Shoppers’ response to smart speakers is muted
Predictions smart speaker shopping will reach $40bn by 2022 are wildly optimistic, says the e-commerce delivery expert ParcelHero. Its new report reveals consumers have yet to find their Voice.
Recent widely quoted predictions have claimed Voice shopping will grow to $40bn (£32bn) in 2022, up massively from $1.8 bn (£1.4bn) in 2018 across the US and $0.2bn (£0.16bn) in the UK. But the parcel comparison site ParcelHero is warning retailers should be cautious about building strategies based around the siren call of Voice just yet.
Revealing the results of its latest industry study, Shoppers are Slow to Find Their Voice, ParcelHero’s head of consumer research, David Jinks MILT says: ‘Voice is definitely clearing its throat, but there’s still a long way to go before it will become a significant part of retail sales. Our latest research looks at all the loud claims that have been made for Voice sales, but finds smart speakers don’t stand up to a grilling.’
ParcelHero’s new study reveals around 13% of US homes currently have a smart speaker, such as Amazon’s Echo and Google’s Home, while in the UK, 10% of households own one. Says David: ‘Those are respectable figures, but, if that prediction of $40bn plus sales is to come true by 2022, a lot more speakers are going to have to be sold in the next few years. Our research reveals just 0.5% of all US online spending is by smart speaker and 0.1% of UK online spending currently.’
Says David: ‘Our new study identifies three key reasons so-called smart speakers are still too dumb for most consumers to use as a purchasing tool. The first is privacy. The disturbing news that Amazon doesn’t always delete the stored data that it obtains through voice interactions with the company’s Alexa and Echo devices — even after a user chooses to wipe the audio files from their account – won’t help its progress. And, similarly, Google has just admitted its employees listen to Google Home recordings to improve voice recognition. With all this in mind it’s little wonder that 43% of consumers cite a lack of security features as the number one reason they won’t make more Voice purchases.’
Continues David: ‘The second hindrance is that smart speakers are simply not a great way of searching for products. The problem is that the vast majority of smart speakers are just that: speakers. Some, such as the Echo Show, do feature screens, but most do not; this makes browsing for items difficult. It’s far faster to look at a picture or read a description on a tablet or PC than hear that description read out. This is a considerable drawback and part of the reason ParcelHero’s own research reveals less than 10% of smart speaker owners actually use them for regular purchases – and these are mainly repeat low value items such as bin bags.’
The third, and perhaps key, barrier to increased Voice sales is that it is simply impossible to complete a purchase on the vast majority of sites, says David. ‘For example, Argos, a trailblazer for omni platform sales, was first to introduce a UK Google App in September 2018. It certainly proved great for checking product availability and reserving an item: but the final purchase still has to be completed in store or manually online. And the same is true with Amazon’s Alexa. Ocado, Morrisons and Sainsburys have been quick to introduce Voice-based ‘Skills’ Apps, enabling customers to add items to an existing order, remove an item from the ‘trolley’ etc. But again, it’s not yet possible to complete the purchase using the speaker alone.’
Concludes David: ‘ Our new study reveals that perhaps the most useful feature of smart speaker technology currently in e-commerce is for tracking. Skills such as the Morrisons’ App can tell you if your order is on time immediately. And one leading US and European supply chain company, XPO Logistics, is already integrating Google Home and Amazon Echo capabilities with its last mile network. One day soon you may well be able to book your ParcelHero shipment using Voice technology – indeed if it’s a regular repeat booking that seems quite probable. But by 2022 as part of a $40bn Voice revolution? For now, industry claims for smart speaker sales are likely to fall on deaf ears.’