The next consumer technology wave is coming to retail, and fast. Voice-driven assistants such as Amazon’s Alexa and Google Assistant were introduced as hands‑free conveniences for playing music, controlling smart homes, and getting instant information – but they are now poised to become significant shopping conveniences. Voice ordering, also known as conversational commerce, may become a significant shopping channel – sooner than you think.
How significant? A recent study from OC&C Strategy Consultants predicts that voice ordering will drive $40 billion in U.S. consumer spending by 2022.
Readying for the voice ordering challenge
While retailers have become nimbler and more agile in recent years, voice ordering – and its supporting AI, chatbot, and call-center integration capabilities – are unique. Solving issues with the customer experience, usability, data integration, and the management of new tools is especially challenging. Fortunately, the rise of this new $40 billion sales channel is generating tremendous interest among retailers and the solution providers that support them.
Conversational commerce, and the technology that makes it possible, is unique, and there is a learning curve that makes adoption slow from both a retailer and consumer perspective. The idea of doing a pilot of a customer service/voice commerce program is going to be difficult for most retailers because it’s so different. There’s a tendency for retailers to overthink the impact of something like this on their customers. As far as the base technology goes, you can get partners or cloud-based third-party applications to do a lot of the groundwork, but from a data integration standpoint and from an understanding of how you build and manage these tools — that’s going to be a struggle.
While it isn’t going to be an easy transition for retailers, the benefits of conversational commerce are compelling.
However, it’s adoption has some technical challenges, as it requires natural language algorithms to be effective. One main metric used to judge the success of voice processing is accuracy. It is generally accepted that as accuracy moves from 90% to 98%, most consumers will migrate to voice as their primary interface. Today, Google reports to be at about 90% and Baidu says they are at 92%.
Testing the waters of conversational commerce
As retailers test conversational commerce, they may start with customer service use cases that are less dependent on accuracy. If you look at apparel or luxury, you’re seeing companies like Burberry and Tommy Hilfiger use chatbots to play the role of a stylist and provide fashion advice. That’s where you may start seeing relationship building through a chatbot, versus the stylist you’re used to going to at Polo Ralph Lauren. Not to bring this back to Amazon, but the Echo Look can take a picture of you in an outfit, and the long-term theory is to be able to combine this conversational commerce with image recognition. As you start to mix the concept of being able to have a conversation with a computer-based stylist, and then have that computer-based stylist also be able to recognize patterns and colors, and make recommendations from the existing retailer’s catalog, there are some cool opportunities available to retailers.
Let’s not forget the benefits for store associates as voice-assisted technology can also be deployed in the back office of the store. Replacing flash sales reporting and quick activities such as looking up an item in-stock or an associate schedule inquiry, could be performed quickly through voice instead of forcing a store manager to log into a back‑office PC.
As customer and retailer acceptance of this voice-assisted technology progresses, we need to be ready, so we don’t get left behind.
Jeff is a business focused technology strategist with a passion for generating company results through process change and technology innovation.
His experience includes both managing e-Commerce and SaaS businesses and consulting with clients on their growth strategies, business and operating models, customer and market strategies. Jeff also has extensive experience in helping IT and Engineering organizations make the transition to agile development and DevOps methodologies.
Jeff’s combination of consulting and operating experiences in North America, the EU and China enables him to bring a unique perspective to business challenges when partnering with his clients.
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