As sales of smart speakers soar and people increasingly opt to chat to their devices, retailers are vying to position themselves to embrace the new era of voice commerce.
Voice is the new black. People are increasingly choosing voice as their preferred interface with their phones and devices as sales of smart speakers rocket and Amazon’s assistant Alexa and Apple’s Siri, become our new best friends.
Smart speaker sales increased by 237% in 2017 with more than one in three people in the US now owning such a device. By 2020, an estimated 50% of search will be made via voice, up from the 20% of Google mobile searches made today.
Although voice is currently far from usurping the traditional combination of keyboard and screens as the interface of choice, retailers recognise the potential for a radical shift in buying habits and are rapidly adapting to ensure they can take advantage of voice-led commerce.
Today, US and UK consumers spend $2 billion per annum via voice commerce, but the figure is predicted to reach $40 billion as soon as 2022.
So how can merchants enhance their platforms to ensure they do not miss out on the lucrative potential of voice commerce? We spoke to Director of New Generation Offering, Arnaud Dubreuil to find out how Ingenico’s latest solution is the next evolution in voice commerce.
What are the opportunities for businesses?
The goal for a merchant is to remove friction for the end-user. Voice commerce is excellent for this because you just interact naturally with a bot. You don’t need to remember anything.
The growth in voice commerce is being driven by technological advancements combined with the convenience factor. Speech recognition is expected to be 95% accurate in 2020 compared with just 50% in 1970, and voice inputs are around three times as fast as typing on a phone.
Right now, all merchants are showing interest, but of course not all segments can be addressed by voice commerce: end-users are understandably influenced by price point. You won’t buy a $1,000 computer using voice commerce, but you might buy a pizza for $15. It makes most sense for items of services that the consumer is sure to want to buy. Often that means recurring purchases, or products with a limited choice. For exceptional, one-off purchases, shoppers prefer to see and compare different products before buying.
What are the advantages for consumers?
It’s easier to access. Searches are quick: you just ask a question and the bot does the hard work for you. And it can be more fun. Imagine you’re watching a soccer match among friends and you want to order a pizza. With voice commerce, you can all order together. You don’t need to pull out your phone, you don’t need to go to your computer, you just order on the spot.
What are the main challenges?
The ideal scenario is to have voice authentication with free speech, which means being able to make a purchase just by speaking naturally to the bot, rather than needing to remember a password. That’s our ultimate goal, and the ultimate goal of all the ecosystem, but at the moment there are technical issues. For example, Google doesn’t allow third-parties to access voice files for privacy issues, so many providers are unable to provide users with the best possible voice commerce experience via Google Home.
However, perhaps a more significant barrier is consumer attitude. We held some end-user focus groups and they told us that as this solution is quite new they would prefer to confirm the payment on their smartphone or device, rather than having a complete experience by voice.
We think that will change down the line as people become more accustomed to purchasing through voice, but at this stage consumers are not ready for it.
Is security an obstacle?
Actually, it’s not the security per se, it’s more people’s perception of security. As it’s a new payment channel, consumers can be sceptical. They might be a bit reluctant initially, but it’s just as secure as online commerce if managed properly.
How does Ingenico’s new voice commerce solution facilitate the process?
Our solution1 allows you to find the item that you want to purchase by voice, and to safely authenticate before performing the payment. We generally do that via your smartphone, either by a standard method such as a dynamic one-time password or by our new ultrasound technology.
In this case, your smart speaker emits a unique sound beyond your hearing range and you simply hold your smart phone within the speaker’s range to confirm that you are present for the purchase.
Ingenico handles all steps of the customer journey including customer enrolment, speaker identification, customer authentication and secure payment processing. It offers alternative scenarios to voice authentication in free speech while setting the stage for it.
Who are the main competitors?
All payment companies are looking at voice commerce, but current solutions are either not very user-friendly or not secure, identifying the buyer rather than authenticating.
For us, the end-user experience is absolutely key. This is a payment method that people are not used to, so if you want to encourage adoption the experience has to be frictionless. We didn’t want to launch our own solution until we knew we had a good end-user experience, and we think this is the best.
1 This activity has received funding from the European Institute of Innovation and Technology (EIT). This body of the European Union receives support from the European Union's Horizon 2020 research and innovation programme.
This article was originally published on blog.ingenico.com. Since October 28, 2020, Ingenico has joined Worldline.