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StrategyNov 07, 2018

Voice-Recognition Applications: Retail

Grace Lee and Ileana Martinez

Voice-recognition technologies are disrupting existing markets. From widespread smart speaker adoption (47.3 million U.S. adults own a voice-activated smart speaker) to impressive new use cases (Google’s demo at I/O 2018 of its assistant making a phone call to book a hairdresser appointment), voice technologies have reached a tipping point in terms of innovation. Whether these innovations take the form of customer experience improvements or business process optimization, the possibilities for voice are endless and not yet fully understood.

This article is the last in a series that looks at current and emerging voice-enabled applications in the financial services, travel and hospitality, and retail sectors. This article will examine voice technology applications in the retail industry.

Applications of Voice Recognition Technology in Retail

Strategic location was once considered the key to success as a retailer. Before long, however, the internet lent itself to online shopping, and retailers quickly realized they could not only reach customers wherever they were located but also collect more consumer data than ever before.

Technological advancements continue to allow retailers to provide the personal touch of an in-store experience with the convenience of online transactions. The voice-ordering industry in particular has successfully capitalized on the intersection of personalization and convenience, currently generating $2 billion in retail revenue. In order to remain competitive, retailers must invest in voice technologies to satisfy changing consumer expectations.

current applications of voice in retail

Conversational Commerce Via Answer Engine Optimization (AEO)

According to a study by NPR and Edison Research, 57% of Americans surveyed have used smart speakers to order products and services and 26% regularly engage their speakers to add items to their shopping list. This ever-growing rate has given rise to the new field of answer engine optimization (AEO). While search engine optimization (SEO) was built to handle traditional typed searches, which are fragmented and simple, AEO seeks to respond to the longer and more complex syntax of voice searches. Moreover, without the aid of screens to display a list of results, AEO must provide a single, definitive answer to voice searches.

AEO and SEO techniques are similar in that the search engine must understand exactly what the local business is offering in order to return it as a relevant result. For example, Google must know a business’s geographic location, real-time offerings, and prices to find “the cheapest option near me.” However, AEO strategies design voice search to function like a conversation and therefore place more focus on long-tail keywords.

Simply put, the aim of AEO is to increase the likelihood of being returned as a voice search result, typically by enhancing a website with interrogative phrases (e.g., on a FAQ page) and precise, updated information.

Why It Matters

Local AEO is especially important, since a consumer’s decision to opt for a quick voice search over a written search might indicate urgency. In fact, voice searches are three times more likely than text searches to be aimed at finding products that can be purchased locally. Furthermore, 41% of people who own a smart speaker say it feels like talking to a friend. As more consumers adopt voice-enabled shopping, it is essential for local businesses to both create content with conversational syntax and update the information that would match them to consumers with a time-sensitive need.

Omnichannel Convenience Through Google Shopping Actions

If you’ve ever seen something at the store and waited to buy it at a different time or from a different seller, you’re one of many people who would benefit from Shopping Actions.

Announced by Google in March, Shopping Actions allows consumers to save payment details across Google platforms and add products to a ‘universal shopping cart.’ Users can purchase items from different retailers in a single transaction using a Google-hosted checkout flow, which, with Google Assistant, can occur as a simple command.

Shopping Actions uses a pay-per-sale (as opposed to pay-per-click) model. Major retailers like Wal-Mart, Target, Home Depot, Costco Wholesale, PetSmart, and Ulta Beauty have teamed with Google as part of this program, allowing their customers to shop for their products using Google Assistant on their mobile devices and Google Home.

Why It Matters

One in five Americans now has access to a smart speaker, with global shipments of smart speakers growing 210% in the first quarter of 2018 alone. Providing a one-stop shop to purchase items from various retailers allows customers the seamless shopping experience they crave. In fact, retail partners have already seen the average size of a customer’s shopping basket increase by 30% since joining the program.

Precise Personalization Through Rich Data

Voice technology presents a new channel to interact with customers, allowing for the capture of more robust consumer data.  The rich repository of data can then be funneled back through voice assistants to create a personalized customer experience, tailored to each individual’s preferences and shopping tendencies.

