CHICAGO – Within two years, a consumer will be able to tell a voice-activated device like Amazon Echo to order the week's groceries – and the device will know exactly what to order and how to pay for it, without any further instructions.
The same thing will occur in our cars and in other places that will house "smart speakers," said Ken Cassar, principal analyst with mobile and e-commerce researcher Slice Intelligence.
“New input devices will be the driver of this new commerce,” Cassar said Wednesday at the annual Internet Retailer Conference. “There are devices being built for replenishment [ongoing orders], appliances are doing these things for us, and wearables will certainly come into play.”
Sensors and artificial intelligence will be the enabling technologies in all of this, further building the Internet of Things as a venue for shopping, Cassar said.
Even before the newly announced Apple HomePod reaches the market, Slice research indicates 25 million digital voice-activated Amazon- or Google-related devices have been sold, meaning about 14 million U.S. households have these devices. At the same time, a growing number of devices from washing machines to printers can alert the consumer of a need to reorder something and pay for it at the same time, Cassar added.
However, this shift in consumer behavior won't take hold right away, said Gian Fulgoni, co-founder and CEO of e-commerce researcher comScore.
“We are not seeing many people using these devices to make payments in an automatic manner,” Fulgoni said. “But that will change very soon and, when it does, [will grow] very quickly.”
The foundation for payments providers to move into the smart-device realm is quickly developing. At the end of 2016, 8% of U.S. households were considered “connected homes” with smart speakers and an average of 12.8 other devices, according to comScore data.
“In a home with a few kids, it is not unusual to have 20 or more connected devices,” Fulgoni said. And even now, one in 10 households are using the smart devices to place orders and compare prices.
Those types of activities keep companies like Amazon in the forefront, and others, like Apple, eager to surpass them.
Small to mid-size e-commerce retailers are struggling to keep pace with the likes of Amazon which is embedding its technology in a growing array of Echo smart devices (which connect to its Alexa voice assistant) and Dash WiFi buttons (which can affix to any appliance to quickly order supplies).
“Clearly, subscription payments are something that smaller retailers should think about, but they should just be scrappy," Slice’s Cassar said. “They don’t have to invest in buttons, there are other ways to do it.”
In that regard, those retailers need their marketing teams to be thinking about interactive voice-activated technology, Cassar added.
“It’s a big threat if you are not visible or the biggest seller,” he said. “Google is going to change this landscape and the Alexa with a screen is going to change it … you have to be on top of that today.”
Amazon has worked on purchasing automation ever since it obtained a patent for one-click payments in 1999, Cassar said. As such, it has been a giant in developing subscription-based payments, such as its Hewlett-Packard deal in 2011 for accepting the payment and delivering ink cartridges when the HP printer sensors say it is time for the owner to buy a new one.
Since introducing Dash Buttons in 2015, Amazon has sold 2.2 million of them, though only 52% of those buttons have been used for an order and payment, Cassar added.