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Have you ever used Amazon’s Alexa to restock your pantry or order a movie? Have you ever questioned if your company could sustain this form of customer service—or even how this technology works in the first place?

The term “voice commerce” refers to a sales transaction in which a customer communicates directly to a retail website via a voice assistant. It enables the consumer to collect information and place or change an order without the use of a screen or keyboard.

Voice commerce is a keyboard- and screen-free way for a customer or potential customer to communicate via spoken word with a computer.It requires a smart speaker that converts the customer’s words into electronic commands, and an artificial intelligence-driven voice assistant that interprets what the consumer says and translates it into action.

In the case of voice commerce, an online purchase or modification to an order. Among the best-known voice assistants are Alexa (Amazon), Google Assistant (Google), Siri (Apple), and Cortana (Microsoft)—but in this rapidly changing field, new leaders could emerge at any time. Today, voice commerce serves as a relatively new and ever-evolving component of ecommerce. It represents a very small part of overall ecommerce volume (a projected 0.2% in 2023), but is expected to grow rapidly over the next few years.

Read Also: What is Voice Commerce?

To get a sense of how voice commerce works in action, let’s do some shopping. Imagine yourself in the role of a customer using an Amazon smart speaker and Amazon’s Alexa voice assistant to solve a problem: You’re leaving for a trip next week, and you need a new power bank for your phone before you leave.

Customer: Alexa, tell ABC Store to order a power bank for charging my phone.

Alexa: Sure. What brand and capacity would you like?

Customer: Order a Samsung 10,000 mAh power bank.

Alexa: Great. What color would you like?

Customer: What are my options?

Alexa: Silver, white, and black.

Customer: I’ll take silver.

Alexa: That will be $10.99. Would you like to order it?

Customer: Yes, I would.

Alexa: Thanks for placing your order. It will be delivered to your address within three business days.

Now imagine that this whole conversation took place from the comfort of your home while getting your pre-trip checklist done—and you didn’t have to open your phone or computer to complete the transaction. That is voice commerce in action.

While voice-based e-commerce creates new shopping experiences for customers, it also opens up new channels for e-commerce businesses looking to obtain a competitive advantage.  Automatic Speech Recognition (ASR) and Natural Language Understanding (NLU) are core components that enable voice commerce.

Automatic Speech Recognition technology or ASR allows human beings to use normal speech or voice to interact with smart devices or voice assistants.

Natural Language Understanding (NLU) refers to the ability for computers to understand intent with the help of the grammatical structure of and sentence and semantics. Humans have the natural ability to process language and understanding, whereas for machines a combination of such capabilities are key in understanding the intent behind human speech captured by smart devices or voice assistants.

Voice commerce is still new to the retail industry. However, retailers using the technology and tech vendors both offer some suggestions for businesses thinking about adopting the technology.

  • Use conversational keywords. When assigning keywords to your products, keep in mind the way people actually talk. Unlike text searches, which can be very short, voice queries often run six to 10 words in length. “Hey Siri, what’s the best desk lamp available at ABC Store?” is a more likely voice search than “desk lamp.”
  • Improve product content. If your content is too wordy, the voice assistant will compress it, possibly at the cost of clarity. Content that isn’t well organized could create a poor shopping experience for your customers.
  • Focus on repeat orders. Once customer data is established in the system, voice commerce enables very rapid repeat orders, especially of consumables. Offering discounts for repeat voice commerce orders could incentivize this even further.

In 2021, shopping via voice commerce in the US totaled approximately $5 billion—and recent statistics project a nearly fourfold increase for 2023, to $19.4 billion. Moreover, shoppers are aware of it: 72% of queried consumers say they have used voice search with assistants like Siri, Alexa, or Cortana, making voice commerce a logical extension of that habit.

On the other hand, total US voice commerce for 2023 represents only a minute fraction—two-tenths of one percent—of the US ecommerce total, projected for 2023 at $1.01 trillion. And, as noted above, the technology supply side of voice commerce is somewhat unstable, due both to individual company issues and to uncertainties in the rapidly changing chatbot industry.

No matter the uncertainty, customer satisfaction with voice commerce is high: 80% of consumers who have made purchases with voice assistants report themselves as satisfied with the experience. Given these figures, and the rapid strides that are being made with artificial intelligence in 2023, voice commerce seems poised to become an increasingly important component of commerce. Retailers need to pay attention to voice commerce, as its role in your customer relations and online sales strategies will undoubtedly grow.

Already, 65% of 25-49-year-olds use VDAs on a daily basis. Voice commerce will only rise as younger consumers, such as Gen Z, who are more comfortable with voice assistants, continue to make and influence more purchasing decisions.

It is unrivaled in terms of convenience. Customers may order or reorder things such as groceries, paper towels, or laundry detergent without having to stop what they’re doing and input on a phone or computer.

Voice-based e-commerce provides superior personalization since virtual assistants like Alexa have a plethora of data about a consumer’s past purchases, preferences, recent search history, and other behavioral information. It is considerably more likely to offer the appropriate recommendations at the appropriate time.

Delivering personalized results and recommendations to customers purchasing through voice-enabled assistants will continue to give firms that get it right a competitive advantage.

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