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Insights

Are the statistics about voice commerce all talk, or is it time for retailers to make a statement?

Once again, voice commerce is being touted as the next big thing in ecommerce. But after so many past predictions failed to come to pass, can retailers make it work – and if so, how do they best plan for a possible boom in the technology?

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Are the statistics about voice commerce all talk, or is it time for retailers to make a statement?

It’s no real surprise that 2019 brought the biggest Black Friday and Cyber Monday to date. However, a few eyebrows may be raised by the purported emergence of a retail technology which, up to now, hasn’t had the success regularly predicted by experts.

This Black Friday, transaction value rose 16.5% in the UK, according to Barclaycard; Adobe claimed that Cyber Monday 2019 was the biggest in US history, raking in $9.2 billion (£7 billion). However, some of the most popular sale purchases during these events – voice assistants like the Amazon Echo and Google Home – are apparently coming full circle and now helping consumers to buy more products during these sales.

Prior to the sales events, Wunderman Thompson predicted that voice commerce would account for 2.5% of all goods purchased online, “rising to a 10% share by 2022”, comparing the emergence of the technology to the widespread boom in mobile ecommerce in 2016.

Hugh Fletcher, the agency’s global head of consultancy and innovation, explained: “The signs are all there: convenient, fast and easy, voice commerce will make its biggest mark on the retail market to date. Amazon will certainly be the biggest player in the space, looking to discount its own voice-enabled assistants to move further into the home and ‘own the interface’ with its customers.”

We’re yet to see statistics about just how many purchases were made using voice commerce during this year, but in 2018, just 2% of Amazon customers used Alexa’s voice shopping feature. That’s not 2.5% of all goods bought online; that’s 2% of one consumer base with a company that has pushed its voice technology incredibly hard.

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If you’ve read any of the predictions regarding voice tech in the last few years, it may be that Wunderman Thompson is continuing a trend for pie-in-the-sky forecasts for the technology. Still, it does beg two simple questions: should retailers plan for a voice-powered future, and if so, what should they do?

To understand the opportunities, it’s important to first look at the current state of voice technology.

What problems do people have with voice technology?

Ever since the introduction of Siri on mobile devices in 2011, and later the creation of the smart speaker with the Echo in 2014, the excitement surrounding voice commerce hasn’t relented. Yet here we are, eight years on from its inception. In real terms, the problems that consumers had with Apple’s pioneer eight years ago continue to hamper the user experience now.

Voice tech simply doesn’t work well enough

In April, leading market research company Forrester tested the ability of the leading voice assistants from Amazon, Apple, Google and Microsoft. After asking every single one a set of 180 questions about products and services, each one was ranked as passing or failing the challenge. As a whole, the quartet couldn’t answer two out of three questions (65%).

Forrester cited “failure to provide direct answers”, “inability to understand context or conversation”, and “bad user experience” as the three main problems facing consumers. Naturally, not getting an answer when asking comparative questions (“which company sells the softest men’s sweaters”) or even which products are best, means the research stage is hampered.

Why this affects voice commerce: Even if browsing was done on a laptop or mobile, voice tech seems like an unnecessary extra step: you might as well buy with those devices if you’ve already used them to search. Meanwhile, the poor dependability of voice recognition across assistants like Echo is enough to stop people combining bad service with their credit card details.

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It’s too slow for today’s impatient world

One of the most obvious issues with voice technology is that you have to have a full conversation to get anything potentially done. For every question you ask, you have to listen to an answer.

Why this affects voice commerce: Say that we live in a perfect world and voice commerce works. You want to buy a new, different pair of trainers. You could reasonably find yourself asking questions about the sizes available, colours offered, the price of each pair, materials used (e.g. suede, leather), review rating, delivery timings and costs – and that’s before you’ve even chosen and confirmed your purchase.

In the same space of time, you could have compared much more quickly online, across a vast array of sellers. And all the while, you still don’t know what your trainers will look like until you get them – another massive issue with voice commerce.

