Voice Commerce Could Be the Next Disruptive Tech in Retail

The history of retail is, in many ways, a history of convenience. Sears’s mail order catalog made it easier for people to order a huge range of goods, while railroads made it easy to deliver those goods. Amazon allowed people to shop and order from the comfort of their home, with the products being quickly delivered right to their door.

Voice recognition technology will deliver even more convenience to customers. Talking is something that most of us do every day and adults need no training. Using computers and keyboards, on the other hand, requires effort and education. Consider that the average person types at only 37 to 44 words per minute but can speak 150 words per minute.

Voice search refers to using voice commands to direct a search engine. While this is different from making voice-based purchases, the use difficulties associated with both are similar. If anything, purchasing a product will be more difficult than typing something into a search engine.

In spite of the inconveniences caused by smartphones, mobile commerce is growing. The global mobile retail sector was predicted to have hit $549 billion in 2017 and will rise to $669 in 2018. Expanding mobile commerce should support the growth of voice-assisted shopping. Instead of digging around on diminutive smartphone screens, customers can simply give voice commands.

Indeed, voice commerce is already one of the fastest growing segments in retail. In the United States, it is projected to grow from $2 billion today to $40 billion by 2022, according to a report by OC&C Strategy Consultants. In the UK, it is expected to rise from $200 million to $5 billion in 2022.

Already, 19% of consumers report having made a voice purchase through a voice-controlled service, as revealed in the Walker Sands 2017 Future of Retail study. Millennials, in particular, are prone to shopping via voice, with 43% having made a voice purchase within the last year.

Natural Language Processing (NLP) refers to research focusing on the interaction between computers and natural human languages. Researchers have been working on computer solutions that can interpret, understand, and act upon human language, both in spoken and written forms. Recent advances in NLP have been vital for development of voice tech.

While computers excel at processing structured data, such as math equations, processing organic, unstructured data is far more difficult. Simply getting a computer to recognize speech has required decades of research. Programming computers to accurately interpret speech is likewise an immense challenge. Over the past several years, however, researchers have made major breakthroughs. Natural language processing now allows software to recognize voice, and more importantly for ecommerce, to understand voice commands.

As machine learning and artificial intelligence progress, NLP should continue to advance at an ever-quickening pace. Using machine learning, software can improve itself through trial and error. This reduces the burden on software developers to identify every opportunity for optimization and can speed up the development process.

Voice commerce relies on artificial intelligence. The software solutions have to think for themselves, identifying what customers are asking for and then fulfilling their orders. Like NLP, AI has been making great strides in recent years, allowing voice recognition software to interpret voice commands and act upon them.

Voice commerce will offer competitive advantages for those retailers who adopt it and threats for laggards. Sears revolutionized retail with its mail order catalogs but failed to adapt to the Internet. Instead, Amazon and other new entrants dominated online retail. Now, most Sears stores have shut down and the company is essentially being liquidated. Amazon, on the other hand, has emerged as one of the largest companies in the world.

Rather than replacing sales channels, voice interact will be integrated into online retail, apps, and other services. With market leaders, such as Amazon and Google, moving quickly to adopt voice as another channel, it’s unlikely that a major online retailer will suffer a Sears-like collapse. Smaller retailers should pay close attention to voice-assisted technologies and how much resources major retailers are pouring into them. It could become a threat to smaller retailers who fail to adapt.