Smaller and midsize online retailers have another channel to consider now that Google has enabled its Google Home devices to allow shoppers to buy online using its voice-activated digital assistant.
For now, it’s larger retailers selling through Google Home as participants in the Google Express shopping and delivery service, but smaller retailers should pay close attention to what Google and Amazon.com Inc., No. 1 in the Internet Retailer 2016 Top 500 Guide, are doing with voice-based commerce, says Kevin North, CEO of product data analytics company Terapeak. Google Express offers members same-day delivery on eligible products with participating retailers for $95 a year or $10 a month. Non-members can receive Google Express delivery of eligible orders starting at $4.99 from each store shopped.
Amazon’s voice-based commerce capabilities are growing via its Echo, Echo Dot and Tap devices, which use virtual assistant software Alexa. Amazon last month installed Alexa in its iPhone shopping app to fulfill requests and buy goods. A Domino’s skill allows consumers to order a pizza via Alexa, and a year ago, 1-800-Flowers.com Inc. (No. 57) wrote a skill within the Alexa app that allows consumers to order flowers by verbally asking the program to do so. Such an arrangement to be able to sell products with an Alexa skill has to be approved by Amazon.
Smaller retailers will have to consider how to access those platforms as consumers become more familiar with them, North says. “Most small retailers—think of someone with just a Shopify store—won’t be able to get Amazon or Google to add voice commands specifically to reach their store,” he says. “Instead, they’re going to have to sell [in a way] already supported by Google or Amazon if they want to reach shoppers that are shopping by voice.”
Google’s decision to add commerce capabilities to its Home devices gives retailers who start enabling those services another way to compete with Amazon, North says.
“It means that Amazon.com has competition in the voice-enabled shopping space,” he says. “It also means that voice-enabled shopping is really happening. When there’s only one experience on the market, even if it’s from a large brand, there’s a sink-or-swim question in play. Google is a second 800-pound gorilla, and with Google doing voice-enabled shopping too, we can safely start to talk about a market of voice-enabled shoppers that retailers need to start thinking about reaching.”
Despite Google and Amazon offering voice-based ordering, the service is still in its infancy.
One of the challenges facing Google is how to transition from a world where consumers shop with their eyes on the web to one where those shoppers simply order with their voices, according to Brian Roemmele, founder of Pay Finders, which is an iPhone app that helps shoppers find merchants that accept Apple Pay. Roemmele last month participated in an expert call focused on voice-based commerce that was hosted by private equity firm Robert W. Baird.
“Google’s challenge in a voice-first world will not be product innovation, but rather how to transition from a visual, text-based monetization model toward one that facilitates transactions,” according to a summary of the call from Robert W. Baird. “Brian (Roemmele) also believes there are big opportunities for companies (such as consumer brands) to connect to intelligent agents, and thus skip the traditional intermediaries of e-commerce marketplaces, search engines and aggregator apps.”
Dave Evans, co-founder and chief technology officer at a startup mobile app Stringify, says that while shopping via digital assistant may be in its infancy, the challenge retailers face is how to leverage the tool now so that when use of the devices becomes more widespread, they will be ready and waiting for shoppers.
“I think over time, retailers will have to offer purchasing options via these types of devices or lose out on sales,” he says. “A good analogy is the early days of the (world wide web), retailers quickly learned than not having a website was not an option.”
So far, a handful of retailers are selling through Google Home devices, including Costco Wholesale Corp. (No. 8 in the Top 500), Kohl’s Corp. (No. 19) and Target Corp. (No. 22). Google, which doesn’t release the number of Home devices it has sold, won’t start charging consumers an additional fee until April 30, though the company hasn’t specified what additional fees there could be. The devices sell for $129, roughly the same price as an Alexa-enabled Amazon Tap device and $50 cheaper than the Amazon Echo.