For everyone in the marketing world, Voice marketing has become the buzzword of 2018-2019. Companies are pumping in money like Hummer drivers pump in the gas.
No one wants to miss out,
So today we're gonna talk about riding this avalanche better than the master of dark arts, Danny MacAskill, rides his bike.
For the newbies, let's quickly recap some crazy voice stats.
Voice search is projected to reach 50% of the total online search by 2020 ( comScore ).
In 2017, 16% of American households owned a voice device and the number is expected to reach 55% by 2020 ( OC&C Strategy Consultants).
22% of the voice device owners have purchased something online ( Edison Research ).
Even if we call these numbers sensational and dull them down, it's clear that effects of voice search for the future of commerce could not be overstated.
Why now you might, ask?
Simple, because of the prominence of AI assistants and home speakers.
But what's most important to keep in mind is the power that comes with it, and if you think that Alexa won't try to sell you products by Amazon, or that Amazon won't take fees for having a product ranked higher in voice search, you're well mistaken.
The difference between regular search and voice in terms of buying behavior is incredible.
When generally buying products online, you have:
Longer purchasing time
More information
Alternatives presented
Platform choice
Let's start with the latter, when you search online, you can choose if you want to buy a product from Amazon, E-bay, Alibaba etc. But once you start relying on voice you would be relinquishing this control, because:
A. It's profitable for the platform owners to incentivize usage of their platform in so many ways.
B. Humans are creatures of convenience, and especially when buying through voice where information retention is lower. As prices and attributes are not laying side to side, you would prefer to have less information presented to you.
This has benefits for the end user too, less decision-making time and no decision-making fatigue. However, it would drive a line between winners and losers so large that even Jordan Belfort would not be able to emphasize well enough.
Lets be honest, no one's gonna be buying a Ferrari through voice, but when it comes to generic products and supplies, and once your preferences have been saved, you would be buying more of the same thing from the same provider. Accordingly, if the product/company is not in the top three or five suggestions it does not exist and never even gets into your consideration set.
Note: Another important trend that's gonna come with it, that frankly no one talks about so far, is the rise of new to platform consumers (NTPC). The power of being the first (and only) provider will be so headache-inducing that it would be worth for many companies to start sending free product. Or have systems that detect new users and offer significantly better deals to them.
As for services, right now, Google has an upper hand, because of Google Maps, it has the ability to create location ranking promotions for voice, and with that dominate the Physical service segment of the voice market. But I think it is obvious that sooner or later Amazon and others will join the suit.
Urgency
Since we covered some trends and developments, lets talk about implications.
The implications and degree of potential benefit would vary based on the type of product that you sell.
Low Cost-High Volume (LC-HV)
Low Cost-Low Volume (LC-LV)
High Cost-High Volume (HC-HV)
High Cost-Low Volume (HC-LV)
If you sell LC-HV products (such as groceries, customer packaged goods (CPGs), simple beverages, toilet paper, soap), you would need to start working on voice as soon as possible. As these products are mostly need based, and usually have lower information search requirement (unless you are a health enthusiast), the easiest shift is to buy them through voice. Mostly because as long as the product "does the job", they will have lower switching rate and large lifetime returns.
Note: Groceries Voice and Delivery could be a separate topic, but let's quickly highlight how undervalued it is. According to Nielsen, 49% of Americans (61% of millennials) have purchased CPG's. Walmart, Target, Sam's club are already providing online grocery purchase & delivery services. Assuming the consistency of these services to provide quality groceries at competitive prices and delivery convenience is kept high, the impact of the voice can be unequivocal. We're yet to see if Amazon will get on it with the Whole Foods.
LC-LV, this category might be a double edged sword. On the one hand these generic products would have the same low level of information search as LC-HV, but at the same time would have lower ROI for the voice ads. In the long term, this might result in either
Total elimination of some providers in this category, as ads might cost too much for them, and if they don't try to be in the top, they might as well don't exist.
Price increase on the low volume products, so that ad money becomes more justified per product, and the product becomes positioning/brand oriented.
This effect might be felt similarly by the merchandisers and re sellers who fall in these categories.
HC-LV products will experience arguably the least impact, because people usually take more time and information to consider such decisions, and voice is still not perfect for it. However, if we expect holographic application that aid the voice experience which will be coming to market pretty soon, this segment might experience significant impact too, but we'll leave holographic (AR, VR, MR) marketing for the next conversation.
As for the HC-HV products, they will be extremely dependent on their brand identity, and that's where the money will flow. If we talk about novelty or niche offerings, people are more likely to purchase them after already searching the information for the category. This might bring informational/media branding to a whole another level, where companies would be pushed to, in a sense, become educators in their industry. So the next time some millennial searches for the benefits of grinding coffee at home, Jacobs is there to explain it and hint at their own fair-trade offerings.
In that sense, the search queries for HC-HV are more likely to include brand name in them, as the customer would have done their initial search and evaluation before. Thus this category would also slowly get lower switching rate once more of us start relying on voice, and the companies will be on the extreme ends of winning and losing here too.
As Yuval Noah Harari often mentions in Homo Deus, the age of extreme is on the rise eliminating mediocrity.
In this blog we overviewed some of the recent developments in voice, in the next one we will talk why marketers are lagging, and how you can dominate it.
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