RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Voice Shopping Yet to Take Hold; Amazon Simplifying Ad Business; Prime Day’s Rising Tide Raises All Ships.
Voice Shopping Yet to Take Hold
Very few owners of Alexa-powered devices are using them for shopping. Of about 50 million Alexa users, only about 100,000 reportedly bought something via voice interface more than once. It’s not exactly surprising, but it may still harm the narrative of conversational commerce that Amazon and others are trying to advance.
The Amazon Echo and its brethren are mostly used for the expected everyday purposes of listening to music, asking what the weather will be like tomorrow, and setting timers. All of these things are obviously things that phones do as well, but there’s something to be said for having a stationary hub for the more domestic tasks.
However, part of the expectation of seeding the home with these devices has been that users would also make purchases using them.
Although groceries and impulse purchases may not be something people do via voice, an Echo is a great seller of subscriptions, like Spotify and Audible, not to mention future possibilities from queries such as, “Alexa, call me a plumber”. The data also shows that, while a million people have tried buying through Alexa, only 100,000 continued through to purchase. However, as the technology becomes more advanced in its capabilities to answer customer questions, expect abandonment rate to drop.
Amazon Simplifying Ad Business
Amazon is quietly streamlining its ad business so that advertisers will be able to buy campaigns from the same place, whether they sell their products directly to the site or directly to its shoppers as third-party sellers.
The retailer has tried to remove the differences between how first- and third-party sellers manage campaigns for some time, but it’s now going a step further. Amazon is working on a consolidated platform that will fold all campaign reporting and advertising products from the Amazon Media Group, Amazon Marketing Services, and Amazon Advertising Platform divisions, into one place.
Amazon’s ad business is hard for newcomers to navigate with different divisions for businesses that sell to Amazon and for those that sell their own products on the site.
During the company’s earnings last month, Amazon CFO Brian Olsavsky referred to barriers to growing media spending when he hinted at changes to make the ad buying process more “usable” and “automated”. Advertising helped deliver Amazon’s second consecutive high-profit quarter in the first quarter after years of unprofitable or low-profit quarters – despite many big brands still having reservations about how much of its inventory they should buy.
Prime Day’s Rising Tide Raises All Ships
Prime Day offers a significant boost to non-Amazon shopping apps, according to data from Liftoff.
Scores of other retailers, from eBay to Macy’s to Target, followed Amazon’s lead and rolled out their own promotions in an effort to keep pace with the marketplace giant. Their efforts seem to have paid off: in a major change from last year, Liftoff found that all non-Amazon retailers saw a massive 156% increase in mobile app installs and purchases during Prime Day, a trend that began on Sunday, spiked during the event, and then dwindled considerably in the following days.
Conversely, Liftoff’s 2017 analysis of Prime Week showed shopping activity increasing in advance of Prime Day, dropping as it took place, and then rising again in the following days. This year’s buyer behaviour suggests that next year e-commerce marketers may want to put even more of a focus on the event itself.
Across the entire week this year, the percentage of users who installed a non-Amazon shopping app and made a purchase increased by 46%, when compared to the previous five-week period.
While Prime Day boosted other retail apps in advance of and during the event, the days that followed took a major hit in install-to-purchase activity, with sales plummeting to a low of -24% on Friday, compared to the prior five-week period.