Voice shopping in the UK to be worth £3.5bn by 2022Tuesday, February 27, 2018 | Press release
- Almost half of UK households are forecast to own a smart speaker by 2022, up from 10% today – which is expected to revolutionise how consumers shop
- UK voice transactions through smart speakers are currently worth £0.2bn. This is expected to increase to £3.5bn by 2022.
Shopping through voice-activated devices such as Amazon Echo and Google Home is set to become the next disruptive force in retail. According to new research from OC&C Strategy Consultants released today (February 27th, 2018), £3.5bn will be spent through voice commerce in the UK by 2022.
The rise of smart speakers
Just as the prevalence of smart phones drove the m-commerce market, voice commerce is set to grow as a result of rising smart speaker sales, which have boomed since 2014 when Amazon launched its first product to market. Around 10% of UK households already own a smart speaker but this is projected to increase to c.50% by 2022.
The research shows that in the past year, nearly half of owners (44%) made a purchase using their smart speaker – a much higher figure than initially believed.
The value of voice shopping now stands at £0.2bn, or 0.1% of total online spend, but it is expected to rocket in the next five years to £3.5bn, as consumers become more familiar with the technology and voice activated devices become everyday household objects.
The importance of being an ‘Amazon choice’
The current nature of voice technology means that consumers are mainly using voice shopping to make standalone purchases of low-value consumer goods, like groceries. So far, Amazon Echo leads the tech giants battling for supremacy in the ‘virtual assistant’ space in the UK, outselling Google Home 4 to 1.
For brands to cement their position in the voice commerce sector, achieving Amazon’s ‘choice’ status is key. Amazon will recommend ‘choice’ products when customers request a generic item or a specific brand name isn’t known, such as ‘shampoo’. As consumers have a high propensity (85%) to purchase Amazon’s recommended product, achieving ‘choice’ status can potentially triple sales volume.
Will Hayllar, Partner and Global Head of Consumer Goods at OC&C, commented: “The advent of voice commerce is taking frictionless shopping one step further by reducing the need for customers to ‘research’ product themselves, simplifying the route to purchase. As the data shows, voice commerce will be driven by the rapid uptake of smart speakers and retailers should recognise the enormous potential of tapping into this channel.
However, few retailers have developed their own capabilities that enable them to reap the greater rewards from voice, and the race is on. Businesses must think hard about how their brand integrates with different voice assistant providers’ strengths and how to build customer trust in voice, to maximise their success and improve the bottom line.”
The report’s findings are based on a bespoke piece of consumer research covering 1,500 smart speaker owners conducted in December 2017. This has helped inform speaker penetration, usage and expenditure. In addition, OC&C Analytics recorded product sale rates for 2000 products listed on Amazon over a month period tracking the impact of ‘choice’ on product sales performance.