Amazon didn’t take long to make a splash in 2017, with the e-Commerce giant grabbing tons of attention at the CES conference, held in Las Vegas Jan. 5-8. How did a retailer gain such a stronghold on one of the biggest consumer technology trade shows in the world? By showing that its AI-powered Alexa platform can integrate with just about any consumer electronics device.
The voice-controlled Alexa service, which powers Amazon’s smart home devices Echo and Echo Dot, is designed to assist in many industries outside of retail. Various influential technology brands camping out at CES 2017 already have integrated the Alexa solution into their solutions, including:
Ford, into its cars running the Sync 3 voice platform;
LG, within its Smart InstaView Refrigerator;
Whirlpool, in its entire suite of connected home appliances;
Lenovo, within its Smart Assistance Speaker; and
Chinese smartphone giant Huawei, which will preinstall Alexa within its Mate9 mobile phone.
Alexa was a hit with consumers in 2016, allowing users to integrate the service with other connected home devices and ask it to change house temperature, play songs from streaming services or provide news and weather details. It seems clear Amazon has managed to simplify natural language processing to the point where businesses see clear value in integrating it with their tech products.
The market for intelligent digital assistants is expected to reach $3.6 billion by 2020, according to Allied Market Research. With that level of acceptance in mind, retailers should expect to integrate and collaborate with voice activation platforms in the next few years if they want to create effective conversational commerce-driven campaigns.
Given that Amazon already has a leg up on the rest of the retail industry in this space, passing by the Walmarts and Targets of the world to compete with Apple, Google and Microsoft, retailers will need to educate themselves quickly on how their present business models will align with natural language technologies to provide relevant experiences for consumers.
“The rapid increase in consumer adoption of voice assistants and other new purchasing channels introduces new challenges for retail supply chain, logistics and product information management processes,” said Nick Manzo, the Global Omnichannel Lead of 1WorldSync. “Voice-controlled devices such as Alexa are changing the nature of omnichannel commerce, as consumers don’t necessarily see products before they purchase them. Brands and retailers need to have systems in place to communicate key value offerings in the absence of images and written product descriptions, while also maintaining consistency and authenticity across all other channels. As retailers clamor to get some skin in the game, I expect we’ll see system providers adapt to make conversational commerce capabilities more accessible to those that have the infrastructure to support it.”
Alibaba Shows Off Cashier-Free Checkout Technology
Amazon made a big impression at CES, but the rest of the retail industry was much more subdued. Alibaba leveraged a much smaller footprint to showcase its YunOS operating system within home devices. Like Amazon, Alibaba is integrating its own technology into smart fridges, with the aim of automatically compiling grocery lists based on inventory, and providing users with personalized recipe recommendations and dietary advice.
Alibaba also demonstrated cashier-free store checkout technology, akin to that used in the Amazon Go convenience store but using facial recognition technology. With “Smile to Pay,” customers scan items at a kiosk, a camera recognizes their face and automatically debits the customer’s account.
IoT To Take Increased Role In Retail Operations
Even though the technology on display at CES is consumer-oriented, much of the software and hardware on display has the potential to affect the shopping experience. Connected devices are the most obvious technologies that come to mind, with retailers still needing to optimize the technology within their own supply chains and stores. While the ability of consumer devices to automatically order food and other household items as their supplies run low is great, retailers would benefit from this type of solution to automate replenishment of store shelves.
At the event, Intel released its Compute Card, a credit card-sized platform designed to boost the speed of IoT ecosystem deployment. The Compute Card could be used to enable smart kiosks within a retail space, to add connectivity to personal appliances or even connect security cameras.
Device manufacturers such as Dell, HP and Lenovo are already partnering to build a slot within their devices specifically for the Compute Card, and then select the features of it that fit their needs. Since the card itself remains separate from the device it powers, it could make it easier for brands to maintain and upgrade the smart capabilities of their IoT devices, without upgrading the device itself.
With voice-controlled digital assistants, artificial intelligence and IoT all becoming part of a more cost-effective reality, it’s apparent that smart technology will take another leap forward in 2017. As consumers continue to demand more out of their e-Commerce and brick-and-mortar shopping experiences, the pressure is now on retailers to ensure that these technologies can keep up — and answer when the consumer speaks to them.