Five years have passed since Alexa was born on November 6th 2014, alongside the first Amazon Echo. Today, over 26% of US households have a smart speaker, with Alexa as the dominant voice with over 60% market share. Alexa is now trying to catalyze the next phase of growth. Avoid hitting an inflection point. The number of open postings for Alexa roles reached an all-time high of 1,679 this past October.
R&D is the biggest area of investment: 557 postings exist to improve Alexa’s ability to interpret our voice commands. This is followed by strong investments to improve Alexa’s ability to help consumers shop, communicate, and smarten our homes and cars.
Our team also identified four strategic initiatives that could unlock new growth in Alexa. Some with dystopian risks. Let’s take a look.
“Alexa, Get Milk” (19 postings)
8 of the 10 largest retail companies by revenue sell groceries and everyday consumables. Amazon included. It therefore makes sense the Alexa Shopping Team is trying to ramp up adoption of grocery shopping.
It’s all part of Amazon’s push for hyper convenience. Alexa has an opportunity to take it to the next level. One software developer job description reads: “Our customers shouldn’t need to think about what groceries they need; Amazon should just know.”
The goal is for Alexa to automatically add bananas to our Prime Now cart, reorder coffee from Amazon.com and check on Whole Foods deals. Forget about groceries. Allow consumers to spend their time, effort and memory on something else. Such as watching Prime Video.
“Our customers shouldn’t need to think… Amazon should just know.“
This convenience has yet to be replicated by Google, the second most popular virtual assistant platform. Part of the challenge lies in the fact Google does not own a grocery store, and relies on retail partners for product assortment and fulfillment. This leads to inconsistent experiences. There are also signs large retail partners are winding down their partnership with Google Shopping, including Walmart and Target. Perhaps they’re not so excited of letting Google become their storefront. They already rely on Google Search Ads for traffic. Imagine if they also relied on Google’s online storefront. They’d effectively become low-margin distributors, not retailers.
The one challenge Alexa Grocery Shopping does face is the decline in household spending of food we take home. Americans are spending less on groceries. Instead, we are spending a larger portion of food money away from home. Think restaurants. So Alexa Food Delivery may have greater growth potential. Yet it faces a similar challenge as Google does with Grocery Shopping; Amazon does not own any restaurants and relies on partners for cooking and food delivery, leading to inconsistent experiences.
“Alexa, Let’s Get Ready for Bed” (27 postings)
Now that Alexa “just knows” what groceries we need, she’ll be able to “perform actions on [our] behalf.” That’s the goal of Alexa’s Routines team.
Alexa Routines has so far been focused on helping us perform multiple tasks using one voice-command. But as it learns more about our shopping habits, it wouldn’t be surprising it creates routines for us, and shops for us.
The question becomes whether consumers will trust a virtual assistant, who also owns one of the largest retail stores in the world, with control over their wallets. Amazon will need to tread carefully on how Alexa spends on our behalf.
“Alexa, What did Hannah do in School Today?” (2 postings)
That is literally how one job description describes the goals of Alexa Education. With more and more schools and students using technology to manage learning, Alexa aims to tap into all that data and bridge the communication gap between kids and parents.
Many new parents have leveraged Alexa to help put their newborn babies to sleep. The author of this analysis included. It’s much more convenient to tell Alexa to “Play bedtime music” than it is to search for songs and playlists on the phone while the baby cries. Parenting is such a popular use case for smart speakers that Mattel developed one dedicated to parents and babies.
But what happens when the baby grows up? There’s the option of getting an Echo speaker for their kids, but many parents worry about their children’s privacy and of unconsciously letting a robot influence their lives.
That’s where Alexa Education comes in. It’s trying to offer helicopter parents the convenience of constantly watching over their kids. Are they eating gluten-free lunches? How did they do at piano lesson? Does coach think their kid is a good leader on the team?
As Kickboard, an Alexa Education partner describes:”Our voice-activated Alexa skill provides instant information for families about how their child is doing throughout the day, including not only in the classroom, but during lunch or recess.”
What’s the challenge? Kids are not stupid. We’ve all lied to our parents. If teenagers discover their lives are being by their parents via Alexa, it won’t be long before they manipulate it to their benefit.
The success of Alexa’s parenting initiatives will depend on whether users trust it. Will kids trust Alexa if they knew if helped parents spy on them? Will parents trust Alexa if they found out kids lied to the machine? Will kids even trust their parents, and vice-versa?
Should “What did Hannah do in school today?” really be a question for Alexa? Or for Hannah directly? Alexa runs the risk of causing harm in real human relationships in the name of convenience. That represents a large PR risk. This brings us to the next initiative.
“Trust Me” – Alexa (10 postings)
With so much of Alexa’s success riding on the trust users place in it, it’s not a surprise Alexa is beginning to staff an entire team to “earn and maintain customer trust.”
The team faces some headwinds. The majority of Americans don’t trust technology companies, and increasingly feel technology giants have a negative impact on their lives. 72% of Americans don’t trust Amazon specifically. But luckily for Amazon, mistrust in tech has so far not translated into less demand for virtual assistant devices. Trust may therefore not be a priority until it impacts Alexa financially.
72% of Americans don’t trust Amazon
Of the 1,679 Alexa open job postings, only 10 (0.006%) focus on trust, privacy and risk management. 557 postings (33%) focus on R&D, improving Alexa’s voice and visual capabilities. This means there may be one worker focused on Trust for every 57 workers plowing through what we say, and what we see.
Yet much of Alexa’s growth potential from this point on will depend on the effectiveness of Alexa’s Trust team. Working in the shadow, protecting both user privacy and Amazon from legal liabilities and trust erosion.
As one job description reads: “Done right, trust will be one of the strongest [differentiators] we can create.”