Quick Facts by Strategy Analytics
- Consumer spending on smart home related products (hardware, services, and installation) will reach nearly $96B in 2018
- Spending on smart home devices will account for $53B in 2018
- Consumers worldwide bought 663 million smart home devices in 2017; this will increase to 1.94 billion in 2023, outselling smartphones
Voice control tech
Voice control is a current reality and has evolved to become a proven and reliable AI technology to the point where consumers spent nearly $100B on smart home products in 2018—and those devices are mostly operated through voice commands. These voice commands are processed through various AI-enabled personal assistants, including the well-known Siri, Alexa, Cortana, Samsung S Voice, and Google Now. Newer entrants to the space include Alibaba AliGenie and Xiaomi Xiao Ai.
Intelligent Personal Assistants
AI personal assistants are run through smart home products, including Amazon Echo and Echo Dot; Google Home, Home Mini and Home Hub; Apple HomePod; and there’s also Alibaba Tmall Genie; Xiaomi Xiao AI; and the list keeps growing. These products and devices have been coined—Intelligent Personal Assistants (IPAs)—and can do everything from displaying photos, to playing the news to providing schedule and weather updates; they also enable consumers to purchase products. Certain IPAs even allow for shopping without needing to log in and check out; this allows a consumer to simply say, “purchase Bounty paper towels” and the transaction is completed in a frictionless environment.
Shopping through IPAs to grow 78%
Coresight Research recently announced that in the U.S., the voice-shopping market is predicted to grow at a compound annual growth rate (CAGR) of 78%, from $2 billion in 2018 to $40 billion by 2022. Consumers can now purchase items through voice control from top retailers—anything from consumer packaged goods, to beauty items to, really, anything you could buy at a large box chain store. However, retailers are finding challenges to adopting to this new AI-powered technology.
Retail voice control challenges
All indicators show that retail voice control is going to become the norm over the next few years as consumers become comfortable asking Alexa to deliver more toothpaste and coffee. However, retailers do have a list of challenges ahead of them to make voice shopping more profitable; such as shoppers building a large shopping basket. The current trend with voice shopping is that consumers will order one item at a time as they run out of something; which is in stark contrast to say, writing a grocery list over the course of a few days and then buying several items at once. This occurs due to a lack of visual representation when purchasing through voice; this also leads to other limitations such as voice tech’s inability to drive incremental purchases, complementary purchases, and trading up to more expensive items.
As retailers figure out how to make voice controlled-shopping work for their customers, the estimates are through the roof at how much consumers will spend through AI-assisted shopping and IPAs. All signs indicate that voice-controlled shopping is a worthwhile investment for major retailers.