifications?” — the user can then access the pushed content.

Shopping, news, food and weather services on Alexa devices already use this service — but starting now, Alexa’s entire developer pool has been formally invited to apply to access the expanded range of services.

And, Amazon noted, those expanded capacities will soon be combinable with another new feature recently added to Alexa: Amazon’s Your Voice technology, which is designed to allow Echo devices to recognize different users’ voices and tailor the experience based on who is asking.

“Once you set up the feature, Alexa will learn your voice (versus your spouse/partner/roommate’s voice) and be able to deliver a more personalized experience,” a company spokesperson noted.

Initially, however, Your Voice only worked with Amazon features, like Music and Shopping.

As of yesterday, however, Amazon announced that third-party developers will also be able to access the voice recognition tech, and use it to build more personalized experiences into the skills they program for Alexa.

The move also allows Amazon to once again slightly edge out ahead of Google in the war for voice-activated home assistant dominance. Google launched multi-user support using voice recognition back in April, nearly six months ahead of Amazon’s announcement of the feature. As of yet, however, it has not announced third-party app integration for the feature.

 

What’s Next

One interesting footnote to all of Amazon’s feel-good news out of Black Friday and Cyber Monday is a piece of good news that the company did not announce. While sales of Amazon devices reached record highs during the holiday sales rush, Amazon did not note that its sales in general were record-breaking, for either 2017 or Black Friday in general. That is an interesting result, given the 50 percent of Black Friday online sales they are estimated to have snapped up and the fact that Cyber Monday saw record-breaking sales of $6.59 billion.

Perhaps some other online retailers are figuring out how to chip away at the Amazon effect.

But Amazon has Alexa — and right now, it is owning the voice market for smart speakers.

Strategy Analytics estimates that 68 percent of smart speakers will be powered by Alexa by year-end, and that’s the conservative estimate. Some projections put that number at an even higher market share of 76 percent.

There are many emerging challengers to that throne: Google, most notably (and Apple less so) — and Amazon wants to make sure the climb to challenging their throne is a steep one.

And getting steeper, as developers increasingly focus on building the next generation of payments and commerce opportunities, innovations that can be unlocked with the sound of one’s voice.

PYMNTS, in fact, is inviting those developers to do exactly that with the 2018 Voice Challenge with Amazon Alexa. We want to see how the nation’s top innovative teams take on points of friction and security problems, and how they are adding value to a service to which the majority of Americans are still getting accustomed.

But, as this holiday’s results and a building mountain of data show, they are getting more used to it every day, and more enthusiastic about embracing it.

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The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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