Alexa, Cortana, Home Pod, Google Home, Siri, and the Dash Buttons are new and emerging formats allowing the consumer to interact, see, and purchase goods. Our phones, tablets, or laptops are no longer the only gateways to ecommerce, we are now in the age of voice commerce.
Consequently, we should all expect to see an increased amount of electronics to have embedded intelligence. Sonos, a wireless speaker manufacturer, has partnered with Amazon to embed Alexa into their Sonos One speakers. Smart televisions such as LG and Samsung, as well as cable providers such as Xfinity have voice command friendly remote controls. Even our cars have digital assistants that help us navigate the treacherous rush hour.
So, what does this trend mean for the future of retail?
Firstly, a new game of product placement. Harvard Business Review (HBR) recently published an article that tackles the new world that digital assistants present to marketers. When you can simply ask your Alexa “order AA batteries,” which brand will the digital assistant order for you? In the case of Alexa, most likely Amazon’s own private label batteries…
As HBR points out, as we start asking our digital assistants not for laundry detergent but for “how do I clean wine stains,” if P&G or Unilever has a savvier AI engine it can elevate itself in the eyes of the shopping bot. With the increase usage of digital assistants to help us with our buying behaviour, better AI will play a bigger role in getting better placements.
Contextual intelligence will then become the key to selling. Retailers and consumer brand companies will have to ramp up their contextual assets associated with their products. Simple descriptions of ingredients or materials will not suffice. They will have to provide rich and relevant context for the AI engines to better match the products with consumers. To take the example of the wine stains – once the question is asked of Google Home, the cleaning brand with the best solution might be the one that gets the most hits and conversions. Is the customer asking more likely to opt for an organic solution? Is the customer a repeat offender, maybe needs a cleaner but also stain resistant fabrics for future purchases? Retailers and brands must engage with assets that understand what consumers are looking for when they ask such open-ended questions.
And of course there is the supply chain angle. As these digital assistants become more pervasive they also extend the reach of your supply chain. How so? One area that has always been a black hole for supply chain professionals is when the demand signals are generated. Yes, we know when someone makes a transaction, but what if supply chains could get a better head start on this moment of truth? Imagine a supply chain being able to anticipate the need for a product, when a consumer starts querying their digital assistant. When our consumer starts asking their digital assistant to help get wine stains out, the supply chain can begin acting, if this consumer will need a cleaning agent, maybe even a replacement for that stained item. Consumers leaning more on their digital assistants to help in their everyday lives, will provide data for the supply chain about possible demand.
And with greater information comes greater responsibility. A major underlying issue with the rise of the machines is the ever growing gathering and usage of data. We have all seen the examples of consumers’ data being compromised: Equifax, Sony Playstation Network, Target and most recently Facebook. All these events remind us that when we are dealing with consumer’s data we create a target rich environment for abuses.
Retailers and brands need to be hyper sensitive to this potential risk. How do they balance the desire to mine the mountains of data to provide the contextual solutions to the individual query, while ensuring that data does not get compromised? Retailers and brands must determine what that fine line is that they are not willing to cross. Savvy firms will think long and hard about this, determine what their rules of engagement are and make it transparent to their customers.
The growth of voice commerce is another example of retail continuing to reduce friction for the consumer. Whether it was one click shopping, faster fulfilment times, picking up product in lockers, the consumer continues to seek easier ways to get the goods they want. Voice commerce is another facet in the process. As we leverage increasingly sophisticated technology to make the shopping experience that much easier for the customer, we must be aware of the possible unintended consequences we create.