Amazon Echo and the Rise of Smart Speaker Shopping
With 50% penetration among U.S. households, more than 80 million Prime members, and the recent acquisition of Whole Foods, Amazon’s continuous expansion is upending the world of retail. And now, even their technology itself is poised to change shopping behavior. Amazon Echo was introduced with much fanfare in 2015. This Alexa-enabled smart speaker not only allows you to make calls, play music, order dinner, hail an Uber, but also shop for items without ever looking at a screen or clicking a buy button.
Amazon Echo is a prime example (no pun intended) of how smart speakers can be life-changing technology. But who exactly is buying Amazon Echo? How are they using their devices, beyond what the commercials say? Is Echo affecting shopping behavior? Do people like their Echo devices?
To get these answers, we identified thousands of Amazon Echo buyers in our InfoScout consumer panel, and surveyed 427 of these individuals to understand how they’re using their devices. Here’s what we learned.
Who Are Amazon Echo Shoppers?
Amazon Echo shoppers are high-income Generation Xers and tend to be Caucasian and married. If these devices become the primary vehicles for purchase, brick-and-mortar retail’s share of high-income shoppers may begin to decline.
Interestingly, only 3% of shoppers below the age of 25 have purchased the product. However, on surveying shoppers, 15% of the intended end users are below the age of 25. In other words, the shopper is not always the consumer.
What about people who don’t own an Echo? Well, 44% haven’t climbed aboard the Echo train because they don’t know what they would do with it. Other non-owners said they’re waiting for Echo to get better (13%) and for the price to come down (13%). However, 8% of non-owners do plan to buy an Echo before the end of the year.
How Are Amazon Echo Owners Using Their Device?
The top three uses involve very simple tasks – listening to music (87%), checking the weather (76%) and time-related capabilities, such as an alarm or timer (56%). Much further down the list are more complex tasks, such as making shopping lists (31%) and shopping online (20%). Although shopping isn’t a primary use case, this is likely to change over time as people get comfortable with their Echo devices.
Is Amazon Echo Affecting Shopping Behavior?
When specifically asked about their purchasing habits, one-third of Echo owners are indeed using the device to make online purchases, but purchase frequency is low, with an average of 4.5 purchases in the past six months.
More than three in 10 purchases over Amazon Echo are replacing brick-and-mortar shopping trips, with 10% of households using Echo to buy a product for the first time. 38% of purchases are impulse buys, perhaps when they run out of an ingredient while cooking dinner, or diapers while changing the baby. Brands need to understand how Echo households behave in order to get a better understanding of shopping behavior changes, and then adapt accordingly.
The biggest barrier to shopping via Echo – the desire to see or read about a product prior to purchase – can’t be overcome. However, other barriers included in the this survey – such as the desire to compare products, not knowing how to make a purchase via Echo, and not trusting the device to place an order correctly – can be overcome with time, as Amazon provides more training and introduces new features.
In fact, 36% of households that haven’t made a purchase via Echo are somewhat or very likely to do so before the end of the year. All signs point to fast growth.
Thumbs Up or Down on Amazon Echo?
Amazon Echo owners love their devices. 81% of households find their device very or extremely useful, and 72% say Echo is very or extremely easy to use. 88% of households are very or extremely likely to recommend Echo to others. About half of the owners would buy another Echo and more than half (52%) of them would buy an Echo as a gift.
As Amazon Echo devices become more ubiquitous and people get more comfortable using them for online shopping, brand loyalty will become even more important than it is today. Retailers and brands need to pay close attention to the emergence of smart speakers as devices for shopping and take steps to build market share in this high-growth channel.