Most products still need visual checking

This is where Wunderman Thompson’s comparison between voice and mobile ecommerce falls flat. Mobiles didn’t exactly reinvent the wheel when taking people away from laptops or even tablets; they’re just a smaller, more refined version of existing technology. The biggest challenges were for retailers to make websites better for the experience, while consumers needed time to trust their devices as a means of purchasing.

Why this affects voice commerce: Voice purchasing effectively make the purchase of countless, aesthetically important items instantly problematic: clothing, home furnishings, beauty products and electronics all rely on the eyes to sell.

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The reality for voice commerce: repeat/necessity orders

The future of voice assistants in retail isn’t their use as another option for a sales process that’s already fixed. It’s about fixing a different issue entirely.

Speaking with Digiday, Goodway Group’s Amanda Martin put it simply: voice assistants can be used to purchase “cheap, commoditised products that need to be replenished regularly”, such as toilet paper or kitchen towels. It’s the smart speaker’s job to “remember the customer’s purchase history and the customer will be easily able to carry out repeat orders”.

Ultimately, voice commerce could find a useful niche by putting a stop to forgetting those banal necessities. Those items you know you like a certain way, but ultimately don’t care too much about, will no longer be recorded through notes on the fridge or your phone; instead, you’ll just add it to your shopping list, or buy it outright, using your voice assistant.

To make the most of this functionality, retailers can explore options to respond to simpler demands with convenience and certainty at their heart. One of the pioneers of voice technology, Amazon, already operates a Basics range. As James Moar of market research firm Juniper told Wired, it’s “full of products that are simple enough to not need comparison, and so is most able to recommend products to be bought through voice”.

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This does, naturally, have the opportunity to extend past commodities. Should you have bought a pair of size 12 Adidas Gazelle trainers in blue and white suede and you need a replacement pair, you’re no more than a couple of voice commands away from ordering them again.

Retailers can still prepare for a possible boom in voice commerce

Voice commerce is certainly happening, but not at the rate or in the ways predicted by experts in its formative years. However, there are some major takeaways for retailers who have the R&D capabilities and budgets to explore their options. After all, trailblazers will undoubtedly stand to reap major benefits if it does take off.

Optimise your website’s search, product markup and capabilities

The technology may not be able to explore the web in the ways mobiles can right now, but it may be something that emerges as major players explore ways for smart speakers to do it. Naturally, your products will need to be found if you’re going to sell them via voice.

Consider voice app opportunities

Anyone who’s used an Amazon Echo knows that it’s not exclusive to Amazon selling. The likes of JD Sports, Sainsbury’s, AO, Morrisons and even Autoglass have created apps to help them do their shopping, with varied success. Explore the possibilities here: if a boom in voice commerce comes, you’ll already be there across devices and, if you’re better than your peers also operating on the platform, you’ll get a leg up on them too.

Consider which products – if any – may be in regular demand

It’s not just supermarkets that will see regular orders of the same goods. As with AmazonBasics, there’s a real market for products required and delivered on a regular basis. Consider if there’s an opportunity to build loyalty with emerging voice commerce customers by offering FMCGs via voice.

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Add voice search SEO to your site

Providing your product markup is top-notch, it stands to reason that you could bolster your position further with the addition of voice search SEO to your website (which is markedly different to traditional SEO). As Forbes’ Gabriel Shaoolian explained, “search engines such as Google are placing a higher emphasis on voice search optimisation” – meaning you get the benefits of better SEO performance overall.

Have fun with your brand’s voice presence

Don’t forget that voice commerce, and the technology behind it, is still evolving – as a result, it’s still exciting. Even if it’s not for you or your product offering, don’t exclude yourself from voice tech; just having a presence, however superfluous or even daft, will maintain or create connections with your customers across another platform.

Insights

As big-box retail continues its decline, it's time for a collaborative high-street renaissance

In its current form, the department store retail model continues to fail. Retailers need to respond and focus to changing demand, otherwise more big units will be abandoned – and those already lying empty will never be resuscitated.

