Is 2017 the Year of Voice Interfaces in Retail?

By  Timothy Tuttle, CEO and Founder, MindMeld — March 16, 2017

UNIQLO, the global casual apparel retailer, has taken the lead on the voice-activated wearables trend with its new customer offering of an expert, artificial intelligence (AI)-powered assistant with deep knowledge about UNIQLO's product catalog, retail locations and more.

"As one of the world's leading fashion apparel companies, UNIQLO is committed to delivering the industry's gold standard for customer service and support," said Makoto Hoketsu, group senior vice president and CTO at Uniqlo's parent company, Fast Retailing.

For all retailers embracing innovation, the opportunity of voice integration represents a land grab as large and important as when Apple first opened the iOS App Store in 2008 for third-party and retail apps. Google now processes roughly 40,000 search queries every second, which translates to more than 3.5 billion searches per day and 1.2 trillion searches per year worldwide. ComScore predicts that by 2020, 50 percent of all searches will be voice searches.

So, Google is the clear winner in search, but who will be the winner in voice-enabled retail? Thus far, Google and Amazon are racing for the title. Earlier this year The New York Times dubbed Amazon the "accidental" early winner in the voice-controlled home. Amazon Echo beat Google Home to market by about two years, but did the device win out by being first rather than best? Many reviewers are noticing that Google Home is "smarter" than Echo and has the ability to understand more complex questions.

Unlike the Echo, Google Home can understand context for follow-up questions; it will answer correctly when the user follows "is that shirt available in a large?" with "and how much does it cost?," for example. But Amazon Echo leads in range of function; the company's historically open relationship with developers has allowed the device to amass more than 3,000 skills. Google Home only opened its SDK this month and its power to integrate with IoT devices and apps is still limited.

Google and Amazon's investment in voice-enabled technology is backed by strong sales figures across the board. Amazon doesn't release its sales numbers, but a Nov. 2016 estimate by Consumer Intelligence Research Partners reports that the company has sold more than 5.1 million Echos in the United States alone since its debut. That's comparable to the early iPhone sales figures, raising the question of whether voice-activated tech will grow to the same level of popularity as touchscreen devices.

Unsurprisingly, awareness of the Echo and devices like it continues to increase, jumping from 20 percent to 69 percent of Amazon users in the span of 16 months. The Echo sold out for the 2016 holiday season, and analysts predicted that 10 million to 12 million virtual assistants would sell as holiday gifts. In fact, just after the holidays Amazon reported that "Customers purchased and gifted a record-setting number of devices from the Amazon Echo family with sales up over 9x compared to last year's holiday season and millions of Alexa devices sold worldwide this year." Google Home also sold out in stores.

Although the sales numbers show promise, the future of voice interfaces depends on the ability to answer increasingly complex questions and integrate with existing apps and consumer needs -- especially in retail where 51 percent of shopping is now done online. Google and Amazon's vision is that new devices will enlist a multitude of specialized services to assist with daily tasks. To order takeout, one could simply say, "Okay, Google. ask Caviar to deliver Kung Pao Chicken from China Cafe." To request a ride, say, "Alexa. Ask Lyft for a ride to JFK." 

Speaking in natural language is three to four times faster than typing, so the addition of voice to consumer devices could feel like a more natural extension of human communication than manual input. The best-case scenario? An interface that understands, "I need a pinstripe suit, you should have my size on file, by Monday," and a world where voice technology is more accurate than touch screens, buttons and possibly even sales associates, accepting an unlimited number of inputs and getting smarter with each addition.

Another avenue for retailers hoping to capitalize on voice search is advertising. Both Google and Amazon are increasingly looking into paid search opportunities in voice, especially since online spending from paid search increased 45 percent year-over-year during the 2016 holiday shopping season.

Although paid search integration into voice interfaces would be relatively simple, advertisers will compete for real estate and will have to rely on very precise targeting for the system to be lucrative. Because of these challenges, we will likely have to wait a while before we see paid voice search come to market. However, when it does, it could be game-changing for retailers looking for an additional lead generator.

It's unclear yet who will dominate voice-controlled technology, but the company that does will create a multi-platform solution that integrates seamlessly with the devices and apps consumers already use, provided those apps have voice capabilities, too.


Timothy Tuttle is CEO and founder of MindMeld, a company that powers conversational interfaces through advanced artifical intelligence.


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