Voice Commerce Grows
Dec 22, 2020
7 MIN READ

The Rapid Growth of Voice Commerce and Touchless Payments During a Pandemic

Convenience and accessibility are two of the factors that have spurred the rapid growth of ecommerce over the last few years. When the pandemic hit, it acted as a catalyst for an almost immediate spike in the usage of voice assistants, especially in industries where consumers are now avoiding touching surfaces, using cash, and interacting with other humans to complete transactions.

 “U.S. retailers and technology providers should urgently prioritize improving contactless infrastructure to capitalize on this growing trend.” 

Juniper Research

According to a report by Elavon, even before the pandemic, the use of cash has long been declining, representing only 26% of consumer transactions in 2019. How much COVID-19 will accelerate voice commerce is yet to be seen, but projections for touchless transactions continue to be aggressive, projected to reach $6 trillion globally by 2024, according to Juniper Research. In its report, Juniper recommends that, “U.S. retailers and technology providers should urgently prioritize improving contactless infrastructure to capitalize on this growing trend.

The contactless economy is already impacting major industries such as retail and hospitality. For these industries, in particular, the move toward less contact, improved hygiene, and greater personal safety has expanded beyond the realm of payments into other operational activities and guest experiences.

Voice assistants personalize contactless restaurant experiences

Prior to the pandemic, consumers rated their dining experiences based on the human factor: Unhurried service, friendliness, and personalized experiences along with exceptional food quality. Now, safety and the ability to order, pick-up, and pay for food with minimal personal interaction are the keys to consumer satisfaction for all types of restaurants and fast food chains. 

According to Rakuten Ready, online orders for pick-up rose 202% between March and May 2020 with almost 30% of all orders by first-time online order users. The shift toward contactless experiences has changed every aspect of interactions with restaurants, resulting in huge shifts in buyer behavior and restaurant solutions to meet consumer demands.

“Buying behavior has been altered dramatically since the start of the pandemic with consumers leveraging Order for Pickup not only for convenience but also as a contactless solution that they expect to lower their risk when shopping at a merchant.” 

Rakuten Ready Report

In August, MasterCard announced a solution for Quick Service Restaurants (QSRs) that combined the growing desire among consumers for contactless payments and less human interaction with the need for greater efficiency and time savings in drive-thru and drive-in restaurants. Mastercard’s AI Powered Drive Through and Shop Anywhere solutions are currently rolling out in Sonic and White Castle restaurants in the US. 

In partnership with SoundHound Inc. and Rekor Systems, MasterCard developed a frictionless drive-through experience that includes license plate recognition and a digital voice assistant—powered by Houndify. The solution not only allows customers to order and pick-up food and beverages using only their voice, it also allows the restaurant chains to create personalized experiences by leveraging their loyalty programs.

The trends toward touchless payments and contactless restaurant experiences coupled with players from adjacent industries, such as credit card companies, stepping up to create innovative solutions are strong indicators that more customers will be talking to voice assistants for ordering and payment in the near future.

Voice technology checks in at hotels

Even before the current pandemic, hotels had been moving towards more contactless check-in and touchless in-room experiences and on-property functions. Now, the industry is fast-tracking those efforts to bring customers back by making them feel safer and more secure. 

Touchless hotel check-in through voice-enabled kiosks, smart hotel rooms with keyless entry, voice-enabled in-room devices, and voice controlled smart devices such as thermostats and lights are just a few of the technologies that hoteliers are racing to implement.

In the near future, hotel rooms without voice assistant technology will be regarded by guests the same way a room without a TV or movie rentals might have been viewed in the past. According to a report by Angie Hospitality, 49% of guests say their hotel selection is influenced by high-tech features in guest rooms and that investing in technology reportedly increases in-room sales revenue by 20%. 

As touchless interactions and personalized experiences grow in importance, consumers have adjusted their concerns about privacy to allow for hotel brands to use their data to improve the travel experience. In fact, Angie Hospitality found that 57% of U.S. travelers actually want brands to use their data to personalize their travel. Through the implementation of custom, branded voice experiences, hoteliers can further reduce privacy concerns while owning their customer data and experiences.

49% of guests say their hotel selection is influenced by high-tech features in guest rooms and that investing in technology reportedly increases in-room sales revenue by 20%. 

Angie Hospitality

Growing consumer demand for seamless technology and frictionless, personalized  guest experiences that are safer and more hygienic will continue to accelerate the adoption of voice AI solutions in the hospitality sector in the next few years.

Grocery stores lead retail in voice AI adoption

Findings from a new report by Mercatus project online grocery sales to account for 21.5% of total grocery sales by 2025. The estimated $250 billion in sales is a more than 60% increase over pre-pandemic estimates. 

