Exploring Data: Voice Commerce Is Expected To Reach $40B By 2022
Updated: Mar 3
According to a recent market research report made by OC&C Strategy Consultants, Voice is poised to completely disrupt commerce within a few years. After collecting data from thousands of smart speaker users, the firm predicts that Voice shopping is going to skyrocket from its current $2 billion status to $40 billion by 2022.
The report suggests that the boost in Voice shopping will be tied to the rise in smart speaker adoption. According to Juniper Research, there are about 3.25 billion digital voice assistants in use today and that number will rise to 8 billion by 2023. The report also revealed that those who own a smart speaker tend to be young, wealthy and have kids.
So what are users actually buying? Right now, it looks like spending habits point to low price commodities consumers are familiar with. The most common purchases are groceries (20 percent), entertainment (19 percent), electronics (17 percent), and clothing (8 percent). Consumer behavior seems directly linked to their level of trust with Voice shopping. For example, currently only 39 percent of users trust personalized products suggestions from their smart speakers. This may be related to the nascent nature of devices natural language processing today.
On the other hand, a whopping 85 percent of consumers are highly influenced by Amazon’s Choice products and often purchase those suggestions. In fact, Amazon Choice is so impactful that brands who gain this status can boost sales threefold while brands that lose this status often see a 30 percent dip in sales.
Bottom line? Brands have the opportunity to become the Amazon Choice in Voice or beat Amazon Choice in Voice through series of tactics.
Amazon and Google, offer tools that make their devices a platform to sell which allow companies to take ownership of their brand on the platforms and drive all interested parties to their products or experiences by creating connected applications. As of 2018, there were only about 39 apps within the Voice shopping category, so there’s a very real opportunity to get ahead of the curve. With over 80,000 live skills, that’s a big gap and opportunity.
Another benefit is the no “pay to play” structure. While this may change in the future, right now brands can get placement as a top recommended product by being a first mover, making great experiences, tapping into a few select development features, and dialing in all of their affiliated commerce pages online.
At the moment there are several ways to connect to commerce in the major consumer platforms.
BUY FROM PLATFORM: Google and Amazon have launched tools and pilot programs that allow developers and brands to frictionlessly sell items from the platform inventory. For Amazon, it's items in Amazon.com inventory. For Google, it’s a network of retail partners via Google express.
BUY IN-APP: There are also “in experience purchases” which allow users to buy content, entertainment experiences, and premium features within Skills and Actions. Several startups have launched, just to focus on Voice First content sales.
VOICE AS PAYMENT PROCESSOR: Both Amazon and Google also function as a payment processor, offering ways for 3rd party brands to hook in commerce experiences. Purchases on 3rd party skills for goods or services can transact using merchant accounts as a payment processing tool, taking a small fee. This is for your food service partners, Ticketmasters, and 1800 Flowers of the world, or any other product/service a user might want to buy through Voice, but wouldn't be in Amazon inventory.
LOGIN: oAuth logins allow users to sync with their external memberships and control ordering via Voice i.e. Uber, Dominos, etc. oAuth has a high bounce rate, but over time the oAuth process will smooth out and become more widely used.
LINK OUT: Finally, with omni-channel commerce, the transaction doesn't have to take place in VOICE. VOICE can be a conduit to collecting a phone number or email address and sending a purchase link.
The hope of Voice commerce is that it will remove friction for customers. If a Voice Commerce experience is not reducing friction or adding value, it may not make sense. Take travel planning or food ordering. Selecting a full food order, or picking a hotel room normally requires many webpage tabs and comparisons. Voice may not be a first choice for complex purchase decisions, but brands could potentially break down that process and simplify it via Voice, or use conversations as a reordering/ rebooking tool for frequent orders.
This is also a fresh opportunity for brands to take the time and resources to think through what is a truly valuable experience for their customers. It may be a lifestyle experience consumers can enjoy while using your product. It’s our job to show consumers what is possible. Users may not know what they want or need until brands make the right user experience that improves their consumer journey.
We’re cautious when it comes to 2022 predictions, but it’s certain that the broad distribution of Voice devices is opening up an entirely new commerce channel. Brands have to opportunity to explore the creative corners of what’s possible and generate data that will inform the best practices of tomorrow.