Poshmark, a digital marketplace, has already begun marrying the convenience of voice technology and the proliferation of customer data by introducing a feature called “Stylist Match.” Stylist Match allows customers to use their Amazon Alexa to get personalized recommendations and style advice based on the shopper’s account information. As 1-800-Flowers.com’s CEO Chris McCann puts it, “Voice enables us to have a one-to-one relationship with customers on a massive scale.”

Why It Matters

Personalization and recommendations are increasingly important to retail consumers. One study found that 81% of digital suggestions heavily influence a consumer’s final purchase. Implementing tailored recommendations through voice assistants is a strategic way to encourage shoppers to use voice, especially for more emotional purchases.

emerging applications of voice in retail

Understanding Intent by Interpreting Tone of Voice

Though detecting tone of voice is a vital part of communication, the skill has yet to be mastered by voice assistants. Because of this, researchers have begun studying and developing ways for artificial intelligence to understand the nuanced intonations of voice searches, recognize sentiments such as uncertainty, frustration, or urgency, and tailor responses accordingly.

For example, shoppers who search for something with a hesitant tone of voice may not know exactly what they want to find. A voice assistant could detect the hesitancy and offer additional results that may be in line with the original intent of the search.

Why It Matters

The ability to discern consumer intent has always been an important part of winning over customers, garnering loyalty, and meeting customers’ needs in an increasingly personalized way. Retailers now have the opportunity to capitalize on the conversational nature of voice technology to identify and respond to consumers’ intentions.

As this capability advances, retailers will also be able to invest more wisely in the right search keywords by leveraging previously captured data to anticipate consumers’ needs and behavior.

Elevated In-Store Service and Operations With Voice-Controlled IoT

Voice technology not only can be used to enhance customer experience, but also to improve in-store operations. When coupled with the Internet of Things (IoT), voice technology powerfully enables an easily accessible, connected in-store experience.

For example, the Container Store’s voice-controlled IoT system empowers sales associates to quickly access real-time inventory levels and pick-up order information just by saying the word. Instead of the tedium of using walkie-talkies and speakers to relay information, store associates can tap into all store resources simply by speaking into their voice-controlled wearables.

Why It Matters

Despite the rise and buzz of ecommerce, the 2018 Retail Sector Report found that 74% of consumers still prefer brick-and-mortar to online shopping. Consumers are increasingly expecting more from their in-store shopping experience, which includes sales associates’ knowledge and support.

Technology such as the Container Store’s voice-controlled wearables streamline store associates’ communication, dramatically increasing their ability to be both helpful and efficient. As a result of implementing this system, the Container Store has saved an estimated 2,000 hours of employee time per day across its 80 trial stores.

Incentivized Voice Commerce Through Voice-Activated Coupons

While voice commerce continues to gain popularity, some shoppers need an extra incentive to give it a try. In an effort to increase sales and voice commerce traffic, Target and Google paired up to release the first voice-activated coupon, a $15 discount to those who ordered using Google Express via Google’s voice assistant. The promotion was so successful it was cut short because the companies’ goals were reached early.

Target plans to continue its partnership with Google to expand its voice-activated shopping, and other retailers such as Walmart and Home Depot are quickly following suit.

Why It Matters

Amid the excitement surrounding voice technology, many are still exploring ways to monetize voice commerce. This early experiment demonstrates the potential for retailers and voice platforms to partner to deliver promotions that benefit both parties, as well as consumers. Since Target has begun collaborating with the tech giant, the average number of items in Google Express baskets has increased by 20%.

voice is the new mobile

Voice technology is on the rise and is shifting the retail landscape. Over the past two years alone, voice searches of “where can I buy” have skyrocketed by 85%.

Just as mobile introduced a new dimension of commerce that caused retailers to reassess customer expectations and interactions, voice is adding yet another layer of complexity. This additional complexity comes with great opportunity. If implemented thoughtfully and effectively, voice technology will enable retailers to enhance the customer experience, streamline operations, and gain deeper insights on customer behavior.

Interested in learning more about how to implement cutting-edge voice applications? Credera’s ecommerce, digital strategy, and IoT service offerings can work alongside your company to define and implement a voice strategy for your retail business. Contact Credera if you would like to learn more.

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