Brands see voice ordering as more opportunity than threat

Discussion
Feb 28, 2019

MarketingCharts staff

Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers.

Brands are viewing consumers’ increased comfort with voice assistants as less of a threat than an opportunity, per a survey of more than 500 U.S. brands from Feedvisor.

Sixty-nine percent of respondents said that they either somewhat or strongly agreed that voice ordering is an opportunity and will play a part in future sales strategies.

Feedvisor wrote in the report, “Given that voice searches are powered by natural language processes, brands can adapt content and ad copy to account for these high-value searches. This will provide them with an advantage over brands that are not optimizing for voice search and enable them to unearth incremental profits via this additional point of entry to customers.”

Still, 45 percent somewhat or strongly agreed that voice ordering was a threat.

Data from Digitas suggests one such threat to brand loyalty. When using voice ordering, 85 percent of consumers admitted that instead of purchasing the specific brand they requested, they have purchased the first option selected by the voice assistant on at least one occasion,which according to Gartner L2, often ends up being Amazon’s own brand when Alexa is being used.

Indeed, much of Feedvisor’s report explored the risks and benefits of working with Amazon, which continues to dominate the smart speaker space. According to survey of 500 U.S. owners of the HomePod, Amazon Echo and Google Home at the start of this year from Consumer Intelligence Research Partners, 70 percent owned an Amazon Echo; 24 percent, Google Home; and six percent, Apple HomePod.

The Feedvisor survey found:

  • When selling on Amazon, two-thirds of participants agreed (33 percent somewhat, 33 percent strongly) that competition with Amazon’s private label products was a concern.
  • Seven in 10 agreed either somewhat or strongly that competition from other brands on Amazon is a leading concern.
  • The vast majority of brands either currently selling on Amazon (97 percent) or not currently on Amazon (84 percent) believe that one of Amazon’s benefits is in acquiring new customers.
  • Of the surveyed brands that sell on Amazon, more than half of their total e-commerce sales come from the platform.

 

DISCUSSION QUESTIONS: Is voice ordering more of an opportunity or threat for brands? Should brands be any more concerned if Amazon continues to dominate the smart speaker space versus Google, Apple or another platform?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The battle for product-specific brand preference isn't at the point of voice-order, it's way, way before -- at the very top of the funnel."
"Voice ordering is not a threat and is no more of an opportunity for consumers to make purchases than any other modality ... it is the way that in time, many people will shop."
"...at the end of the day, the brand meaning battle is fought all the way through the purchase journey."

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17 Comments on "Brands see voice ordering as more opportunity than threat"


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Charles Dimov
BrainTrust

Voice commerce has NOT taken off the way we originally thought. Given a more subdued up-take, it is NOT a threat. For most brands it is an opportunity. Orders that come from voice commerce are an add-on. Icing on the cake.

But you can’t expect that this will remain stagnant. Voice will start growing in acceptance, albeit at a slower pace. Brands and retailers need to be there, to cover your bases, and to be where your customers are transacting.

Yes – brands need to be concerned about Amazon. However, as pointed out above, the right move is to leverage Amazon to get to customers you might not otherwise touch. However, for good measure, if you already have the systems to cover it, make sure you are also playing with Google and Apple. Monopolies are not good for the industry. So you want to have options, and reach customers whereever they end up gravitating.

Shep Hyken
BrainTrust

When you start ordering “by voice,” and you find it easy and convenient, you will likely come back and do it again. Then it becomes a habit. That’s good for retailers who have been forward-thinking enough to make their merch available through smart speaker platforms. Should be brands be concerned about Amazon dominating? They should be concerned for any competition. The first step is to keep up and get on the platform(s). The second is to let customers know how easy it is to order from them. Then get customers in the habit of using voice to order.

Frank Riso
BrainTrust

I also think it is an opportunity for brands. It is easier to order by voice instead of making a list to order later or forgetting completely what we intended to order. Doing it by voice gets it done and if brand loyalty is there we ask for the item by brand so that should be a help to brands over the Amazon items. It does not matter which device we have or use since I think the consumer needs to be in control of what they are ordering, one mistake on a brand will be a lesson learned. Ordering in another language is also a benefit to using voice over not being able to read English.

