How Amazon Echo is Poised to Change Retail Marketing

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Every year, we as consumers are fed a laundry list of tech breakthroughs that feels like it’s centuries away from being fully realized. Artificial intelligence, machine learning, cashless currencies, personal assistant devices and full-featured, voice-controlled user interfaces—all of these things, we’re promised, will be real and tangible and brought to market soon, or so the industry insiders say.

While these may seem like empty promises to consumers, they’re closer to reality than they may appear, and Amazon is working to accelerate the timeline. How, you may ask? Through brute force consumer adoption… kinda.

The Influx

If you’re on the web, then you’ve no doubt heard of Amazon Prime Day, the annual event where the retail giant posts thousands of discounts and deals available to those who subscribe to their Amazon Prime service. Each year, the revenue generated by the event rivals that of both Black Friday and Cyber Monday. Amazon claims that in 2017, Prime Day revenue grew by 60% over 2016.

As one of the many Prime Day promotions, Amazon slashed the price of their entry-level voice assistant, the Echo Dot, to just $35 (regularly $50 as of this writing) ultimately boosting it to the top of the bestseller list for the millions of products sold on Prime Day. This certainly contributed to the Echo’s 70% market share of voice-enabled personal assistant devices. In addition, thanks to Amazon’s recent acquisition of Whole Foods, Echos/Echo Dots can currently be purchased at a reduced price in select stores.

The Importance

Why would Amazon decrease the price of their hardware so drastically? Why would they sacrifice profit margins? For one, they have always been bullish in this regard, viewing expansion and investment opportunities as loss leaders, but there is another layer to it. By placing an Echo/Echo Dot (powered by their voice service, Alexa) in so many homes, they’ve essentially built millions of in-home, frictionless, direct-to-Amazon purchase hubs. With a simple voice command, Amazon Prime members can have their preferred products ordered and delivered to their home in just a few business days. Many devices have connected users to entertainment, home automation and information, but no other voice-search personal assistant has created such a seamless purchase pipeline, one that only Amazon could facilitate.

While Google Express has offered consumers the option to purchase products via the Google Home device for some time, their recently announced partnership with Walmart looks to challenge Amazon’s current position in the market. But, with the Google Home only owning 24% of the voice search personal assistant market, the Echo and Echo Dot environment is where marketers should first look to take immediate action.

The Implications

What are the key takeaways from this rapid influx of devices in the marketplace? First and foremost, the time to get serious about voice search is now. For years, SEO experts have warned of the adoption of voice search and the challenges it poses to the online ecosystem. According to eMarketer, 60.5 million Americans use virtual assistants at least once per month, driven largely by the ⅓ of all millennials utilizing this technology. This can and will affect the way that SEOs and marketers target keywords, position content and deliver resources online. Sooner than later, the world of search engine optimization must change to cater to searches in the form of questions, requests and searches for recommendations. Think less “Chinese restaurant in Fresno,” and more “kung pao chicken near me.”

No longer are you safe by simply vying for the top position on organic search engine results pages, but now brands must start thinking a step further… how do you earn the automatic purchase? For brands who manufacture products like consumer packaged goods (food and beverage, especially), Amazon’s ubiquity presents another unique challenge.

For brands like Kashi, their struggle is twofold. Not only are they vying for the top ranking for the search term “whole grain cereal,” but they must also battle to be Amazon’s preferred seller for their own branded searches like “Kashi GOLEAN Crunch Cereal.” Additionally, once Alexa has identified your order preference (product and buyer), it will repeat that order any time you make a request such as “reorder cereal.” This means you may stand to lose all future orders for your market category if you lose the very first order. For manufacturers, this means that you should not only consider SEO optimizations, but Amazon product optimizations. And you must not only consider Amazon product optimizations, but optimizations for Alexa voice search specifically. Those brands that don’t take action will not only be left behind by competitor brands, but by savvy retailers selling that brand’s own products.

The reality is those technological leaps that seem so far away are pretty much all here. Artificial intelligence, machine learning, cash-free checkouts—they’re all part of the smart assistant ecosystem. In the new environment of increasingly adopted voice commerce, smart brands are capitalizing on the Amazon platform, even if they already maintain an existing e-commerce store. Not only are they making their products available on Amazon, but they’re optimizing them for the platform and positioning them differently there than other markets on the web.

Additionally, Amazon has made their “Alexa Skills” development platform more widely available to brands. Developers are creating custom experiences that cater to Echo users. Actions such as checking your Capital One credit card balance, travel pricing estimates via Kayak and placing and tracking a pizza order from Dominos are all possible with nothing more than a series of voice commands. And while the vast majority of the 10,000 “Skills” available to Alexa users are mostly junk, like Taco Facts and a “Guess My Number,” there is a real opportunity for smart marketers to create integrations that make their brand part of users’ daily, voice-controlled lives.

Questions? Comments? Contact Cory at [email protected]

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