Retail

Alexa, What's The Future Of Voice Commerce?

The present tense for voice commerce shows an eager and accelerated installed base with 90 million devices in the U.S. But as with everything digital these days, the future is a lot closer than it used to be. And the future for voice commerce will depend on artificial intelligence (AI).

Because AI makes so much more data available voice commerce will become more conversational and in the process more suited to commerce. For example, a current voice commerce app from Sephora can ask a shopper about her skin tone before recommending a purchase for makeup. But the future will see even more technical innovation and more consumer usage. We’ve identified three areas where voice commerce and AI will intersect and change the voice commerce landscape.

The first is for small to medium-sized businesses (SMBs) in retail. According to Peter Peng, CEO of voice commerce platform Jetson, part of what he sees as a mass proliferation of AI will include SMBs. The first reason for that is simple market development. Larger enterprises and retail chains have already started their voice commerce journey. But Peng sees AI making voice commerce available to smaller companies and he’s even bet a joint venture with Shopify on developing this area.

“If you've ever done business with a large enterprise you know that they move slowly,” Peng says. “So, where I see voice commerce, going in the next six months to a year from now, is that there’s going to be a lot of SMB and smaller online retailers that can really easily get up and running, especially with in minutes with our platform, and be able to start selling on these channels with really minimal lift on their end. I really feel like being able to capture that SMB market with voice is definitely the right step. And it’s certainly where it’s going. I think certainly going to proliferate faster in that segmentation of the market than it will for enterprise clients.”

The second area is that enterprise level because things are about to get feisty between two of the biggest enterprises in the world: Google and Amazon. Both have made bets on the hardware side (Alexa for Amazon; Home and Nest for Google) and both have a rabid developer community that is building AI into all future apps, moving toward a conversational capacity. The race is on between the two as the stakes include the $40 billion voice commerce market.

“Increasingly, people are using the voice platform smart speakers and their assistants on their phones can do things like search for product information, ask questions about products, and even make purchases,” says Dana Gibber, chief innovation officer of voice commerce agency ForwardPMX. “And as those queries continue they evolve in complexity and also in volume. The AI component of the platform is really important because consumers have high expectations. They're looking for very specific things specific type of information and they will start to answer questions that have a specific intent. And so AI is really essential at teaching the platforms how to provide the best and most accurate responses based on what the user intended.”

Which leads to the third development to watch for the future of voice commerce, and it too involves Google and Amazon. Here it gets a bit technical. The queries posed to a smart speaker enter what’s called a knowledge graph where the answers are found and then delivered back to the consumer. Each company has its own proprietary knowledge graph. So when a consumer says “Alexa, find me a new pair of running shoes,” it goes to the Amazon knowledge graph and that graph will push a response for those running shoes as well as an Amazon seller to buy them from. The same scenario goes for Google, its devices and its graph. But the rub happens when the Google graph has to respond with shopping recommendations. Due to the market share and query volume that Amazon has over Google, Amazon has a built-in advantage. That makes voice search the next battleground for Google, and it finds itself in an unfamiliar position: second place.

“When the volume of overall search shifts toward voice, all of a sudden you have Amazon being an important player,” says Gibber. “The last numbers I saw for text queries show 25 percent of all voice queries happening on the Amazon platform. So as, as the volume of overall query becomes more voice-originated Amazon is cutting into Google dominance in overall search. And so I think … they’re already competing with Google, eating into overall Google search volume. Voice Search optimization will open up a whole set of things that brands are doing with agencies that feature issues like optimizing for voice on both the Amazon platform and on the Google platform.”

The winner gets a portion of the future of commerce and a piece of the newest area of Digital 3.0.

——————————

NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

TRENDING RIGHT NOW