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Voice search: a seismic shift in the geography of retail and the customer experience

March 6, 2019
Voice search: a seismic shift in the geography of retail and the customer experience

BY ANDREW HIND

APPLE, Google and Microsoft have all developed personal assistants for their smartphones (Siri, Google Now and Cortana, respectively) while Amazon has launched ‘Echo’ with a voice-activated assistant, ‘Alexa’. These assistants can be used to do anything from chekking the weather to reviewing your itinerary for the day. Most relevant, at least so far as the retail industry is concerned, and perhaps most revolutionary, is that these personal assistants come with voice search technology.

Voice search has supplemented, and with some smartphone user’s actually supplanted, local, mobile search and the internet when it comes to looking for and, ultimately, making purchases online. As a consequence, voice search is deeply impacting online retail commerce and the customer experience.

In today’s hyper-competitive retail wars, voice search is the new battleground on which retailers compete to attract and retain customers.

Listening to the numbers

Voice search currently makes up 20 per cent of mobile searches, and by 2020 that figure is expected to rise to around 50 per cent. In the United States, the use of voice assistants has been forecasted to rise to around 67 million devices this year. Voice shopping markets are predicted to grow from $2 billion today to a massive $40 billion by 2022 in the U.S and the U.K., with Amazon accounting for 85 per cent of spending.

“Voice technology has been around for quite some time now but while it appears to have undergone a relatively slow, unnoticeable evolution, in reality it is changing radically based on technology innovation and consumer behaviour,” explains Donna Dumont, an Associate Professor of Marketing and Chair of the Entrepreneurship, Marketing, and Social Innovation department in the Bissett School of Business at Mount Royal University. “Recent research indicates that 73 percent of consumers would like to complete tasks by speaking to a digital assistant. And there is expected to be 1.6 billion digital assistant users by 2020. The research also tells us that 50 percent of all searches will be voice by 2020.”

As entrenched as voice-search has become, Steve Tissenbaum, Adjunct Professor, Entrepreneurship and Strategy at Ryerson University, stresses this is just the beginning. In the coming years, voice search will continue to imbed itself further into our daily lives and alter the way we shop.

“As the technology improves and the voice activated systems such as SIRI become better able to discern what is being asked, its usage will increase,” Tissenbaum explains. “We look back to Moore’s Law, loosely stated that computing power doubles approximately every 18-24 months, the trend to increased speech related services will be exponential. With the improvement of speech recognition software and artificial intelligence capabilities the smartphone, and all smart devices for that matter, will more readily anticipate our needs based on our voice commands and requests allowing us greater confidence in its use.”

Simplified research process

Voice search is already changing our shopping habits by cutting out the research process of buying a product. And as Tissenbaum points out, these changes will only be amplified in the coming years. Amazon Alexa, for example, can now recommend its ‘choice’ product to consumers and greatly simplify the route of purchase—naturally, directing users to Amazon itself wherever possible (over 50 per cent of all brand and product searches start on Amazon, meaning other retailers are overlooked more than half of the time).

As the online search-scape continues to rapidly evolve, retailers are faced with the unenviable task of ensuring they can still be found. Indeed, online visibility is now more crucial than ever, but as of yet very few retailers in Canada have developed their own capabilities to leverage the growth in voice operated shopping.

“Most retailers in Canada are slow to invest in emerging technologies due to costs and requirements needed to actually take advantage of the increased capabilities and sales opportunities,” explains Tissenbaum. “However, large Canadian retail multinationals who have deep pockets and a longer strategic horizon will certainly position themselves by integrating new technologies such as speech recognition, augmented reality and artificial intelligence software to engage the consumer at every level of the journey from initial needs identification (search) and comparative shopping to the final decision and payment.”

“With the improvement of speech recognition software and artificial intelligence capabilities the smartphone, and all smart devices for that matter, will more readily anticipate our needs…”

STEVE TISSENBAUM
Ryerson University

Intimate customer understanding

Voice search isn’t just a challenge for retailers. It presents opportunities as well. After all, a spoken query is a direct, real-time window into what a consumer wants at that very moment, and what they think about a product or service. It can even offer valuable insight into a consumer’s lifestyle and what they value. As a result, voice queries are leading to new pools of contextual data that marketers can use to develop more customer-centric engagement strategies. In effect, this data represents the evolutionary next-step of the kinds of information search algorithms have heretofore provided.

With emerging voice search technology, there is the potential to create a true two-way dialogue that’s mutually beneficial to both consumer and retailer. The resulting ability to cross-sell items of particular relevance to the user adds value to the interaction for both parties.

UNDERSTANDING THE FUTURE

20%

Percentage of mobile searches that are currently voice search. It will make up 50% by 2020.

67 Million

Estimated voice assistant devices currently used in the U.S.

$ 40 Billion

Estimated size of the voice shopping market in 2022, up from $2 billion today.

73%

Percentage of consumers who like to complete tasks by speaking to a digital assistant.

1.6 Billion

The estimated number of digital assistant users by 2020.

Source: ComScore

Advances in voice search technology are promising to deliver better content and interactions, which will enable marketers to evolve their approach to the customer experience. The ability to understand tone and the emotional state-of-mind behind it, for example, could take personalization to the next level by allowing marketers to actually get inside shoppers’ heads and understand, in real-time, not only their needs but their underlying desires.

Retail marketers need to adapt quickly to the new reality wherein voice search is an important means of connecting with potential customers. “To succeed with voice-search, marketers will need to share worthy experiences with consumers. Voice is currently an organic channel, so SEO (search engine optimization) strategies should be implemented— marketers need to think ‘how do I get to be the one result, the right answer for consumers?’ when they initiate a voice search,” explains Dumond. “There is currently no data available in this organic environment, so purchasing some media amplification to optimize product feeds can assist in obtaining reports that are not available in organic transactions.”

Levelling the playing field

To date, voice search has largely benefitted Amazon, but this may not always be the case. One day soon, it may actually offer real dividends to small businesses as well. It’s anticipated, for example, that voice search technology’s ability to interpret tone could soon deduce, through tone and words (‘fast’, for example), that we want to see local results first in order to expedite purchase and therefore prioritize results accordingly.

Dumond agrees that the rise in voice search has the potential to level the playing field, to greater or lesser degree, between small retailers and massive retail corporations that have come to dominate the industry.

“Voice does not necessarily negatively impact a smaller business. Just like with the growth in social media marketing which retailers have had to adapt to in recent years, initially this was a real advantage for smaller businesses. Now larger businesses are very active in social media,” she explains. “Research tells us that mobile voice-related searches are threetimes more likely to be local-based than text search. This can be an advantage for the smaller business. Certainly voice is a convenience for consumers. And now, instead of ‘Googling’ best restaurant, voice assistants will lean on the content of customer reviews to decide results. There will now be only one response, and it doesn’t differentiate between brand or size.”

“…mobile voice-related searches are threetimes more likely to be local-based than text search. This can be an advantage for the smaller business.”

DONNA DUMONT, Bissett School of Business at Mount Royal University

“The challenge is, and always has been for small and medium-sized retailers, the drain on their limited resources that is required to keep up with the rapid changes that are manageable and competitive over the long term,” adds Tissenbaum. “The technology game is an expensive one.”

What’s clear, though, is that voice search represents a seismic shift in the geography of retail. And with the growth of connected speakers and voice search which are expected to continue over the next few years, retailers simply cannot afford to ignore it as a marketing and sales channel.

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