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As big-box retail continues its decline, it's time for a collaborative high-street renaissance

Huge, empty retail units are increasing in number, and it’s only going to get worse. Even though the problem of vacant commercial real estate has accelerated in the last five years, we don’t seem close to providing a real response to the issue.

In the coming months, Marks & Spencer is closing at least 110 stores; Debenhams will shutter nearly two-dozen shops; meanwhile, House of Fraser may follow BHS into oblivion sooner than we think, given owner Mike Ashley’s less-than-positive view of his acquisition. Each closure will leave another huge, empty unit behind: one more mausoleum to a business model which, in its current form, does not cater to the modern consumer.

The current state of “recovery”

An obvious saving grace for large units has come in the form of ever-successful large retailers such as B&M, Matalan, TK Maxx and The Range. However, brands like these can’t and shouldn’t be expected to save every vast building, nor can they. The way we now shop is irreversibly different to how it was even ten years ago, and it may only be a matter of time before some of these replacement tenants encounter the same fate as their predecessors, if they don’t listen to customers.

In other (often more affluent) areas, these retailer replacements aren’t being courted just because one used to occupy the same real estate. Instead, units are being repurposed entirely, highlighting a shift in high-street function to better reflect modern demand. Some Debenhams sites, which are slated to close for good in January 2020, are already the focus of conversion. Stratford's store will become an 80-room hotel, Folkestone's will likely become a cinema, while plans have been submitted to convert Canterbury’s former store into a combination of smaller units and flats.

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In Stratford’s case, the move from store to hotel is understandable: it’s the birthplace of William Shakespeare and close to the Cotswolds, giving it nearly three million tourists every year. At the moment, Folkestone only has a two-screen, old-fashioned independent cinema to serve 50,000 locals. Cambridge’s population has grown by 25,000 in the last five years and has a strong independent store scene.

The changes show smart responsiveness from retailers, councils and landlords, who appear to be working together to make simple yet understandable regeneration attempts to reply to basic demands or shortages.

However, the same cannot be said for other newly Debenhams-free locations like Stockton-upon-Tees and Wolverhampton, which don’t exactly provide the same draw for tourists. Retailers as well as landlords and councils should know now, more than ever, that they must work together if these units are to bounce back. To succeed, there needs to be a wholesale cultural change at all levels, specifically adopting a collaborative approach.

How retailers can help: Diversification and collaboration

One thing’s for sure: there’s no longer a need to simply pack stores with goods to attract customers. Stores now need to be as experiential as they are useful, especially if they also operate a strong internet presence – and compete with one. The advantages that bricks-and-mortar shops have all play to a basic principle: the ability to provide a tangible, exciting experience, giving value back to a consumer that has to spend time and money to get there in the first place.

Pop-up stores within large spaces offer incredible opportunities for those with large units: offering an open space to otherwise unrepresented brands on the high street, such as online-only or start-up companies, is a great way to encourage people to enter the store on a regular basis. Even higher-end brands like Rapha are taking Clubhouses around the world through this initiative, while luxury companies like Mulberry are installing themselves in temporary locations. Most impressively, Amazon dropped itself into the heart of London with a daily rotation of products.

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These go far beyond the standard way that department stores do things. It’s not just a case of giving a company a section of a store, or a few rails in one corner: it’s about providing them with a large area with free reign to do what they like, which once again brings footfall. With the right partnerships, there’s potential to provide the space itself for free, benefiting everyone.

It doesn’t need to be all about selling, either. As Puma proves in New York, many people can get involved with a brand or service after being wooed by experiential or product demonstration spaces that complement the brand. While most companies don’t have the money to install F1 simulators like Puma does, certain areas of large units should be considered as stages to demonstrate products. Of course, current department stores provide things such as make-up counters for its products, but this isn’t exciting in the slightest – it’s merely expected.

