Alexa has been doing very well, especially in some key markets: in the US and UK the units share of smart speaker sales are both around 65-70%. Parents typically speak well of it; how the kids play, everyone joining in. And Amazon are investing heavily in it.
So, what does it mean for Amazon? And where to go from here?
As the consumer tech space changes fast, Alexa represents ‘option value’ for Amazon as well as an opportunity to sit across the consumption journey. Producers and service providers have competed on brand, product and service, and now they’re competing on purchase journey too.
There’s a shift towards marketing becoming part of product experience, even if it doesn’t feel like ‘marketing’. It’s an engagement model: targeted, personalized and permission based (meaning the consumer is able to shape the entire experience).
Forget the Amazon web page for a minute, instead there’s Alexa and Prime membership, and such a thing as near-instant and near-free doorstep (or to-hand) delivery (ref. packaging designed specifically for Amazon delivery). A consumer wouldn’t need to worry about stocking their place with things that sit there for ages, or stress over whether they have the ingredients for the recipe tonight. The whole idea of ownership and consumption starts to shift. With a tight integration between fulfilment (on a basic level delivery and returns) and identification (voice) in synergy with AI, Alexa could be central to a framework for cross-category permission-based engagement. As a brand, what to do?
- Consider overall UI strategy, including but not limited to the question of integration with Alexa. Voice is an aggregating layer but it’s not a complete UX solution.
- Build a data strategy, to feed an AI solution, which could be driven by sensors, and machine vision.
- Prioritise hardware and software synergies from the ground up, along with AI. People are playing with voice, and as new use cases and lifestyle scenes evolve driven by new behaviour, there is opportunity to create completely new value.
- Perhaps most importantly consider the bigger picture. What kind of future do we believe in creating? There is business potential in ‘good’, and while change is fast there is a chance to shape the direction for more sustainable growth.
The new context demands we re-think what a product solution is and the potential in advanced technology is transformative.