Conversational Commerce - The Rise of Voice Assistants

Conversational Commerce - The Rise of Voice Assistants


A few weeks back I came across a wonderful podcast by the folks at Emarketer. It was on the rise of voice assistants or digital assistants that were becoming popular in American households. The podcast was between forecasting analyst Jamie Chung and Markus Johnson. If you want to listen to the full podcast, head on over to Soundcloud to catch all 30 minutes of it here.

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Chung defines a Digital Assistant as an intelligent software that responds to voice commands and works of various types of devices. These devices range from smartphones, speakers, wearable tech to entertainment and even cars. The popular digital assistants being used today are Apple’s Siri, Amazon’s Alexa, Google’s Google Assistant, Microsoft’s Cortana and Samsung’s Bixby. These digital assistants can be broadly categorized into three categories:

  1. Speakers
  2. Smartphones
  3. Others

She goes onto say that digital assistants have come quite far. It started off with us, the users, trying to understand the machine and work with it. But now these digital assistants are essentially machines that are adapting to humans, from understanding nuances in accents to complex questioning patterns. Digital assistants like Alexa are soon going to be rolled out in BMWs which is a great use case for this kind of software. Instead of looking at your smartphone or dashboard constantly while trying to navigate on the road, a hands-free voice-activated experience ensures safer driving. Chung gives the example of Google maps asking if you want to take a shorter route, and she notes that it’s safer to just tell the Google Assistant that you’ll take the shorter route, than having to look away to see the change. And since texting and driving are illegal, prompting your smartphone to play a song or send a text is just easier.

Analysts are constantly surprised. While the TV took 14 years to become a household item, analysts are constantly surprised at how quickly digital assistants have gone mainstream. Amazon Prime started in 2014 for only Prime members, but by 2016 it had taken off with the mainstream market. One of the possible reasons for this is the low price of newer devices. The Google Home was $135 at launch, but last year sold for $50. With devices like the Apple TV, wearables and tablets coming into the market, Chung believes that digital assistants are starting to be the future and look like the future.

 When it came to the market share of these assistants, Amazon is in the lead. Due to their aggressive pricing strategy in 2016 with the smaller dot device, where you could buy 5 get one free, you could essentially have one in every room. By buying multiple devices you get more of the experience.

Echo dot is also doing really well. In 2017, Amazon had 70% of the market share, and in 2018 they have 67% of the market share. Due to the different use cases for different brands, Chung believes that the future holds multiple devices for single homes. For example, Google Home can cast videos but Alexa cannot. The Home Pod is generally bought by Apple fans. Google Home is the most agnostic since it’s the most integrated with other devices. For example, the Amazon app on Android integrates completely with Alexa and Google also has the app. Since Google is the search king, they’re trying to be open in the optimization of their answers. Google as of 2018 has 30% of the market share. Last year’s holidays' sales lower price Google Mini speakers is taking a significant chunk of the market.

Chung goes on to say that due to the aggressive pricing of digital assistant speakers, they are a great holiday gift. The price point of the Echo Dot is $29, making it an affordable gift. Smartphones used to be a good holiday gift, and wearable devices aren’t doing so well anymore. Nowadays Premium speakers are also having inbuilt intelligent assistants. Clearly, the popularity of these devices is at an all-time high. In 2018, the number of smartphone users monthly was 77 million which is about 23% of the population, in the USA. In 2018, the number of speaker users monthly was 61 million which is about 19% of the population in the USA. The early adopters for these devices were 25 - 35-year-olds,  and older millennials.

The features of the digital voice assistants range from smoke alarms, cameras, thermostats to even lights. They come with over 25,000 services known as skills like adjusting temperature, ordering food and connecting remotely to things. Of course, the most common and simple tasks were “Repeat yourself” due to the assistant understanding the command wrong. The second most common task was asking it questions. This is not to be clubbed in the same category as Search. Chung defines Search as a behavior that prompts an array of responses. In the case of voice assistants, this is an inquiry where you get the most optimized response. The other uses for these speakers include the use of Calendars, Alarms, Sports and News updates. Digital voice assistants are much more convenient than typing and have become a communal activity among families.

In a survey done on why people use digital voice assistants? These were the results:

  1. The most common use was that the experience was handsfree
  2. It was considered fun
  3. Users found them more natural than typing
  4. And it was easy for children to use.

Chung says that phones are taking over our lives, and it was bound to happen that these devices will be taking over and adopted. Since they move us away from screens.



About The Author

Shantha Kumar
Shantha Kumar

Kumar is a Digital Marketer with 28 years of international experience. He has specific expertise in consulting, designing and implementing technology driven, Inbound Marketing Solutions. Aside from writing our blogs, he practices yoga, loves to trek, travel, and read biographies. He is believer of traditional Indian medicines and healing methods.

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