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This predictability wasn’t the case when we visited Decathlon in London, which regularly goes one step further to host regular events with external organisations to maximise excitement for its complementary product range – most notably, it uses its roof space as a basketball court. The sheer range of day-to-day demonstration zones allow people of all ages to try pretty much any product available; there’s even a regular slot filled by a PGA Tour golfer to teach aspiring players how to drive (using Decathlon’s range of drivers, of course).

Once a business sets out to break the mould, it can go even further and reshape its entire proposition. Such is the case with Santander’s new Work Café, which we visited this autumn. With it, the bank – itself in an industry plagued by rampant high-street closures due to changing tastes brought about by the internet – reworked itself around the ever-popular coffee shop culture. As a result, it has maintained a constant popularity in Leeds, while making people aware of the bank and its offerings through clever branding, incredibly helpful staff and all the standard facilities you’d expect from a physical bank.

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Finally, there must always be a means of tying together the omnichannel experience with seamless logistics. Fast, free click and collect in tandem with in-store stock check not only guarantees enhanced footfall, but also provides ample opportunity to sell again. Even external pick-up opportunities, such as the Kohl’s partnership with Amazon in the US, shows how people will visit somewhere solely for the guarantee they’ll get what they order – even if it’s not from that company.

Fundamentally, the reason customers visit the high street is no longer about the products being sold, unless they literally cannot be found anywhere else. Big spaces mean big opportunities to bring a variety of monetised leisure experiences to visitors, just as cinemas and hotels do.

It’s not all on retailers

Left vacant, large units are retail’s equivalent of the “broken windows theory”: they only encourage nearby businesses to up sticks and move elsewhere, making the problem much worse and digging a deeper hole for landlords themselves. They can’t be filled overnight, but they can be put to beneficial use in the interim – while providing a much needed selling point.

Recently, Savills discussed “meanwhile” spaces: units used for “charity initiatives, community facilities, and health and wellbeing enterprises for staff and visitors”. Savills cited how a shopping centre in Exeter donated a unit for a seven-week period to the YMCA, which was “then used the space to train young people in areas such as finance, marketing and customer services in order to help them find employment opportunities”.

Elsewhere, ping pong parlours were run by Table Tennis England; another unit was “used to collect and store unwanted warm coats, jumpers and sleeping bags donated by local people in order to help the homeless”. While it’s not the duty of landlords to kowtow to local causes, it’s a real win-win when there are no deals on the table; footfall is maintained, big units are put to good use, and other businesses don’t suffer.

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Of course, local and national government has a part to play. New ideas are needed to develop a real, localised vision for the future of the British high street. The central focus must be on basic requirements that complement the need to use and enjoy the high street: facilities that make high streets essential, much like they were before the advent of ecommerce. They don’t need to occupy prime real estate; they just need to be there.

Here in Leeds – one of the ten biggest cities in the UK – there’s not one drop-in doctor’s clinic in the city centre; only a couple of private GPs and dentists. Yet people actively need healthcare, and with millions of people working near high streets, it’s only reasonable to make spaces available for people who have limited time to spare to make or fulfil an appointment. It’s time for the government to better enable them to return, especially with so many void units begging for anything useful; even much-maligned betting shops are now closing in their droves.

As Savills explains, there's a real demand for “health and wellbeing enterprises for staff and visitors”. The opportunity for authorities to make a deal with landlords for a floor of their empty large units, in order to support dentists and other healthcare services, would both make landlords’ properties more used, but deliver basic and often necessary services for all.

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Work together, succeed together

Without careful planning, collaboration and open discussions between all players involved with the high street, large retail units will be unable to sustain themselves. But the bottom line is simple: if large units can be filled, they need to respond to modern demand and make the high street worth visiting. If they no longer serve a purpose, they cannot be left empty in the hope something will take the space on – they need to be repurposed.

Despite a somewhat gloomy outlook, what must never be forgotten is that the high street will always be the heart of its community; as such, it’ll still serve as an important place for shopping, entertainment and social gatherings. If it’s to recover – or even sustain itself in the face of both online and offline competition – those overseeing its success must break the habits of the last two generations and develop new, positive and responsive uses for these spaces.