The impact of Amazon’s Alexa on e-commerce

E-Commerce0 comments

 BY GARY HAWKINS Founder and CEO, CART

Is it a Trojan Horse or a big sales opportunity for other retailers and brands?

Retailers everywhere have two new potential customers: Apple’s Siri and Amazon’s Alexa. Alexa is Amazon’s digital assistant brought to life through the company’s Echo home-based speaker device and Siri is Apple’s digital assistant that is available through the company’s iPhone, iPad, Mac computers, and even the in-home Apple TV. What retailers should consider is that these are not simply cool new technologies; Siri and Alexa will potentially shop for millions, even tens of millions, of consumers. However, as incredibly valuable as these new customers are, retailers will never see Siri or Alexa in their stores, given that they are “merely” digital assistants, existing only in the cloud.

When studying how people interact with and use Alexa, many experts have seen a common theme arise. Users often begin using the device to control smart-home devices such as lighting or the thermostat by voice command. The novelty of speaking to Alexa, asking her what the day’s weather forecast is or to provide the daily news, quickly gives way to using Alexa as a resource (“Alexa, please give me a recipe for dinner tonight using chicken.”), slowly embedding Alexa deeper into the user’s life.

Some experts say this is Amazon’s Trojan Horse, as the technology weaves its way beyond a user’s simple interactions with the world, but increasingly, as the gateway to fulfilling needs. Amazon is in the business of selling stuff and it is using its vast logistics capabilities and vast portfolio of products to provide users whatever they want whenever they want it. Amazon believes this “shop by voice” capability will quickly become widespread and can lead to more sales.

Along with integrating Amazon’s Dash buttons and Dash Replenishment Service into a growing number of smart-home appliances, Alexa and the other digital assistants represent the front line in the e-commerce battle. Having an online presence is rapidly becoming the a price of entry for brick-and-mortar retailers wanting to become omnichannel retailers; integrating that online store with automated replenishment services and the growing number of digital assistants is poised to quickly become a necessity.

Alexa can already manage lists, from a to-do list to multiple shopping lists. But Alexa can do even more, automatically ordering products simply by a verbal request. To spur use of Alexa for shopping, over the past month Amazon has promoted Alexa-only deals. Users simply ask “Alexa, what are your deals today?” and Amazon provides key products at deep discounts for Alexa users.

How real is the threat/opportunity posed by these digital assistants? Amazon has sold a reported five million Echo devices since its launch in 2014 and is projected to sell an additional 10 million units this coming year. Google has recently started selling its Google Home device, bringing its digital assistant into the home of dedicated Google users. Apple’s Siri, already available through tens of millions of Apple devices, is also on its way into the home through a new Apple product that may even include cameras for speaker recognition.

If that’s not enough to convince you of how quickly this technology is becoming pervasive, Amazon is integrating Alexa into a growing number of Ford, BMW and Hyundai automobiles. Now while you’re having your first cup of coffee in the morning, you can ask Alexa to start and warm up your car for the commute to work—or order food for dinner while you’re driving to the office. Once you do that, you’ll be fully on board with the vocal commerce revolution.