Adrian Weidmann
BrainTrust

Voice recognition is, and will be, the future of human interface to computing systems. While still in its infancy, the statistics outlined in the MarketingCharts article highlight why retailers and brands should be paying close attention to this emerging reality. Since Amazon “owns” the device and the consumer real estate, they are clearly positioning and prioritizing their products — not surprising. This interface removes visual cues and stimuli from the selection and purchasing process. This eliminates store and shelf positioning, package design- shape, color, and text, and adjacencies from the shopping process. Brand marketers will need to educate consumers as to how to verbally ask for their products — specific words, phrases, ingredients, sources, etc. It’s yet another dimension of the digital transformation that is being discovered. Brands will need to address this sooner rather than later in order to leverage this evolution as an advantage.

Ken Lonyai
BrainTrust
Voice ordering is not a threat and is no more of an opportunity for consumers to make purchases than any other modality. Simply, it is the way that in time, many people will shop. There are those that cite statistics of voice ordering today and use that as a yardstick to predict the future. They are wrong in their assessments. Today’s nascent attempts at VUIs (voice user interfaces) for commerce are meaningless in the long-term trajectory, except for lessons learned. Voice will be paired with GUIs (graphical user interfaces) to provide shoppers with rich experiences that are easily/comfortably voice driven. And with improved AI, they will be ever more assistive and suggestive. We’re just not there yet. When that comes to be and when people have successfully experienced shopping by voice even when it’s only voice, the floodgates will be open. Brands that choose to listen to the naysayers and their incorrect predictions will pay the price in the future, just as brands and merchants did in the past when they didn’t see e-commerce amounting… Read more »
gordon arnold
Guest

Surveys and test marketing have little to do with the security threats and shrink numbers that most likely will follow early enrollment into new and unproven technologies. Fulfillment companies will pass on the risk, or lion’s share, to their suppliers. The jump to get in with the first wave is always the riskiest and destroys companies and careers faster than anything else.

Brandon Rael
BrainTrust
Voice commerce is emerging, yet at this point of the maturity cycle, it very much remains a novelty. As Scott Galloway and the L2 team have pointed out, while Alexa’s voice assistant capabilities are of interest, most of the transactions via Amazon are pushed to their private label offerings. However, just as having a marketplace presence on Amazon is another channel for brands, voice commerce could potentially increase the share of the consumers’ wallets in the next 10 years or so. Consumers enjoy choice and having a broad selection of products and brands to choose from, regardless of if they are buying via a mobile device, a voice ordering device, a desktop, or the good old fashioned brick-and-mortar locations. There is a clear net benefit for Amazon to offer the Alexa devices at such a low cost to their Prime members. It has become ubiquitous at Whole Foods and in Best Buys, etc. However, Google has made significant strides in the voice ordering segment. While it may not be as public as Amazon has been… Read more »
Ralph Jacobson
BrainTrust

As long as privacy concerns are mitigated, the convenience of this technology is hard for brands to ignore.

Susan O'Neal
BrainTrust
25 days 17 hours ago

What I took away from this data is that the Amazon brand, as represented by the voice of the device itself, is increasing in equity at the expense of the actual product-specific brands. The reality is when consumers are placing an order via voice, they either already know exactly what brand they want or they don’t care (thus Amazon’s private label brand growth). The means that the battle for product-specific brand preference isn’t at the point of voice-order, it’s way, way before — at the very top of the funnel, where strengthening consumer preference for your brand is the top priority.

Ben Ball
BrainTrust

Brand building — second, third and “voice” verses are all same as the first. It’s all about the consumer’s level of involvement with the category and your brand. Higher category involvement means higher opportunity to build brand involvement and loyalty. In those cases, brands can achieve what the liquor companies refer to as “call brand” status — consumers will ask the bartender, the voice assistant or anyone else for the brand by name. For categories with lower involvement — think paper goods, batteries or staple foods — whatever Alexa suggests will do just fine thanks. No different than when Safeway “suggests” their private label paper towels by merchandising them eye-level next to Bounty.

