Market Spotlight: Retail Eyes a Sharp Increase in Voice-Assisted Shopping

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While voice technology has been around for a while, its use as a consumer shopping aide really only emerged just a few short years ago. It all started in November 2014 when Amazon released its first Echo device for Prime subscribers. Amazon launched voice ordering via Echo devices just two years later, in July 2016. Since then, the biggest tech giants, including Google, Apple, and Samsung, have launched their own assistants and smart speakers. Other tech powerhouses, including Microsoft, Alibaba, Baidu, and Harman International, have also jumped into the market.

A more recent entry into the market is Buzzo, an artificial intelligence-powered voice assistant for e-commerce. Buzzo was created by Jio Haptik Technologies and uses Jio Haptik’s natural language understanding combined with product metadata, such as filters, reviews, pricing, tags, etc., to understand users’ needs and provide recommendations. The AI assistant also knows how to nudge relevant upsells and cross-sells and add multiple items to carts.

Buzzo’s first implementation involves JioMart, one of India’s largest e-grocery platforms. Millions of JioMart customers have used the AI assistant already, with a 50 percent increase in conversions.

“The initial results we are seeing with JioMart are extremely promising, and we are excited to take this product to other brands globally,” says Aakrit Vaish, cofounder and CEO of Jio Haptik Technologies.

A number of retailers, including Walmart, Target, Sephora, Ocado, Costco, Walgreens, and Petsmart, made their first forays into voice-based ordering as early as 2017. That same year, Peapod, the online grocery delivery service, added a voice-activated Alexa Skill and launched a platform that allows consumers to use the voice app to add to their shopping carts.

In general, voice assistants like Amazon’s Alexa, Google Assistant, Apple’s Siri, Microsoft’s Cortana, and Samsung’s Bixby allow users to search the internet for products, obtain product information and availability, create shopping lists, and even place orders when supplies of a particular item run low. Amazon has a particular advantage in this area through its connection to Whole Foods Market and thousands of retail partners, but Google has fought to be competitive, partnering with Walmart, Target, and Ocado to offer its customers a voice commerce option. And it is a market that is sure to grow.

In fact, UnivDatos Market Insights, a European research firm, in its latest research projected the global voice assistance commerce market to grow at a compound annual rate of 77.7 percent through 2027, when it is expected to reach $1.3 trillion. The research firm credits higher adoption of smart speakers, increasing penetration of online business, and rising demand for contactless shopping experiences for this incredible growth.

While it segments the market into set-top boxes, smartphones and tablets, smart speakers, and other devices, UnivDatos expects the smartphone and tablet segment to dominate and see compound growth of 72.6 percent per year through 2027.

By product type, UnivDatos segments the market into grocery, entertainment, clothing, electronics, and other products. Of those, the grocery segment accounted for the largest share, a trend that is expected to continue through 2027.

North America currently dominates the voice assistance commerce market, owing to high penetration of smart speakers and smartphones in the United States. The region generated revenue of almost $20.9 billion in 2020.

Retailers should note, though, that voice assistants are not only used for making purchases. Consumers also use voice assistants during their shopping journeys for checking delivery status, creating shopping lists, searching for products, adding items to online shopping carts, providing feedback, contacting service or support, and other reasons.

One of the more popular uses for voice assistants is voice search, which had already been a staple among consumers, accounting for about half of all online searches. UnivDatos expects voice searches to claim about 30 percent of all e-commerce revenue by 2030.

But for all that has changed with voice in retail, perhaps no force has upset the traditional shopping paradigm more than COVID-19. This past year, voice became the go-to platform for consumers looking for frictionless experiences that would limit their direct interaction with other people. Many retailers turned to voice technologies to allow their customers to avoid the store altogether or to come by only for curbside pickup of items bought online.

Now, as COVID-19 concerns start to fade, voice is transforming retail again.

Voice is taking more of an active role during actual in-store visits. Amazon, for example, is starting to roll out a new Fresh Stores concept where Alexa-enabled Echo devices in the store can provide product availability and location information to users. As shoppers walk through the aisles, they can ask Alexa where to find the milk or which items are on sale in the produce department.

Not to be outdone, Walmart has also turned to voice technologies to improve customer shopping experiences. The company has been rolling out its employee-facing assistant “Ask Sam” across its Sam’s Club and Walmart outlets to help store associates retrieve information for customers. Though still only for use by employees, there’s no reason the retail giant couldn’t turn Ask Sam around to help consumers directly.

Even fast-food chains are embracing voice technology. McDonald’s, Sonic Drive-In, and White Castle, for example, have been testing voice-enabled drive-through ordering technology for more than a year.

The White Castle solution feeds off a partnership with speech technology provider SoundHound and Mastercard.

SoundHound, a provider of voice artificial intelligence and conversational intelligence technologies, is partnering with Mastercard to develop voice-enabled drive-through solutions for quick service restaurants (QSRs).

Mastercard is looking to transform drive-through and drive-in interactions through vehicle recognition, voice ordering, and artificial intelligence.

The partnership will leverage Houndify’s Speech-to-Meaning and Deep Meaning Understanding technologies. Houndify’s advanced voice AI technologies will enable systems to understand complex orders, substitutions, and special requests.

“We are thrilled to be partnering with Mastercard as part of their retail initiatives to deliver this timely innovation for retail brands and the end consumer,” said Amir Arbabi, vice president of business development at SoundHound, in a statement. “Consumers today believe voice ordering makes their experiences more convenient and less stressful, and we look forward to helping Mastercard deliver frictionless service, convenience, and customer safety.”

“As retailers and consumers navigate through one of the most disruptive periods in modern history, it’s clear that traditional business operations will need to evolve quickly,” said Stephane Wyper, senior vice president of retail innovation at Mastercard, in a statement. “We’re committed to supporting our retail partners and are excited about our partnership with SoundHound to voice-enable a broad range of services to enhance the physical shopping experience.”

Also on the consumer front, several leading retailers are looking to cash in on consumers wearing headphones during their shopping trips. Headsets can be equipped with voice assistants that connect to the store’s mobile apps or beacon technology, creating an immersive shopping trip where consumers can hear about offers or locate products as they push their carts from one aisle to the next.

It’s not some far-off, science fiction plot. Amazon Echo Buds, the smaller, in-ear version of its larger Echo devices, lets users tap into Alexa to find out whether their local Whole Foods Market has a particular item in stock, and once they arrive at the store, the same technology can guide them to the exact aisle and shelf where that item is located.

Similar technology is also making in-car ordering a real possibility. The growing use of voice assistants in the car creates further opportunities for retailers to enhance the typical shopping trip. Using such technologies, it’s conceivable that consumers will be able to order items ahead of time while driving to the store, pay for them through their linked bank accounts, and alert stores once they’ve arrived, without ever taking their hands off the wheel or their eyes off the road.

Still, some retailers have been hesitant to get into voice, largely amid doubts about the technology’s accuracy. However, the technology keeps getting better and better thanks to improvements in artificial intelligence and natural language processing/understanding. So with everything that voice technology can offer, there is no reason for retailers not to buy in.

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