Voice shopping set to hit £3.5bn in the UK by 2022
Almost half of all UK households are expected to own a smart speaker by 2022, a trend which is set to revolutionise the way we shop.
Today around 10% of UK households own a smart speaker (such as Amazon Echo or Google Home) and voice shopping accounts for £0.2bn of sales (or 0.1% of total online spend). Given the expected uptake in speakers, voice shopping could hit £3.5bn in four years' time according to a new report from OC&C Strategy Consultants.
Approaching half (44%) of all owners of a smart speaker used the device to make a purchase last year which the consultants said was a much higher figure than they had anticipated. This means voice shopping, or voice commerce, could be the next big trend to drive online shopping since the boom generated by m-commerce.
At the moment consumers tend to use this method of shopping to buy standalone low value items, such as groceries. However given Amazon's dominance of the smart speaker market (Amazon Echo outsells Google Home by a factor of four to one), achieving Amazon’s "choice" status is key to success for brands in this space.
If a customer instructs Amazon Echo to purchase an unbranded or generic item, for instance shampoo, Amazon will offer recommendations or its "choices" to the consumer with 85% of consumers having a "high propensity" to purchase according to these recommendations. OC&C estimates that achieving "choice" status could treble a brand's voice shopping sales volume.
“The advent of voice commerce is taking frictionless shopping one step further by reducing the need for customers to ‘research’ product themselves, simplifying the route to purchase. As the data shows, voice commerce will be driven by the rapid uptake of smart speakers and retailers should recognise the enormous potential of tapping into this channel," explained OC&C partner and global head of consumer goods Will Hayllar.
"However, few retailers have developed their own capabilities that enable them to reap the greater rewards from voice, and the race is on. Businesses must think hard about how their brand integrates with different voice assistant providers’ strengths and how to build customer trust in voice, to maximise their success and improve the bottom line," Hallyar added.
OC&C's report findings are based on a bespoke piece of consumer research covering 1,500 smart speaker owners conducted in December 2017. This has helped inform speaker penetration, usage and expenditure. In addition, OC&C Analytics recorded product sale rates for 2,000 products listed on Amazon over a month period tracking the impact of "choice" on product sales performance.