Smartphones revolutionized consumer behavior, and many brands are still adapting. That’s why companies making everything from baby wipes to beer to beauty products should get ready for the next big change in how consumers discover and buy all kinds of products and services:
Virtual personal assistants, like Amazon’s Echo speaker, that respond to voice commands for everything from playing music to checking headlines to ordering take-out and groceries.
Why has the Echo become a hit? Simply put, it’s easy, fast and magical. You can order an Uber, Domino’s pizza or anything from Amazon’s massive catalog. And Echo gets smarter the more you use it.
For brands, this means products that are easy to search for and buy through smart speakers will have a competitive advantage.
By 2020, people worldwide will spend $2.1 billion on these smart speakers — up from $360 million in 2015, predicts Gartner in a new report. And 3.3% of global households will be equipped with such a device by 2020, 25% of them with more than one device.
The reasons for the quick growth?
Competition and the consequent drop in price, both fueled by consumers wanting voice-powered instant gratification in every room of their home (see KITE’s interactive Instant Gratification report).
“Queen of the Internet” Mary Meeker pointed out in her 2016 report that iPhone sales have peaked and Echo sales appear to be taking off, and voice is far more efficient for inputting information than typing.
Amazon created the smart speaker category last year with the Echo, powered by its artificially intelligent assistant Alexa. By pricing the new Echo Dot at $49.99, Amazon is making it easy to both try out the technology and purchase more than one.
Google recently began taking pre-orders for the Home ($129), its Echo competitor powered by Google Assistant (formerly Google Now).
Apple is reportedly prototyping an Echo-like device based on Siri, which Apple recently opened to third-party developers, a critical first step.
By acquiring AI-powered virtual assistant startup Viv, whose founders created Siri and sold it to Apple, Samsung could give all its appliances and electronics, from washing machines to TVs to smartphones, Echo-like capabilities. Devices powered by Microsoft’s Cortana assistant seem likely as well.
While Google Home will add items to your shopping list, it does not yet appear to be integrated with its Google Express shopping service, directly competitive with Amazon Prime. But expect Google to remedy that quickly.
KITE’s recommendation to consumer companies: develop a virtual assistant strategy and start testing initial hypotheses to see if it drives growth for your business.
Contact us to discuss how you can start preparing.