Smart marketers want to see inside the smart home

Voice technology is currently (and rightly) of immense interest to marketers and brands with forecasts that UK/US voice commerce will grow from $2 billion to $40 billion by 2022.

But voice is no different to any nascent technology: wildly varying (and often overly optimistic) predictions of take-up and potential, particularly as it relates to marketing and commerce. We tend to overestimate change that will occur in the next year, and underestimate it over the next 10 years.

Beyond early adopters, the majority part of the consumer curve moves more slowly than perhaps marketers would like, but it does eventually move.

Household penetration is a key predictor. Forecasts are that 43% of Australian homes will be ‘smart’ by 2023. Looking at other similarly disruptive categories and brands including Amazon Prime, Netflix and Uber, we have seen a network effect (or put another way, herd behaviour) where take-up dramatically accelerates once 30% penetration is reached.

We’ll be keeping a close eye on household penetration of voice technology, with the likelihood that the 30% tipping point will be reached by Xmas 2019.

When it comes to use of voice technology in homes, we’re already seeing significant changes in human behaviour with the arrival of smart speakers and voice assistants in over 1 million Australian households.

Consider that decades ago families gathered around the radio for information and entertainment. Then TV came along and the viewing experience became central to family life.

With the arrival of the web and smartphones members of the household went their separate ways, unshackled from a central entertainment focal point.

But now families are coming together again, as smart speakers create a new and more engaging heart of the home. In fact, voice assistants such as Amazon’s Alexa could be considered a new (albeit disembodied) member of the family.

What we know from existing research, including a study by Publicis Media in early 2018 (“The Rise of Voice”), is that interaction with voice assistants is two-way, highly engaging and intimate beyond anything we’ve ever seen. And there’s many examples of brands providing utility to consumers via voice technology with early forays into the space.

The signs are very positive for voice commerce, but timing is always difficult to predict.

It’s not too hard for most of us to think back to the early days of widespread internet use, about 25 years ago. Promises and predictions around e-commerce were rife and varied, but just look where we are now.

Voice is exactly the same, and while we can agree that voice is undoubtedly the most human technology we have ever seen, and that smart speakers are enjoying rapid uptake and use in households all over the world, what of voice commerce? And what does it mean for brands?

While computers, tablets and smartphones seamlessly evolved to be adopted as search and shopping platforms, there’s some obvious barriers with voice technology as it exists right now. But as the technology rapidly evolves, attention turns to the challenges for brands.

Starcom believes that there are three key things for marketers to consider as they prepare for a voice-first future.

1. More than refill purchases

Early experience has shown that in low involvement categories, especially refill purchases, voice assistants make shopping simple. Restocking the home with standard brands and products is as easy as saying “Alexa, order more paper towels”.

Household staples including health and beauty products, cleaning products, pet food and basic pantry items such as coffee pods are being increasingly replenished via voice command and smart speakers.

The addition of screens to Amazon Echo and Google Home products takes things to a whole new level. Conversation is an easier interface to search for items, while screens are a much quicker way to review and understand the results.

We expect the new voice/screen combination to bring far more categories into play in the evolving home shopping experience.

2. Is your brand on the virtual shelf?

Marketers need to consider how consumers will engage with their category and brand via voice. Even with a screen to display search results, it is crucial to understand how far voice searches will go before a visual cue is needed, if at all.

Generic or category searches make the road to brand choice longer, so the role of salience, or being the first brand that comes to mind when someone thinks about the category, becomes increasingly important.

The voice or virtual shelf is reduced to what people already know and love, so mental availability of your brand provides a distinct advantage in a voice-first world. The only mental processing required to move from need to purchase is having the brand name on the tip of your tongue. We might even start to talk about Verbal Availability as the new link to brand choice.

3. What does your brand sound like?

Many brands wouldn’t have previously considered this. You should have a strong grasp of the audio identity of your brand, establishing it outside voice commerce to ensure a smooth transition down the track.

And evaluate what future customer interactions will look (or sound) like. While everyone is finding their feet, experiment a bit with sound and audio mnemonics/“logos” to help your brand stand out.

Consider the future customer journey, and how a group of questions that may be asked of a voice assistant can come back with your brand as the answer. Build on the equity you have, and what you are known for. But start now.

The Future of Connected Living

Starcom is looking beyond technology to changing human behaviour. And we’re about to put our money where our mouth is by conducting a real-world, rolling experiment to observe the future of connected living, including how it impacts brands. Starcom will be looking at these and other aspects of voice technology, as well as broader behaviours in the smart home, as part of our Future of Connected Living research project running throughout 2019.

In conjunction with brand partners, we will be studying technology through the experience of real people, with bespoke fully-connected smart homes and an extended panel of households to validate real-life observations.

This is a rare opportunity to see the logical evolution of household and consumer technology, integrated into the daily lives of everyday people. We expect very rich information and insights as this study progresses.

While it is early days for voice commerce, we are excited to see how this emerging technology is embraced by our smart home panelists, and its impact on human behaviour and brands.

Graeme Wood

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