Only 1 in 10 consumers like the idea of smart assistant devices shopping for them.
At the beginning of this year, 1 in 6 Americans had a digital assistant in their household and Gartner expects that number to reach 75 percent of U.S. households by 2020. To date, many of their tasks are simple such as searching, asking questions, checking the weather or news, and playing music. With regard to shopping, most people are just creating shopping lists, but are not completing the full purchase process. Yet, current forecasts estimate that sales through these devices might quickly reach $40 billion, about 10 percent of online sales. So, are consumers ready to hand over their purchase decisions to these devices? In the HBR article, “Marketing in the Age of Alexa” by Niraj Dawar and Neil Bendle, they state that “brands will need to win the preference of AI platforms as consumers willingly give over their purchase decisions.”
Not so fast. In a question we recently fielded with ProtogeMR*, we found that just 13 percent of consumers agreed, “I like the idea of letting a smart assistant device like Amazon’s Alexa make shopping decisions for me.” In fact, the majority of respondents (67 percent) actually disagreed with this statement, and 41 percent disagreed strongly. Consumers are not quite ready to give up their decision-making authority and let these platforms make brand choices for them.
According to the study by pwc, the majority of consumers would still prefer to shop in a physical store, through a mobile app, or online. This is partly driven by the fact that consumers still don’t trust digital assistants. For example, the PwC study found that 46 percent of consumers said, “I don’t trust my voice assistant to correctly interpret and process my order,” and that’s assuming the consumer has made the selection themselves. In fact, The Information recently reported that only about 2 percent of consumers with Alexa-engaged digital assistants have made purchases with their voice as of August of this year.
Several studies (from pwc, Microsoft, and Google) suggest that consumers are open to shopping more through these devices and having assistance. For example, consider this quote from a Think with Google report: “It should be able to predict what I’d want and help me execute it. Like, ‘Hey! It’s taco Tuesday, your basket is ready with all the ingredients,’” said one consumer. But it is going to take more adoption time for consumers to become more comfortable and trust how algorithms make choices for them. It will take more sharing of consumer data to ensure that the platforms are smart enough to make the call and transparency in how personal data is being used to make selections to give consumers the confidence that they can trust the platforms are operating in their best interest.
This doesn’t mean brands should ignore what is happening in this space, especially if you operate in lower involvement categories that don’t have as complex a purchase cycle. You will need to get savvy about how algorithms will be making recommendation and personalization decisions. A brand may want to leverage voice and chatbot technology more deeply by creating a skill or action to work through these devices. But for now, there is an opening to continue to build deeper consumer relationships as these new platforms gain momentum.
Let’s also not think that consumer choices are irrelevant in this environment. While consumers seem to readily give away their privacy, they may not be so willing to give away their purchasing power.
The Consumer Forecast: I still want to feel like I have agency and control over my purchase decisions. Understand me, yes, but don’t think you can take away my purchasing power.
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* The Agency Oneto data from an omnibus study conducted by ProdegeMR with 500 U.S. adults ages 18+, June 2018.