The Alpha Particle Perspective: “Marketing in the Age of Alexa”

In a recent issue for the Harvard Business Review, Niraj Dawar covered the challenges and opportunities that exist as we move into an era of voice-driven technology. Here at Alpha Particle, this is a concept we’ve been thinking and speaking about recently. As such, we wanted to take an opportunity to respond to this article. Feel free to read the full article on HBR first or skip straight to our takeaways below.

Voice is a growing market

Amazon has sold ~25 million smart speaker units and is expected to double that number by 2020. Google Assistant is available on ~400 million devices (Google Home smart speakers as well as select Android phones). These numbers show that even though voice is a relatively new interface, consumers are adopting it at a rapid rate.  We have seen users who struggle to use traditional text or cursor-based navigational interfaces embrace voice, and this leads us to believe this adoption will only continue to grow.

It’s too early to determine which platform (Alexa, Google Assistant, Siri, Cortana) will become dominant, however that will become more clear as the platforms continue to develop. Thankfully, development for most of the platforms can occur out of one codebase with only minimal work required to port between the interfaces. This is why we’re recommending companies make their skills available on all possible platforms until a market leader emerges.

Voice will be a powerful interface for customer acquisition

Brand marketing will shift from marketing directly to the consumer towards marketing to these AI-based platforms (Alexa) and indicating your “ideal customer” through various signals including branding, price, past buyers, and more.  The platform will then help you get in front of these ideal customers, which is mutually beneficial for both the customer and the vendor.  While we are always a bit skeptical of this sort of algorithmic matching (Facebook’s fake news epidemic and Google’s algorithmic woes come to mind), we have seen Amazon and other online retailers already moving in this direction with “More items to consider” and “Shoppers like you also viewed”.

Taking the current trend of web analytics even further, brands will be able to perform “market research” with existing data and intelligence on actual customers rather than relying on focus groups or other conventional methods.  This could make bringing new products to market more efficient and likely to succeed, given that brands will be able to see holes in the market throughs search data and other measures of consumer intent.

Customer satisfaction will be more crucial to retention

Today, customers don’t often reassess whether a brand or product is still right for them. If it works well enough, then they stick with what they are already using. In the future of AI-powered platforms, the AI can constantly reassess whether another product or brand would be a better fit for the customer and prompt them to switch or even gain their permission to make these sort of substitutions automatically. This radical shift in the relationship between the brand and the consumer means that brands will have to be even more closely aligned with their ideal customer in order to keep their business in the era of AI-driven purchasing decisions.

“Push marketing (getting platforms to carry and promote a product) will become more important, while pull marketing (persuading consumers to seek products) becomes less so.” – Harvard Business Review, 2018

Brands will need to get their products on these AI-platforms to get them in front of customers rather than targeting customers directly through more traditional advertising. While this will allow companies to focus their marketing efforts on these platforms, the potential for getting lost in the black box of the algorithms is a potential concern. In sharp contrast to the past, rather than making selling more products and maximizing throughput, the goal for brands now will be maximizing the depth of their relationship with the consumer. This will ensure their products continue to be suggested to these consumers and new products put in front of these same consumers in the future.

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