Could voice technology be the next secret weapon in driving retail growth?

According to a report from analysts at Canalys, the worldwide smart speaker market grew by 187 per cent in the second quarter of 2018. Collectively, Apple, Google, Xiaomi, Amazon, and others shipped 16.8 million units, up from nine million in the first quarter. According to Canalys, there will be more than 200 million by the end of this year, while Juniper Research predicts that there will be 8 billion digital voice assistants by 2023. That’s more than one for every person on the planet. By Ash Patel, Chief Information Officer, IRI.

This dramatic growth positions smart speakers as the fastest growing connected devices worldwide and has created a world of opportunities in both English and non-English speaking markets. With each new device launched come new developments in speech recognition accuracy, complexity and applications.

But as familiar as they are to us as consumers, the concept of voice-activated technology is still perceived very much as cutting-edge in the business world. The potential is there, however, and is already a reality for some organisations. Just as voice is starting to become ubiquitous in the home, the opportunity for the retail industry is very real.

Developments in retail innovation

Retail is an industry under pressure, with the grocery market in particular undergoing a process of reinvention as it faces many challenges. New channels are driving growth as old channels decline. The stores of the past are being replaced by a bright digital future, with many retailers thriving, and with other notable casualties, not just on the British high street, but also across European and global markets.

Technology and innovation are fundamental to helping reinvent the grocery sector, redefining the store and the customer experience, whether that’s in product assortment, pricing or promotions – or the way in which retailers engage with us as consumers.

Artificial intelligence (AI) and voice-enabled technology has the capacity to disrupt the retail sector just as it has in the home environment; but not necessarily in the way that you might think.

The ability for consumers to order their groceries from home is the most obvious example of the use of voice technology in retail. But imagine retailers being able to use this technology to make important decisions around category optimisation, for example, product assortment or to help manage stock levels?

Data data everywhere

We have seen an explosion of data in recent years, and nowhere more so than in the grocery sector where retailers are inundated with huge quantities of data from an ever-increasing number of disparate sources, whether point of sale, inventory, e-commerce and customer loyalty data. Data is the key to unlocking consumer behaviour and shopper habits. But the challenge for retailers is in understanding this data, and translating it into actionable insight that will help them to grow their business. Making data-driven decisions often using complex algorithms is becoming more complicated and confined to just a few experts.

This is where the use of voice-enabled technology comes into its own. Voice is the most natural interface of all, providing the ability for anyone to ask simple questions and to get straightforward answers from often complex data. Using voice, retailers can effectively democratise data analysis and decision-making, putting it into the hands of the many, not just the few.

For a store manager looking for recommendations on category management or pricing, or a warehouse operative looking for information on the best-selling products that are low on stock, they can get specific and actionable advice quickly and efficiently. For the retailer it can mean the recovery of lost sales on a huge scale, better management of labour costs and much more.

Retailers slow to capitalise on voice technology

The challenge for retailers is one of change management however. Individuals who have always made decisions based on experience and ‘gut feel’ will never trust ‘a machine’. But with a new younger generation of workers, fed on a diet of Siri and Alexa, it will become instinctive.

The concept of putting the power in the hands of the many versus the few is something that many retailers may find hard to accept. But this idea is a good one, as retailers are able to maintain more control in their organisation and reduce the amount of guesswork and subjective opinion; something that humans are prone to.

There is also the fear that technology may become ‘an unguided missile’, making random or inaccurate decisions if placed in the wrong hands. But, as with any disruptive technology, voice is evolving all the time, and should be a combination of AI and IQ (human) to deliver more accurate results as it continues to learn based on feedback and machine learning.

Even though voice-enabled technology is relatively new in the grocery industry, one leading retailer that IRI is working with in the US is already recovering millions of dollars in lost sales by using the technology to find out the most likely out-of-stock items in every store. These are real results and highlight just why retailers should not delay and should take the plunge.

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