“TALK” ABOUT A BUSY HOLIDAY SHOPPING SEASON— V-COMMERCE JUST GETTING STARTED. ARE YOU READY?

Author: Joe Scartz

We are already anticipating the largest digital commerce holiday shopping season of all time this year. Digital Commerce is set to account for $123.73 million out of the roughly $1 trillion dollars that will spend this holiday season at retail, according to eMarketer.

Voice, while a fractional amount of that total currently, is accounted for in the digital commerce number. The question is…how big can voice commerce (v-commerce) grow in the years to come and what should brands and manufacturers do about it?

 

The Landscape Today

Today, voice commerce is benefitting from broad adoption of software and hardware platforms and tools that enable voice shopping. At VELOCITY., we divide this software and hardware into four primary categories: The voice assistant powering the experience (distributed through various devices), the pervasive smart phone, smart speakers, and IOT as a category.

The Voice Assistant

The four major AI players are Google Assistant, Alexa, Siri and Cortana. Nearly half of U.S. adults use voice assistants on their smartphones, but also through IOT, laptops, tablets, cars and various other devices. Siri is the most widely used due to the iPhone followed by Alexa, Google Assistant and then Cortana. However, Amazon and Google clearly lead in proliferation and usage of smart speakers (Echo and Google Home specifically).  More on that  in a moment..

The Smartphone

We all know that the smartphone has reached critical mass (particularly in developed countries). What is important for v-commerce is that AI and voice assistants are being embedded into the user experience on these phones more seamlessly. Siri integration was a major component of ios 12. Earlier in 2018, Google announced that 95% of Android phones will  be reached by Google Assistant. Clearly the two biggest players in the smartphone world want their assistant to be the center of your relationship with their hardware and software.

The Smart Speaker

It is anticipated that the Google Home and Amazon Echo (all variations) will be two of the hottest selling items this holiday season and throughout 2019. As of June, 2018 20% of U.S. households own a smart speaker and Deloitte expects 63% growth next year globally.

 

The Prospects for Growth

As we have seen, the technology and the platforms for continued growth in voice are established. So, what are the commerce opportunities for voice?

Some firms have predicted that voice will grow to $40 billion dollars in the U.S. and U.K. by 2022. This is significant, when you consider that those two countries are leading nations in adoption of voice globally. Therefore, brands need to be prepared. In a world where one or a firm search results on Amazon or Google, or even Siri could limit your brand exposure, optimizing for voice today; not tomorrow, is your best bet. Measure your voice readiness on a brand-by-brand and product-by-product basis now. The future of search and brand engagement via voice has arrived.

What We Expect to See From Amazon in 2018

At this point, its clear that Amazon has become more than just another e-commerce company that we all shop from. They are also a digital content provider, research destination and marketing channel. And, with their first brick and mortar opening to the public earlier this week, their bigger step into grocery last year and other recent innovations, everyone seems to be watching and wondering what’s next. Based on what we know and are seeing, here’s what we expect from Amazon in 2018: Sensor Replenishment, Voice and Camera-Enabled Machine Learning.

Continued Alexa Growth

Amazon Alexa is growing at a faster rate than any other voice platform. Today Alexa is used mostly for Setting timers, playing songs, reading the news, and shopping.  Shoppers that utilize Alexa purchase 30% more than Prime members that do not utilize alexa, and 70% more than non-Prime members. With this much potential growth, Amazon looks to be doubling down on voice. We expect to see continued aggressive discounting on the device to get the Amazon Echo into more homes and continued improvements and skills.

Amazon Dash Replenishment Program – More Automatic Reordering

Early 2018 Amazon announced that several manufacturers are producing smart products that integrate with Amazon to automatically reorder for consumables when supply runs low. 3M, Blustream, Epson, HP, and Kenmore are some of the key players in this program. It is expected that several more devices will follow suit.

Amazon’s Dash Replenishment leverages multiple sensors to analyze when a consumable is running low inducing a buy order to replenish the product before it runs out.  Printing paper, ink, laundry detergent, and coffee are some of the products that will be available through Amazon’s Dash Replenishment.

Machine Learning Video Camera

Amazon is capturing voice. So, what’s next? View. Amazon has technology that they are releasing to developers to utilize Machine Learning-enabled video cameras. We know Amazon is obsessed with tracking through sensors, and now they will continue to develop on their camera tracking. The next step from here is to follow a similar path to Alexa, where amazon will offer the technology to be included in the manufacturers’ end so they can continue to dominate auto-replenishment and more.

 

Written by: Rami Odeh, TPN VP, Digital Commerce

CES2018: Reflections and Looking Forward

After a few days’ rest and some time to digest my experiences at CES 2018 last week, one things for certain: we are moving at a consistent and fast pace into some pretty amazing times. And I’m not talking about robots. Well, maybe I am… as long as they do not call me “master”, because that’s just weird.

No, I’m talking about the convergence of technology advancements that are all happening at once. In previous years, many felt overhyped. But now I feel certain in my prediction that my kids won’t need to learn to drive a car. It’s like we are headed to a new point on the horizon. And it’s going to be glorious… well, and quite scary for some.

AI is the new data

Last year’s CES was overrun with sensors providing data and metrics. Now artificial intelligence is here to provide the big “so-what” to all that data. AI enabled was the term to use when talking about personalization for all manner of items ranging from sports to health to food. While AI is the underlying tech connecting all the items below, 5G is providing the bandwidth.

Everything is connected

Sensors, IoT, whatever… now my toilet is connected and my baby’s bottle is tracking feeding.

The connected home was in full swing at CES. And, as opposed to last year, “smartified” products told a more complete story. Of course to a hub/each other, but also to content services like how whirlpool partners with yummly or how a folding clothes machine wants to be your fashion expert. And how will we interact? While many of the appliances sported touch screens, the dominate interface was voice.

Voice is the Interface

Since Alexa boomed onto the CES stage last year, we’ve been talking about the emergence of the conversational interface. Well, it’s here. Prior to the show, there was tons of discussion about who would win? Alexa or Google Home…. Despite Google’s best effort, I still felt Alexa had the upper hand with integrations, shopping, and being embedded in household objects. But a greater feeling was how similar the situation was to iOS v Android and there’s room for both (maybe Bixtby as well?) to coexist. With the rise of voice, inevitable questions come up like how will it impact mobile usage (people will use mobile less) and what does it mean for brands (a voice driven world will be a game changer).

Autonomous vehicles are close

Yes. I know they are actually here. But they are getting closer to being a reality for me. And I can’t stop thinking about how it will impact delivery. It’s become easy to imagine my Amazon/Blue Apron/Pizza packages will be delivered by a self-piloted shipping pod (Dominos and Ford partnered to show a pizza test solution right out of a recent Black Mirror episode).

We aren’t getting enough rest

Last year, we weren’t drinking enough water. “High tech” water bottles were everywhere. This year, AI driven mediation, sleep, and rest technology was peppered throughout.

The evolution from “I bought it online” to “it’ll be here in 2 days” to “it’ll to here in 2 hours” is on the trajectory to “Ben, this is your future assistant. Just letting you know I saw you had a stressful day. Your kid will be home from practice on Pod XYZ in 45 minutes. She has not done her homework yet. I’ve warmed up the shower for you to relax in and have picked out the family dinner for the evening. The ingredients are in the fridge.”

Or maybe it won’t say that. It will just do those things as we move from convenience and personalization to prediction.

Written by: Ben Gauthier, TPN VP, Innovation + Technology