Millions Use Alexa to Shop, and Brands Need to Start Paying Attention

According to Amazon, the Echo Dot was the best-selling device during the holidays

Voice assistants are quickly becoming an essential cog in millions of American households.
Amazon

Alexa, tell me why brands and retailers should care about voice shopping.

Unfortunately, Alexa can’t answer that question (at least, not yet). But Amazon can. Following another strong holiday season of Amazon Echo and Echo Dot purchases, the company tooted its horn, proclaiming that it had its “biggest holiday season” yet.

Voice assistants are quickly becoming an essential cog in millions of American households. Industry experts believe this is an important opportunity for brands to capitalize on voice-assisted shopping—either to push forward to create strategic capabilities around voice, or to play wait-and-see.

“How many seasons [should pass] before you as a company wake up and thinks ‘we need to have a [voice] strategy?” said Brian Roemmele, a voice expert and technology consultant.

According to Amazon, The Echo Dot (the smaller version of the Echo) was the “best-selling product from any manufacturer in any category across all of Amazon.” This should come as no surprise, though, considering Amazon devices get free advertising on the site, strategic placement, and a consumer-friendly price point. The company even went so far as giving the Echo Dot a 40-percent discount during the holidays, bringing the device’s cost down to $29.99 (originally $49.99).

The company wrote that “millions of Prime members” shopped with Alexa, the implication being that voice is growing, and brands will have to meet the needs of more consumers shopping by voice. That said, not everyone is as sanguine about the rise of voice-assisted shopping.

“There’s certainly a lot of enthusiasm and curiosity about these products, but they’ve also been sold to consumers very actively (and cheaply) rather than being incredibly actively sought by consumers,” said Tom Goodwin, executive vice president and head of innovation at Zenith Media. 

Goodwin argues that brands need to think more about what their consumers want, rather than the bells and whistles of innovation for the sake of innovation. “Brands need to serve people better, make better products and experiences, reduce friction [and] be optimized for mobile,” said Goodwin. “We’d do better if we focused on simplicity and removing complexity more than assuming voice is the thing to work around.”

Voice may not ultimately replace all shopping, but it could change “replenishment purchases,” such as paper towels or batteries. Amazon already has an advantage over this area compared to new personal assistant devices like the Google Home, since Alexa knows your purchase history and what kind of brands you like best.

“If you’re a brand and in the replenishment category, you’re nervous that people are going to buy the wrong thing,” said Jason Goldberg, senior vice president of commerce and content at Sapient Razorfish. Or worse yet, Amazon can decide to pick an Amazon Basic battery instead of Duracell for the consumer.

It’s why William Underwood—cofounder of AddStructure, a company focused on using AI to drive voice shopping—agrees with Roemmele’s sentiment. “Simply participating in a marketplace dilutes their identity and adds more value to the marketplace owners (Amazon and Google) than to the retailer,” said Underwood. Instead, Underwood thinks retailers need their own “voice ecosystem” and that “brands should consider building in voice functionality, where appropriate, into their products and/or marketing strategies.”

While voice shopping is expected to grow in 2018, it won’t necessarily change the retail landscape. According to Goodwin, it could end up hurting Amazon. “I actually think voice may end up reducing Amazon’s profitability as it could reduce average basket size and increase the cost of delivery per item,” said Goodwin.

All of this thinking is hopefully not futile; sure, Amazon already has a head start in the voice commerce race, but there’s still time for other brands and retailers to catch up—and potentially edge the company (and Alexa) out.