Jan 16 2020

NRF 2020: For Retailers, Voice Recognition Is a Major Untapped Opportunity

People are increasingly comfortable with using their voices to shop. Retailers must do more to make it possible.

Modern retailers insist they are obsessed with customer experience, but most haven’t yet solved one of the biggest riddles in the industry: how to help shoppers find and buy merchandise digitally using only their voices.

Humans have been interacting with computers using voice commands for a long time now. The first commercial voice recognition product was introduced in the mid 1990s by Dragon Naturally Speaking, IBM’s Watson won Jeopardy! In 2011, and Amazon released the Echo in 2014.

“Voice isn’t something in the future; it’s happening now,” said Patrick Gauthier, vice president and general manager of Amazon Pay, speaking at NRF 2020 Vision: Retail’s Big Show, the industry’s annual gathering in New York. “There are 100,000 skills from third-party developers that run on Alexa, and we get tens of billions of voice interactions every year on Alexa.”

Still, most retailers have struggled to harness voice recognition. That needs to change, Gauthier argued. People are increasingly demanding the ability to communicate digitally without using their hands, and retail brands that get in front of the trend will benefit greatly.

“We learn to talk before we learn to type,” Gauthier said. “People are aren’t going to be limited to a particular device. Voice untethers people from having to know how to use the device, and that makes commerce human again. With voice, we have the opportunity to make the device adapt to the human, rather than the other way around.” 

MORE FROM BIZTECH AT NRF: Read how retail is in a second wave of digital disruption.

How Consumers Use Voice to Buy Movie Tickets

One company that’s on the voice journey is Atom Tickets, an online and app-based seller of movie tickets backed by a constellation of major Hollywood players, including directors Steven Spielberg, J.J. Abrams and Tyler Perry. Almost 1.3 billion movie tickets were sold last year in the U.S. alone, said Matthew Bakal, Atom Tickets’ co-founder and chairman, and more people are buying tickets using voice commands.

“For us, the key is, how do we make it as easy as possible for people to buy tickets?” he said. “The market for voice is here. People have been talking about it and requesting it.”

Bakal acknowledged some challenges with voice-based experiences today. For example, he said, moviegoers are increasingly attracted to theaters that allow them to choose their own seats; that’s driving people to purchase digitally in advance, with about 65 percent of tickets expected to be purchased digitally by next year. 

But it creates complications for voice purchase. Consumers today can’t simply ask their computer to buy two tickets to a particular movie and a specific theater; they must also go through a series of questions about where they want to sit.

Bakal said Atom is working to solve such challenges by reducing the number of questions that Alexa (or other voice assistant) needs to ask to get customers what they’re looking for. Today, the number of questions consumers must answer is about seven; Atom is trying to get it down to three.

“So you can see how that could increase purchase conversion significantly,” he said.

MORE FROM BIZTECH AT NRF: Read how CISOs say retailers need to find safety in numbers.

Retailers Should Start the Voice Journey Now

According to Amazon’s research, 20 percent of U.S. consumers are expected to make a purchase using voice in the next three years. That may seem like a number small enough to tempt retailers to wait to begin developing their own voice recognition capabilities until the market matures, but that would be a mistake, Gauthier said.

“Twenty percent means innovators and early adopters are already there,” he said. “Early adopters will walk with you. They don’t expect everything to be perfect.” 

Retailers who wait much longer will find that their rivals, including digital-only brands, have beaten them to it, establishing relationships with customers that will be difficult to disrupt. “The time is now because customers are telling us the time is now,” Gauthier said.

For retailers, one reason voice represents a crucial opportunity is that it encourages in-the-moment purchases. A consumer who knows they want to buy something can just tell their device to purchase it and have it sent to their house; no fumbling around with complicated web interfaces. That kind of frictionless buying experience builds customer loyalty and trust.

Gauthier said voice also offers retailers the opportunity to interact with customers efficiently before and after the purchase experience itself, such as with shopping lists and order tracking; and during the shopping experience, such as when consumers are looking for information or advice on what to purchase.

Check out this page for more coverage from the NRF Big Show, and follow us on Twitter at @BizTechMagazine, or the official conference Twitter account, @NRFBigShow, and join the conversation using the hashtag #NRF2020.

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