2023 Vertical Markets Spotlight: Speech Technology in Retail
Retail’s future has been teetering on the edge for quite some time. Several big-name retailers have closed their doors for good, while others have lessened their reliance on brick-and-mortar locations and increased their digital shopping options. E-commerce had been slowly displacing physical stores for quite some time, but COVID-19 pushed that conversion at unprecedented speeds.
In fact, McKinsey concluded that during the outset of the pandemic, the United States underwent 10 years of e-commerce growth in just three months.
In parallel, another trend has been developing in retail, and it stands to transform the industry for years to come. It’s the use of voice technologies.
Retailers are now relying on speech technology to help manage increasing numbers of calls to contact centers, provide quick search assistance for consumers, engage customers at interactive kiosks, accept contactless payments, and handle a variety of other uses that increase efficiency, improve customer experiences, and boost their bottom lines.
Much of the trend is being driven by consumers’ growing use of voice technology. A recent survey by conversational artificial intelligence provider Vixen Labs found that 20 percent of U.S. adults use speech technology daily for shopping. Among their uses for the technology are speech-activated searches, tracking shipments, learning more about products, such as price or availability, and to get store locations and hours.
Using speech is popular, roughly half of respondents said, because they perceive it to be quicker than text and it helps them efficiently find the information they want.
For most, the catalyst for the growing use of speech is the smart speakers that they have in their homes, with voice-based virtual assistants like Amazon’s Alexa, Google Assistant, and Samsung’s Bixby anchoring the interactions.
E-commerce CRM systems provider ReadyCloud points out that 55 percent of U.S. households and 48 percent of U.K. households had smart speakers with voice shopping capabilities by the end of last year, with the total market reaching $40 billion. In its report, it called the technology “a game changer for e-commerce businesses,” noting that failing to offer it to consumers could mean “losing a lucrative opportunity.”
Among some of the leading retailers that have fielded these technologies are Sam’s Club, which in 2019 introduced the Ask Sam voice assistant and adapted it in 2020 for use in affiliated Walmart stores. Around the same time, Walmart, 1-800-FLOWERS, Exxon-Mobil, and Giant Eagle launched Amazon Alexa skills that allow consumers to make voice purchases through Alexa-enabled devices.
Carrefour then began offering a voice-based e-commerce experience using Google Assistant that lets consumers create shopping lists using voice commands and then pay in the Carrefour app.
And 7-Eleven enables contactless payment using Siri voice-command shortcuts through the 7Rewards loyalty program, Google Pay, or Apple Pay.
The primary users of the technology, according to ReadyCloud, are consumers between the ages of 25 and 49, closely followed by those in the 18- to 24-year-old range.
But not all experts agree on just how widespread voice-based shopping is today.
Robert Wakefield-Carl, senior director of innovation architects at TTEC Digital, says the technology that enables it is still somewhat limited.
“The main problem is the lack of back-end services,” he says. “If you have a description showing up on your website, that’s fine,” Wakefield-Carl explains. “But if you have to read that description out over the phone, you probably find it doesn’t fit so well. [The description] could be too long.”
Long SKU or product numbers typically don’t work well with speech technology either, according to Wakefield-Carl, noting that when people have to listen to long numbers or descriptions, they are likely to lose interest in the product.
Data from eMarketer suggests that voice shopping with home speakers isn’t as robust either. While 21 percent of consumers have used smart speakers to order movies, TV shows, or music, less than 20 percent had used them to order products, it found.
Voice commerce adoption has been low because of the restricted responses that voice assistants can give, according to eMarketer. ReadyCloud’s statistics also support that notion, pointing out that queries tend to be short (25 words or fewer), limiting product searches via smart speakers to the most common products.
This could become less of an issue, though, with the emergence of generative and conversational artificial intelligence products like ChatGPT. Such technologies could enable automated responses that can be made more personable, improving the customer experience, eMarketer says.
However, ChatGPT won’t solve other challenges, like privacy concerns or a lack of screens on most smart speakers, according to eMarketer.
