By 2024, voice shopping has firmly established itself as a key retail channel, fulfilling the bold projections made just a few years ago. According to OC&C Strategy Consultants, the voice shopping market surged from $2 billion in 2018 to $40 billion by 2022, cementing its role as a retail disruptor.
The explosive adoption of smart speakers drove this revolution, which grew from 13% household penetration in 2018 to 55% by 2022. At the forefront, Amazon’s Echo devices dominated the market, far outpacing competitors and solidifying Amazon's leadership in the voice commerce space.
Voice shopping’s rapid rise highlights a dramatic shift in consumer behavior. Convenience, speed, and seamless integration with daily life are redefining the retail landscape.
Key Findings of the Study
Dominance of Tech Giants: Amazon’s Echo devices are in 10% of U.S. homes, compared to Google Home’s 4% and Microsoft Cortana’s 2%. Meanwhile, Apple lags due to Siri's limited AI capabilities and a late entry into the smart speaker market.
Trust Issues: Only 39% of consumers trust the personalized product recommendations made by smart speakers.
Demographic Insights: Smart speaker users are younger, more affluent, and often have children.
Low-Cost Purchases Dominate: Voice purchases are typically standalone, lower-value items, with groceries (20%), entertainment (19%), and electronics (17%) being the most popular categories. Clothing trails at 8%.
Amazon's Growing Grip on Voice Commerce
Amazon’s "Choice" designation is becoming a powerful sales driver, boosting product performance by more than threefold. Conversely, losing the "Choice" status can cause sales to plummet by up to 30%.
85% of consumers rely on Amazon's suggested products when shopping through voice.
Almost half (45%) of grocery voice orders replace traditional store or online purchases, with Amazon Fresh dominating this space.
Retailers Must Adapt to Thrive in Voice Commerce
To stay competitive, retailers must develop "skills" – voice-integrated apps – to create seamless shopping experiences. Despite the potential of voice shopping, only 39 applications exist in this category.
Critical recommendations for retailers:
Inspire customers by integrating creative solutions, such as recipe suggestions, to encourage higher spending.
Build trust through personalized recommendations, as trust correlates directly with consumer ratings.
Focus on offering value, as only 44% of users believe smart speakers provide the best deals.
What Consumer Goods Companies Can Do
Consumer goods brands must secure and maintain Amazon’s coveted "Choice" status to succeed in voice commerce. This is no easy feat, as the status frequently changes due to stock and delivery fluctuations.
Additional strategies include:
Optimizing product discoverability, as 69% of consumers know the exact product they intend to buy.
Using distinctive search terms (e.g., “sensitive toothpaste”) to improve product visibility.
Expert Insights
John Franklin, Associate Partner at OC&C, explained, “Voice commerce is reshaping the retail industry. Just as e-commerce and mobile commerce disrupted traditional retail, shopping through smart speakers is poised to have a similar impact. The rapid adoption of these devices presents significant opportunities and challenges for retailers and consumer goods companies alike.”
Coye Nokes, Partner at OC&C, emphasized the need for retailers to adapt strategically, stating: “Retailers must ask themselves critical questions, such as: What are my objectives? How can I tailor my voice strategy to achieve them? Which AI platforms best support my goals? Building trust and optimizing the economics of this new channel will determine the winners in this next phase of retail disruption.”
Methodology
The findings are based on proprietary consumer research conducted in December 2017, surveying 1,500 smart speaker owners. The study also analyzed sales data for 2,000 products on Amazon over a month to assess the impact of the "Choice" designation on performance.
About OC&C Strategy Consultants
Founded in 1987, OC&C is a leading global strategy consulting firm specializing in tackling complex challenges for management teams. Its clients include top-tier companies in the retail, consumer goods, media, business services, and private equity sectors.
