Conversational commerce continues to evolve from a nascent space to a dynamic and sophisticated payments system that caters to consumer preferences. Voice commerce continues to gain momentum, though its true potential is yet to be seen.
Conversational commerce is coming to a head. What started as a way to cater to Millennials and Gen Z with chat-based commerce has sprawled into a much wider category that includes voice-activated assistants. The tech giants (Amazon, Google, and Microsoft) are not new entrants to this field. They have been heavily promoting voice assistants and this year many merchants and retailers are starting to choose sides.
The popularity of voice-activated assistants cannot be denied; new research shows about 20%—or 47.3 million people—have access to a smart speaker. Google has said that, between October and December of last year, more than one Google Home products were sold every second. We are increasingly moving into a voice-first world, and the impacts on the world of payments are already becoming evident.
Speed and Convenience Rule in Payments
While the growth of voice-activated assistants is clear, the market is still growing. Reports show that consumers own an average of 1.8 smart speakers; however, most (⅔) own only a single device. The more compelling data is around voice commerce. About 11.5% of people who own smart speakers use it for commerce monthly and at least 26% of smart speaker owners have made at least one purchase by voice.
Behind this trend is the desire for faster, easier payments, to which smart speakers cater. As omnichannel commerce takes the front seat, consumers want to be able to purchase at a time and place (and channel) that is most convenient for them. Conversational commerce via voice assistants allows consumers to multi-task and shop while they do other things like make dinner.
Retailers that have already invested in a holistic omnichannel strategy have taken note and are pivoting to prioritize voice payments. According to Capgemini, more than 40 big box retailers—like Walmart, Target, Costco, and more—have already partnered with Google to enable voice-based commerce to their customer base via Google Express, which is accessible via Google Home.
The tide is turning in consumer preferences and even mobile web and mobile app commerce is being encroached by a new generation of consumers that prefer “say to pay”. According to a Capgemini study, 24% of respondents reported preferring voice assistants over apps or physical retail stores currently. That number jumps to 40% when projecting over the next three years. This translates into financial services as well, where 20% of respondents currently prefer using a voice assistant instead of visiting a bank branch—which jumps to 31% on the three-year horizon.
The Votes Are In
Consumers will be voting with their wallets when it comes to preferred commerce channels. Interest in voice commerce is on the rise, and projections point to nearly ⅕ of total purchases taking place via voice assistants in the next three years. Even those that currently don’t have access to or use smart speakers/voice assistants anticipate shifting at least some of their spending to that channel in three years’ time.
Satisfaction levels with purchasing through voice assistants are high. Seventy-one percent of consumers that currently use voice assistants report being satisfied. Some of the reasons behind this satisfaction include flexibility, ease-of-use, and convenience. Users are able to simply speak commands or receive information without spending time typing inquiries. They can also utilize voice assistants from anywhere and on-the-go. Multi-taskers enjoy the added benefit of being able to do two or more things while simultaneously leveraging voice assistants. The automation of routine shopping tasks has proven to be a compelling force behind voice commerce.
Voice-led buying leads to a smoother customer experience, and we’ve really only tapped the surface of this. Currently, retail giants like Amazon allow customers to add an item to their shopping list or cart via a connected speaker. In the future—as the technology evolves—these interactive devices will “learn” a customer’s preferences and be able to add the type and brand of products desired automatically. Through biometrics, it will be able to authorize and authenticate payments for these produces through a user’s voice. The end result is a seamless, embedded, and essentially invisible payment process that happens without any heavy lifting on the customer’s part.
Security Remains Paramount
Like any other card-not-present (CNP) payment channel, voice payments face the onslaught of rising fraud. In September of last year, a number of voice assistants were vulnerable to a Bluetooth security loophole via the Blueborne attack. As with any other CNP channel, malware-driven hacking poses a problem. Voice assistants are also vulnerable to accidental triggering and subsequent unauthorized access to payments.
The continued successful evolution of voice commerce will depend on the effectiveness of authentication and fraud detection measures. Biometrics are playing a key role in the voice commerce space as some platforms like the iPhone require a fingerprint via TouchID and other require a PIN code to be read aloud. THe key will always be finding the balance between security enhancements that prevent fraud and frictionless payments. As biometrics become more advanced, a happy marriage of those two ideas becomes more possible. Voice-tokens and voice-data encryption are just a few of the potential solutions to these security issues, but more remains to be seen.