Retailers See Voice Ordering As More Opportunity Than Threat

February 20, 2019

Currently more than half (54%) of brands are selling their wares on Amazon, a figure predicted to reach almost three-quarters (72%) within the next 5 years, according to survey results [download page] from Feedvisor.

Smart speakers like the Amazon Echo are becoming yet another featured technology in many US households. About one-third (32%) of US adults own a smart speaker and more than three-quarters (76%) have started to use voice assistants, like that of Amazon’s Alexa, to a greater extent as they become more comfortable with using the technologies to purchase online.

Brands are viewing consumers’ increased comfort with voice assistants as less of a threat than an opportunity, per the Feedvisor survey. Seven in 10 (69%) brands taking part in the survey said that they either somewhat or strongly agreed that voice ordering is an opportunity and will play a part in future sales strategies. When asked if voice ordering is a threat to brands, fewer than half (45%) somewhat or strongly agreed.

Data from Digitas suggests one such threat to brand loyalty. When using voice ordering, 85% of consumers admitted that instead of purchasing the specific brand they requested, they have purchased the first option selected by the voice assistant on at least one occasion – which according to Gartner L2, often ends up being Amazon’s own brand when Alexa is being used.

The Looming Threat of Competition

Brands may not be seeing voice ordering as an immediate threat, but they are recognizing that Amazon itself poses the threat of competition. When selling on Amazon, two-thirds of participants agreed (33% somewhat, 33% strongly) that competition with Amazon’s private label products was a concern.

Similarly, it’s not just brands that sell on Amazon, but those that advertise on it as well that see the competition it presents. Recent data from Nanigans revealed that 3 in 10 (31%) brands that advertise on Amazon felt that Amazon was in competition to their own. As such, working with Amazon may in the short term provide increased market reach, but in the long term it could end up being a Faustian bargain.

Of course, with all the brands available on Amazon, competition is fierce. Seven in 10 respondents agreed either somewhat or strongly that competition from other brands on Amazon is a leading concern.

Do the Benefits Outweigh the Threats?

Even with the very real threat of competition that Amazon presents, it is also benefiting brands in a number of ways. Of the surveyed brands that sell on Amazon, more than half of their total e-commerce sales come from the platform, while another 44% of such brands report that between one-quarter and one-half of their e-commerce sales originate on the platform.

The vast majority of brands either currently selling on Amazon (97%) or not currently on Amazon (84%) believe that one of Amazon’s benefits is in acquiring new customers. Fully 85% of brands on Amazon said that new customer acquisition was a major motivation for selling on the platform.

Finally, of the brands that are advertising on Amazon, nearly all (97%) reported seeing either some or a great deal of value. According to the previously mentioned research from Nanigans, ad spend being put towards Amazon is gaining on that of Google and Facebook, with an expected growth in spending allocated to Amazon advertising in the next year.

Want to read more? Download the report here.

About the Data: The results of the report are comprised of survey responses from more than 500 US brands.

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