Anne Howe
BrainTrust

Brands need to pay very close attention to where the customer orders, as Amazon voice interfaces can easily default to a private label recommendation. But at the end of the day, the brand meaning battle is fought all the way through the purchase journey. Brands today must live in the space of being immersed in and making an emotional connection and delivering on efficacy if they are to thrive for the long run. The consumer has to be able to understand the “reason to believe” and the brand benefit in a clear and lasting way.

Bob Phibbs
BrainTrust

Voice certainly is going to be way in the future except it’s lateral. Most people shop visually with related items. They’ll buy on Alexa because they can say it. I think it’s a big leap to say voice will be the same as online or in-store.

Cathy Hotka
BrainTrust

In its current form, voice ordering poses a threat to both brands and retailers. Voice platforms enjoy complete autonomy with no checks or balances. Consumers have no guarantee that the product they specify, from the retailer they request, will be honored. Do we really want to put the future of commerce in trust to Amazon and Google?

Cynthia Holcomb
BrainTrust

Voice is like the small screen at this point in time, difficult to use for shopping. Limited to shopping for specification-driven human inputs and linear outputs, like groceries.

Fearing Amazon will promote its own brands in voice ordering [Alexa] misses the point. Voice commerce is the future. Imagine ordering a jacket. “Alexa I need a black jacket for work.” The successful platform will use human-in-the-loop data processing, which combines machine learning technology with human-generated input.

Or another way to say this, every retailer has silos filled with 1000’s of customer inputs and outputs. The winning platform will translate all these disparate data points into individual customer sensory-preference intelligence. “Alexa, I need a new black jacket.” “Ok, just a minute. Here you go, this jacket matches your sensory-preferences of taste, style, fit, look and feel. I know you will love wearing it!”

Jonathan Brodsky
Guest

Voice ordering is definitely the future, but it’s unlikely to take off in the near term for anything other than commodity products. I wouldn’t use Alexa or Google Home to buy clothing or even a book at this point — there are different apps/platforms that make more sense for that. But for something like a brand of diapers or milk? Sure! It just seems unlikely that it’ll take over as much of commerce as, say, desktop websites.

Ken Morris
BrainTrust

While there is a legitimate concern that voice ordering using Amazon speakers will be in direct competition with Amazon brands and many other retail brands, the opportunity outweighs this threat. Amazon’s domination of the smart speaker market is definitely a concern for everyone, as it gives Amazon an unfair advantage with voice ordering when they control the platform.

Today, retailers need to accept that there are some pitfalls with voice ordering, especially with the Amazon smart speaker, and move beyond their concerns. A bigger threat may be to not participate in voice ordering. It is still in its infancy, but voice ordering is becoming increasingly more important to consumers – especially younger consumers. According to BRP’s Consumer Study, 46 percent of younger consumers (Gen Z and Millennials) are likely or very likely to choose to shop at a retailer that has a voice-activated app over a retailer that doesn’t have this feature. While only a few retailers currently have this capability, the interest from consumers shows that is a desired feature.

Oliver Guy
Guest

I am actually amazed by this. Scott Galloway in his book “The Four” actually talks about Amazon — and specifically voice — being a real danger to brands. The example he uses is AA batteries — where you ask for batteries and Alexa will ship Amazon branded ones rather than Duracell, Energizer etc.

In many respects there is a huge paradox here. One way for brands to avoid benefit would be for people to ask for a product by brand name — “Alexa add Tide to my basket.” While many people might already write “Tide” on their hand written list (because it is shorter than “Washing Powder”) when a brand name becomes synonymous with a product, the brand is lost (think Hoover, Biro).

wpDiscuz
Braintrust
"The battle for product-specific brand preference isn't at the point of voice-order, it's way, way before -- at the very top of the funnel."
"Voice ordering is not a threat and is no more of an opportunity for consumers to make purchases than any other modality ... it is the way that in time, many people will shop."
"...at the end of the day, the brand meaning battle is fought all the way through the purchase journey."

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