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What is voice commerce?
New technologies are transforming the way consumers shop and the way online retailers do business so quickly that it can be hard to keep up with changing trends.
Voice commerce is the latest frontier in ecommerce payment methods, offering voice assistant users a quick, convenient and simple way to make purchases simply by asking their smart devices.
The novelty of this technology means many businesses, and consumers, have questions around how it works and how it can benefit their shopping experience. Nevertheless, the use of voice payments is growing all the time, and retailers who embrace it quickly are sure to reap the rewards it has to offer.
In this article, we’ll explain exactly how voice commerce works, why online merchants should use it, and how the future of voice recognition payments is shaping up according to the latest data.
What is voice commerce?
Voice-based commerce, also known as v-commerce, is a type of contextual commerce (the process of seamlessly integrating purchase opportunities into consumers’ everyday activities) that allows consumers to use voice assistants, like Alexa, Siri, and Cortana, to buy goods and services.
How do voice recognition payments work?
When a consumer makes a purchase query, their voice assistant uses natural language processing (NLP) and artificial intelligence (AI) to interpret their command and take them to the most relevant product page. For security reasons, you first need to load and authenticate your stored card before doing the first voice payment.
For example, if someone says, “I want to buy some shoes”, their voice assistant will review their preferences and purchase history, discover that they have previously browsed or bought trainers from a particular website, and take them to that site. The user can then review the list of options available and command their voice assistant to “buy it now”.
The benefits of voice commerce
Voice payments have a number of benefits over conventional online shopping routes, including:
- Fast - as the customer doesn't have to open a browser, enter the website and find the product manually, this vastly reduces the time it takes someone to go from intent to checkout and the chance that they’ll abandon the purchase. 44% of US consumers in a survey on reasons to shop with a voice assistant cited its speed
- Convenient - busy consumers are able to make purchases without using their hands, which is especially good for those with disabilities who might not be able to use a keyboard or mouse. The same survey found that 49% valued the technology’s ease of use, while 31% listed the ability to multitask as a top reason to use voice-based commerce
- Potentially more secure - because a customer’s ability to command their voice assistant depends on it recognising their unique voice print, voice commerce has the potential to be more secure than other types of commerce
- Provides businesses with data - using voice commands gives businesses wealth of actionable data on what their customers are saying about their products, allowing them to assess trends and product popularity
- Personalized shopping experience - by using Natural Language Processing NLP and AI, voice commerce learns about a user’s shopping and browsing habits, and tailors results to past behavior, delivering more personalized results, which increases the chances of a successful purchase
Challenges of voice payments
However, the relative newness of voice commerce means businesses who adopt the technology could face some challenges, including:
- The technology needs optimization - the novelty of voice commerce means it isn’t yet being widely used by consumers. As it is still in its early stages of development, it hasn’t had the chance to learn from a wide variety of languages fully, and its knowledge base is limited. There’s still some way to go before it’s fully optimized
- Unfamiliar to consumers - Some consumers still prefer the traditional mode of purchasing instead of using voice commands to make purchases, meaning they can find their interactions with the technology inhuman and its payment security untrustworthy, which can be off-putting. Additionally, people might feel uncomfortable about being overheard by others when in a public place or be simply be not aware that their voice assistant has the capability to help them shop
- Data security and privacy - with the advent of GDPR, consumers are far more vigilant about personal data and there’s less clarity around the reliability and safety of using voice commands than other types of commerce. Because of this, even consumers who do use voice commerce tend to make lower value purchases. Also, while smartphones require a unique voice, smart speakers aren’t generally as secure, meaning a child could make a purchase using a voice command without a parent’s knowledge
- Voice commerce isn’t accepted by all organizations - many banks and credit card companies, especially more traditional ones, still have too many questions around voice commerce, which is limiting its growth
Is voice commerce the future?
Voice commerce clearly has a great deal of potential, but also a few challenges that need to be overcome before its widespread adoption among consumers and financial institutions. That said, Royal Bank of Canada, Barclays and Santander were among the earliest banks to start offering voice recognition payments through Siri, and many others have already, or are set to, follow.
The statistics around use of voice commerce are very encouraging. According to Statista, by 2023, the value of voice-assistant ecommerce transactions is expected to hit nearly $20bn in the US and $19.4bn worldwide - an astonishing increase on the $4.6bn achieved just two years earlier in 2021. If growth continues on this trajectory, voice commerce will surely be a force to be reckoned with in online shopping.
Other Statista research found that by mid-2022, 27% of US consumers were already making online payments using voice assistants. And data on the share of consumers using voice-activated searches in certain countries found that, of US consumers, 54% used it for retail, 52% for food delivery and restaurants, 49% for consumer packaged goods, and 45% for fashion.
Accept more payment methods with Checkout.com
If you want to remain competitive in the ever-changing ecommerce space, you need to ensure you’re staying up to date with the latest consumer shopping preferences.
With Checkout.com, you can access the world’s most popular payment methods, including global card schemes and the local payment methods preferred by consumers in the regions in which you operate. We can also support you with contextual commerce, ensuring you can meet all your customers’ shopping preferences, boosting loyalty and sales.
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