Study: Voice shopping will surge 1900% by 2022
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Brief:
- Voice shopping is expected to surge 1900% to $40 billion in 2022 from $2 billion today, according to data from OC&C Strategy Consultants. This will likely be driven by more consumers buying and using smart speakers like the Amazon Echo or Google Home, particularly younger families with higher incomes, per the firm.
- Amazon is poised to dominate the emerging channel with the largest market share, which is currently more than twice that of its nearest competitor. Amazon's Echo has 10% penetration of U.S. homes, followed by Google Home at 4% and Microsoft's Cortana at 2%.
- Users of smart speakers most commonly shop for standalone, lower value items like groceries, entertainment, electronics and clothing, the study found. OC&C studied the shopping habits of 1,500 smart speaker owners in December 2017, and recorded product sales for 2,000 products listed on Amazon.
Insight:
Voice is uncharted territory for most marketers, as it's still a nascent space. Right now, there's significant opportunity for brands to get on board with voice shopping and forge the way as more consumers purchase smart speakers and get accustomed to interacting with digital assistants.
Amazon is leading the pack in the space with the greatest market share, and it appears set to build on its first-mover advantage in selling smart speakers with its line of Echo devices that range in price from $50 to $230. The company is able to sell the products at a loss if it means getting people hooked on its e-commerce platform or registering them for a membership to its Prime service. Amazon's acquisition this week of smart doorbell maker Ring could further boost Alexa's shopping strategy by giving consumers a way to authorize access to their homes for deliveries.
Brands that are selected as an "Amazon Choice" on its e-commerce platform have a key advantage when it comes to voice shopping, according to OC&C. Products that have "Choice" status see boosted sales of a product by 3x, as Amazon continues its hold on swaying customers' buying decisions. Eighty-five percent of consumers select the products that Amazon suggests, labeled as "Choice" items.
Meanwhile, consumer goods marketers need to maintain Amazon's "Choice" status, even though those products change frequently (4%-5% daily) because of stock or delivery speed issues. Ensuring that products are easy to find is critical for consumer purchasing, as 69% of customers know the exact product they wish to buy before beginning a search. Tailoring search terms to ensure distinctiveness, such as "sensitive toothpaste," increases the chances that consumers will find a product and then purchase, OC&C said.
Apple has a lot of work to do if it wants to gain more market share in the smart-speaker market. The company delayed shipments of its HomePod, missing the key holiday buying season that Amazon and Google dominated with a variety of promotions and discounts. OC&C suggested that the Siri digital assistant needs a major upgrade in its artificial intelligence capabilities to keep apace with leaders Amazon and Google.
At this point, the rise of voice-enabled devices appears undeniable, and the growth of voice as a shopping interface has demanded the attention of many consumer brands and retailers, as it's set to change how many consumers buy products. This comes especially as the supporting infrastructure of home delivery services continues to grow,
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