A new report by The Information has roiled Amazon, punching a hole in the concept that users of their Alexa-powered smart speaker devices will use them to buy billions of dollars of goods through voice ordering. According to sources from inside Amazon, the company is disappointed that only about 2% of users of their devices use them for voice-enabled shopping – a result that throws shade at the company and industry analysts who predicted a tsunami of voice-powered purchases. The company’s spokesperson disputes the report.
See what we’ve learned about Amazon’s voice shopping experience…
Amazon is not alone in their desire to have users of their devices order items by voice from Amazon – Google, too, had hopes of a voice-enabled shopping future. Various forecasts had envisioned as much as $40 billion in annual voice shopping sales by 2020. This new report, calls those numbers into question.
From multiple sources connected to Amazon, The Information reporters have learned that Amazon is frustrated that only a small fraction of users, just 2% in 2018 – predominantly users of their Echo model – have used it to make purchases by voice. These same sources also said the company, who has never officially revealed how many of the devices they have sold publicly, have actually sold about 50 million units.
That’s Bad, But Things Get Worse
But the news is actually worse than just that low utilization. These sources say that an internal study shows that, of those who tried using voice to purchase something, 90% NEVER purchase by voice again. Ouch!
There is however, a larger percentage of Alexa device users, around 20% or so, that use their voice for shopping related activities…such as asking, “What are my deals?” and “Where is my stuff?” to track previously placed orders.
But, as one of their Amazon-connected sources said, “Clearly, voice shopping is not yet in the stage of being a mass market product.”
Skills Builders ‘Manage Expectations’ of Clients; Build ‘Learnings’ Not Purchases
To put a finer point on it, the reporters spoke with an agency that companies hire to build “skills” for Amazon Alexa and Google Assistant, to see if they had a different take on using smart speakers’ voice capabilities to build voice purchases. Instead, they learn that, at least in one example, the skills builders actually warn their clients – those companies seeking to offer voice skills to consumers – “not to expect too much.”
“We’ve done a lot of work to manage back the expectations to say we don’t expect a high volume of purchase here right away,” Patrick Givens with VaynerMedia told The Information. “We would definitely think of commerce in voice today as a space to try and build learnings right now, but not a place where we expect to see meaningful purchase volume…”
So What are Alexa Customers Using Their Devices For?
Another skills creator said: “I know no app that pays for its development costs itself. The return they’re seeking is out of publicity and brand awareness.”
So what are people using their Alexa devices for? According to this report on Amazon’s internal study, people are mostly using voice to ask simple questions about the weather, or to set timers, or to play music and listen to digital radio stations. This result echoes (pun intended) other studies from a variety of market researchers that we’ve seen that found that music listening is the #1 use of smart speakers.
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