As part of the shift to online grocery ordering and delivery, voice AI has emerged as a method to increase customer convenience and personalization. Voice AI expands the shopping environment by allowing consumers to order grocery items while in the kitchen, anywhere from a mobile phone, and even from the car. Without the need for a keyboard, grocery workers can file reports, enter data, and check back stock, all without leaving the shop floor. Voice assistants have the added advantage of providing “always-on” customer service, answering questions, and resolving delivering and ordering issues even when the store is closed.

Online grocery sales will account for 21.5% of total grocery sales by 2025. The estimated $250 billion in sales is a more than 60% increase over pre-pandemic estimates. 

Mercatus Report

In the last two years, Walmart and Carrefour both implemented voice ordering apps that rely on the Google assistant. In the future, brands hoping to avoid competing with their voice AI partners will turn to branded, custom voice assistant solutions that allow them to control their customer experiences while giving them ownership of all the customer data—informing product stocking and availability, while personalizing services by remembering users’ past orders and preferences.

The substantial movement to ecommerce in retail is accompanied by a steep rise in the use of mobile apps and mobile phones as payment devices. According to Statista, the number of individuals buying via mobile payments is only expected to rise, reaching 74.7 million in the United States by 2024. 

The number of individuals buying via mobile payments is only expected to rise, reaching 74.7 million in the United States by 2024. 

Statista

Adopting custom voice-enabled mobile app experiences for customers opens up opportunities for retailers and grocers to answer the growing demand for faster, more convenient, and remote ordering from anywhere at any time and delivers greater efficiencies and cost savings to chains and small businesses hit hard by the closure of brick and mortar locations.

Ecommerce from the comfort of home

Pre- and post-pandemic have become the timelines by which we measure the many trends in voice assistant adoption. Our changes in lifestyle, staying home more, increased family time, and the desire to avoid public transactions have all been factors in the acceleration of voice AI technology and voice commerce, in particular. 

In 2019, before the pandemic, PYMNTS’ “How We Will Pay Survey” reported that among U.S. households with voice-enabled devices, only 31% used them for purchases. In a more recent study, Invespcro found that 62% of voice-enabled speaker owners have bought items via voice commerce and that everyday household items are the most purchased through voice. 

Consumer surveys conducted by PYMNTS in June 2020 found that:

While many consumers believe that buying things online is faster and more convenient, they also find it safer than going to a physical store and risking COVID-19 exposure. And our surveys have found that before returning to brick-and-mortar locations, consumers want to see safety measures that include contactless payment options (favored by 59.7% of respondents) and payment methods that don’t require touching a card reader (58.6%). Given those numbers, it seems likely that consumers will have more interest in using voice-activated devices on commerce.”

While voice shopping and payments have historically been placed on smart speakers, Smart Home payment opportunities have expanded to include connected TV payments and connected smart appliance payments. Taking all of these devices into account, Juniper Research has projected that payments occurring via Smart Home devices will exceed $164 billion in 2025, up from $22 billion in 2020.

Smart displays on TVs and appliances—like smart refrigerators—will be a large factor in the growth of ecommerce as users will be able to combine the convenience of voice ordering with the assurance of a visual representation of their purchase, according to Juniper. The study also found that connected TV payments will be a significant portion of in-home ecommerce, accounting for 20% of total transaction values in 2025, including high levels of content purchases. 

To ensure a seamless experience, Smart Home device and appliance manufacturers and TV brands should be seeking custom voice assistant solutions that allow them to simultaneously increase the functionality of their products while providing ecommerce capabilities and opportunities for higher cost purchases.

Connected TV payments will be a significant portion of in-home ecommerce, accounting for 20% of total transaction values in 2025, including high levels of content purchases.

Juniper Research

Although the total impact of COVID-19 on commerce is yet to be revealed, the trends are clear and consumer habits are not likely to change again overnight. As we roll out of the pandemic with vaccinations and new social rules, consumers are likely to continue to be wary about shared surfaces and human-to-human contact with strangers. Ecommerce, already on the rise pre-pandemic, is here to stay and the convenience, efficiency, and hands-free safety of voice assistant adoption will continue to increase in parallel with ecommerce. 

For companies, retaining brand sovereignty, growing awareness and customer loyalty, and maintaining ownership of customer data and relationships will drive the need for more brand-owned custom voice assistant solutions and less dependence on large, third-party voice products such as Alexa and Google.

Developers interested in exploring Houndify’s independent voice AI platform can visit Houndify.com to register for a free account, or talk to us about how we can help you bring your voice strategy to life.

Karen Scates is a storyteller with a passion for helping others through content. Argentine tango, good books and great wine round out Karen’s interests.

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