Due to privacy concerns, consumers will not use voice shopping where others might overhear what is being said. In fact, 42 percent of U.S. consumers cite security as their top concern in using voice-based shopping, according to research from FinancesOnline, providers of a cloud-based platform for B2B software and financial product reviews.
The research also found that 31 percent of consumers worry that speech recognition errors will cause them to order the wrong products.
However, there are some retailers that are having success with the technology. Sneaker and sports apparel maker and retailer New Balance, for example, partnered with Snapchat to boost voice shopping during the most recent holiday shopping season. The pair created an augmented reality-focused ad push incorporating voiceML audio prompts to help consumers discover relevant products. Using the New Balance Lens, the Holiday Gifting Concierge prompted Snapchat users to answer a series of questions about the gifts they planned to buy and their intended recipients to help shoppers find the right items.
Similar technology is also being incorporated into consumer kiosks at many retail locations. Companies like McDonald’s and other quick-service food retailers are among the main users, according to Craig Keefner, manager of the Kiosk Manufacturers’ Association.
UST, a digital transformation solutions company, and KIOSK Information Systems last year released a self-service Retail AI Vision Checkout platform. The touchless checkout solution includes both voice- and gesture-based options, combined with flexible payment options.
Kiosk use is expected to grow as retailers struggle to manage staffing challenges. And, following in the footsteps of Snapchat and New Balance, there could well be more uses of the technology for holiday shopping suggestions in 2023.
Consumers don’t have to wait that long, though. Already now, well ahead of Black Friday, a number of innovative companies are rolling out similar capabilities.
AI tech startup Verneek, for example, just two months ago launched One Quin, a consumer experience AI platform to answer personalized questions through voice activation or text anywhere. Shoppers activate One Quin by scanning a barcode and can use it on their smartphones, or, where available, via kiosks.
The first use cases for the Verneek solution are in retail grocery and health and beauty outlets, with others to follow throughout the year.
“One Quin’s use case in retail is a win-win for consumers and enterprises. It’s beyond search. It’s a personalized AI service for anyone to live healthier,” said Omid Bakhshandeh, Verneek’s cofounder, in a statement. “The technology enables shoppers to make better, faster online and in-person shopping decisions while increasing sales conversions for retailers. The technology goes beyond the retail vertical and applies to any consumer-facing enterprises.”
Another creative use of the technology is being pioneered by Yobe, which worked with SoundHound AI to bring together the SoundHound for Restaurants ordering platform and its own edge voice extraction and ID technology, which allows restaurants to integrate voice seamlessly across cell phones, drive-throughs, and kiosks. The technology acts as a biomarker to provide a customized experience for consumers, recognizing them by voice and pulling up their preferences and rewards accounts. Yobe was expecting to roll out the technology in self-service kiosks at PLNT Burger, a veggie-burger restaurant chain based in New York.
In general, experts saw development of voice-recognition technology shift into high gear during the COVID-19 pandemic. In mid-2020, Mastercard and SoundHound introduced voice-tech kiosks for touchless ordering and payments. Early adopters were largely in the quick-service restaurant segment, including White Castle, Dunkin’ Donuts, and Circle K.
And Domino’s Pizza, which has never shied away from new technologies, uses voice tech in its Intelligent Call Manager solution, which enables customers to make orders and track deliveries at more than 6,000 U.S. outlets.
But one of the most unique introductions of voice technology in retail kiosks came from NVIDIA, a company whose approach to self-service kiosks is much different than what the industry has seen so far. Instead of a touch screen, its speech-enabled kiosks feature customized avatars that greet customers, take their orders, ask follow-up questions to refine the order, and make personalized recommendations based on variables like the customer’s order history, running promotions, or even the weather. Instead of touching the screen, customers simply talk with the avatar in a normal conversational style.
Voice-tech initiatives like these are proliferating in retail today. Advancements that began during the pandemic have only accelerated and are showing no signs of slowing down.
Phillip Britt is a freelance writer based in the Chicago area. He can be reached at firstname.lastname@example.org.