Clarus Commerce CEO Tom Caporaso comments on why Amazon isn’t pushing voice commerce even though the Echo was a hot seller this holiday season.
(As originally published on Digital Commerce 360 on December 7th, 2017.)
Amazon reported that its Echo Dot voice-activated personal assistant was its best-selling product on Cyber Monday.
Amazon.com Inc. has aggressively pushed sales of its Alexa-enabled voice-activated digital assistants such as the Echo and Echo Dot during this holiday shopping season.
But the retail giant hasn’t done much to encourage shoppers to use those devices to make purchases.
“Voice commerce is still in its early innings,” says Guru Hariharan, a former Amazon manager who is the CEO of retail and e-commerce pricing analytics firm Boomerang Commerce. “While Amazon’s Alexa devices sales have grown year over year, most consumers are using it at home to listen to music, ask questions and check the weather forecast.”
Amazon, No. 1 in the Internet Retailer 2017 Top 500, heavily discounted its Echo devices heading into Cyber Monday, dropping the price of the Echo Dot to $29.99, or 40% off the regular price, and giving the device real estate on its home page. That, at least in part, led to the Echo Dot being the best-selling product on Amazon on Cyber Monday.
When it announced its Cyber Monday deals, Amazon said shoppers buying through Alexa-enabled devices would be able to access certain deals as early as 5 p.m. Pacific on the Sunday before Cyber Monday. Data from e-commerce pricing analytics firm Ugam shows, however, that Amazon offered one early deal via Alexa for Cyber Monday. Ugam did not specify the deal.
Amazon says it had three early access Cyber Monday deals available via Alexa-enabled devices on the following products: Philips hue color smart bulb starter kit, Netgear Nighthawk tri-band gigabit Wi-Fi router and Instant Pot duo plus six-quart 9-in-1 multi-use programmable pressure cooker. The products were available for voice ordering on Sunday night, several hours before the offers were widely available on Amazon.com on Cyber Monday (Nov. 27). It has a similar arrangement for Thanksgiving early access deals that went live for shoppers using Alexa several hours beforehand on Wednesday evening (Nov. 22).
Julia Belanger, vice president at digital marketing agency Isobar, says a modest number of deals via Alexa isn’t surprising given how Amazon has previously brought new innovations along. “Amazon’s general approach to new products is choosing to let them evolve and adjust as they go, waiting to broadly promote them until they’re mature,” she says.
Voice commerce is still in its early stages and consumers are still getting accustomed to using the devices. “Forcing voice commerce onto holiday shoppers this year may do more harm than good from a consumer experience perspective,” says Ryne Misso, director of marketing at Market Track. “As voice commerce becomes more familiar for consumers, look for Amazon to bring voice commerce into their holiday shopping season strategy.”
Retail experts say that selling through Alexa-enabled devices also may limit the number of products a shopper can see and how deeply shoppers can research a product.
“The Echo is great for ordering everyday day items such as paper towels or laundry detergent, but when it comes to making more complex purchases like electronics, consumers would most likely want to do more research and possibly even do some showrooming before ordering,” says Tom Caporaso, CEO of Clarus Commerce, a vendor that works with small to medium-sized retailers create loyalty programs.
“With Amazon’s expansive catalog, it is technically challenging to understand what customers want to buy accurately with primarily voice interactions,” adds Luke Starbuck, vice president of marketing at customer service and retention platform provider Linc.
But just because Amazon isn’t yet aggressively pushing sales through its voice-activated devices doesn’t mean it won’t later in the holiday season.
“We’ve got a little bit of time left between now and Christmas,” says Moody’s lead retail analyst Charlie O’Shea. “I would wait and stay tuned. There are multiple shoes to drop.”