According to a 2021 report, nearly half of U.S. internet users own a smart speaker. Smart speakers, like the market-leading Amazon Echo and Google Nest, allow consumers to use natural language to do anything from placing an online order to searching for a recipe, all with just a simple, “Ok, Google” or “Hey, Alexa.” But beyond the functionalities provided directly by the manufacturer, these speakers also serve as a platform on which customers can connect with any third-party business that offers an app (known as a Skill on the Echo and an Action on the Nest) on that system. For example, customers can ask the Chipotle Skill, “Hey Alexa, reorder my most recent Chipotle order;” they can tell the Whirlpool Skill, “Hey Alexa, start the laundry cycle;” and they can ask CNN Action, “Hey Google, what’s my flash briefing?”
Alexa, Should My Company Invest in Voice Technology?
New technologies can create new opportunities to engage with customers — but is it always worth it for companies to build out a presence on these platforms? When it comes to launching a voice assistant on Amazon Echo or Google Nest, recent research suggests the investment won’t necessarily pay off. The authors analyzed stock price data for nearly 100 companies before and after they released voice assistant features, and they found that while some firms experienced a positive bump in valuation after launching their voice assistant, others experienced no increase or even a notable decrease in market value. Specifically, firms that launched informational features experienced an average 1% increase in valuation, firms that launched object-control features experienced no change in stock price, and firms that launched transactional features actually experienced an average 1.2% decrease in market value. As such, the authors argue that companies should think carefully before investing in a voice assistant to ensure that the value added will be worth the substantial development costs.
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