I left you hanging in Retail review – employees are the missing link, and conversational commerce is the wild card at NRF 2018. In that monster roundup from NRF 2018, aka “The Big Show.” I gave a nod to Capgemini for raising urgency on “conversational commerce.”
But I didn’t look at how brands are falling behind – and what to do about it. Yes, I saw a few brands pushing their voice
beta releases expertise at NRF, but Capgemini’s Shannon Warner believes retailers are far too lackadaisical when it comes to reckoning with the surge in conversational commerce.
Speaking to their NRF-timed report, Conversational Commerce: Why Consumers Are Embracing Voice Assistants, Warner, who is Capgemini’s VP, Retail North America issued a warning to retailers. Stop experimenting with voice, and get serious:
Retails are definitely dipping their toes; they’re experimenting, but most seem to be IT-led experiments. “We’re just creating an Alexa skill, or we’ll just create a capability on Google Home,” but there’s not a whole business behind that.
Warner wants to see retailers asking tougher questions:
- Are we going to drive traffic to our voice channel?
- How are we going to service customers through our voice channel?
- What does the future of the voice channel mean for experiences within our stores?
- What do we need to do with data?
- Do we have to create a new voice based taxonomy?
- Do we have entirely new insights come from the tone and the pace, and the emotion in the voice when consumers are interacting with our voice channel?
She didn’t see much evidence of that at NRF:
We’re definitely not there. They’re barely nascent.
Citing stats from the report, Warner made her case:
I think what’s remarkable, given how nascent the technology is, is that nearly half of consumers are engaged with voice, and 35 percent have actually made a purchase via their smart speaker.
It’s one thing to ask Alexa for the weather or a sports score. It’s another to order commercial services. Does the consumer trusts the voice assistant to understand us, and order the right service, before it turns into a time suck?
The surge in conversational commerce – by the numbers
So what kinds of services are consumers with voice assistants ordering? In their study, which surveyed 5,000 consumers in the US, the UK, France and Germany, Capgemini breaks it out:
- 35 percent are buying products (groceries/home care/clothes)
- 34 percent are ordering meals
- 28 percent are making payments and sending money
- 28 percent are booking an Uber or taxi service
Capgemini found that adoption for voice devices is fast outpacing smart phones. Warner:
It’s really growing fast. Our second report, called Time to Talk, is a joint report between MIT and Thailand Capgemini. In that report, we discovered that the growth rate for smart speakers, is 653 percent, compared to something like 286 percent for mobile phones.
Based on this kind of data, Capgemini believes voice is poised to “revolutionize commerce.” Their stats include:
- Forty percent of consumers polled said they would use a voice instead of a mobile app or website.
- In three years, active users of voice assistants expect 18 percent of their total expenditure to take place via voice assistant, a six-fold increase from today.
- Voice assistants can significantly improve brands’ Net Promoter Scores (NPS). Among users, the NPS of a brand would improve by 19 percentage points when it provides a personal voice assistant globally.
- Consumers with a positive voice experience with voice assistants would spend 16 percent more.
The last bullet jumps out. “16 percent more shopping” is no small amount. But a “positive voice experience” is a must. That’s where the slippery spots are. Maybe I’m a fussy shopper, but I’m reluctant to order from voice. I have a very good idea of what Alexa can process – and what it struggles with. If I could just ask Alexa to order “the scotch tape I like” or “the scotch tape I ordered last summer,” I’d be in business. But I don’t feel like fighting with her.
Why retailers must act on voice commerce
Warner believes these are short term impediments. Yes, most consumers are using voice for media and news. But she says those 35 percent making voice purchases are having good experiences:
That’s another thing that’s in the study is that people are very satisfied with the experience. As you have one great experience, you do it again and again, and again.
Factor in the growing sophistication of “AI” and natural language processing (NLP). That’s why Warner thinks brands without voice commerce are falling behind. In other words, retailers: don’t wait till next year’s NRF to sort this. And don’t just dabble:
I think it’s going to come really fast.
How should retailers tackle conversational commerce?
For retailers ready to act, what next? Miller provided action steps:
- Get C-level sponsorship – “This needs to be a top-down initiative. At the C- level, there needs to be recognition that this is disruptive.”
- Break down team silos – “Retailers need to form cross-functional teams that bring together marketing and merchandising, supply chain, and store operations.”
- Change your CX and data strategy – “They need to figure out how are they going to use this underlying technology to invent the future customer experience. What are they going to do in their stores; what are they going to do to drive traffic; what are they going to do with data; what are they going to do in their supply chain, in order to take advantage of this amazing opportunity that’s at their feet.”
- This is not an IT experiment – “I think they’ll be making a mistake if they look at it as a IT experiment. If they just go out and create a skill and, ‘Okay, we can check that box, we’re done,’ they’re missing the opportunity.”
My take – avoiding the Alexa in the room is going to be tough
I recommend that brands utilize existing AI tech rather than build their own. But that’s not going to fly for many retailers when it comes to Amazon Alexa. Warner agrees:
A lot of retailers aren’t going to participate on that platform.
So what’s the alternative? Warner likens this to the early days of mobile commerce, when companies had to contend with platform chaos, from Blackberry to Apple:
Over time, they figured out how to either, a: partner with companies that manage across that platforms, or they acquired the data. “Here is where our customers actually are, so we’re going to support these two mobile platforms, and not the other ones.” It worked itself out.
Warner doesn’t see platforms and “voice skill building” as the big obstacle. She thinks the hurdle is customer experience:
How are they going to create something compelling that customers are going to use, and how are customers going to find them, through those compelling experiences?
She advises retailers: don’t get tied to a dedicated voice device approach. Voice ordering will be integrated with many smart appliances.
Where we may disagree is over time frames and obstacles. For retailers, avoiding Alexa may prove to be a nightmare. Building voice tech to avoid dealing with Amazon isn’t the answer either. That said, Google Home is a factor, and there are more players, depending on region.
The platform issue isn’t easy because it does tie to customer experience in the end. Voice commerce is disjointed for many consumers (e.g. Alexa at home, iOS at work etc). The issue of recognizing accents and accurate delivery/permissions is crucial. Warner believes voice tech is moving quickly on these fronts, but if a parrot can order supplies from Amazon, we can see obvious security impediments.
Those security impediments are one more reason why corporate adoption of Alexa at Work will be slower than the domestic surge. Warner “definitely sees a place for” voice-at-work tech, but she expects adoption to be slower.
Asking Alexa to finish this article, on the other hand… be careful what you wish for.
Image credit - Photo of Warner at NRF 2018 in New York City by Jon Reed.
Disclosure - NRF provided me with a press pass to NRF 2018. Diginomica is an NRF 2018 media partner.