Squared Online | The Power of Voice | Changing the way we buy FMCGs

Posted by Holly Maunders on 09 May 2018

In the final module of Squared Online, Squares are tasked with producing a whitepaper on how future digital trends will impacts an industry. The top papers are shared on this blog to celebrate their success and share their hard efforts with all of you!

Congratulations to Group 51 for this wonderful piece of work which gained top marks in their cohort! Team members include: Allison Riehl, Hashem Chaballout, Jo Mazenko, Aaron Lord, Jimena Lombardi and Ingrid Mahdi from various locations, including: New York, UAE, UK and Argentina.

Introduction

The Fast Moving Consumer Goods industry is in a state of transition, developing sophisticated technology and systems that monitor the functions and resources of households, transforming homes into mult-connected centres that can converse directly between business and consumer.
 
Thanks to the introduction of voice commerce, we no longer need to monitor our own product
consumption or even remember to plan advance purchase; e-commerce is intertwined into the daily
lives and habits of the consumer.
 

How will this impact the FMCG Industry?

For many years, supermarkets have had the power over suppliers, squeezing down supply costs and
dragging out payment terms. Are the tables about to turn? After all, when customers are using Alexa,
Google Home and Siri, they are effectively Amazon, Google or Apple’s ‘customers’; not the supermarkets
or retailers. Is it about time the supermarkets were played at their own game?
 
An article we read recently summed it this shift up perfectly “It will no longer be consumers ordering their
Tesco shopping through Alexa. It will be consumers ordering through Alexa and getting the delivery from
Tesco.” The diagram 2.1 below showcases this example further:
Image 1
 

Tesco has become the first UK supermarket to launch a channel on IFTTT, an automation service that will allow shoppers to reorder groceries automatically and monitor price changes on Tesco.com.

 

Other examples of recent digital innovations within the FMCG sector

Image 2-1

L'Oreal's UV Fingernail Sensor 3.1 
• Wearable sensor that detects UV rays
• NFC enabled, data retrieved via app on phone
• Uses personal data to customise experience
• Offers advice and suggests relevant products
• Allows closer relationship with consumer and builds trust
 
Johnnie Walker's Smart Packaging 3.2
Image 3-1

• NFC printed electronics and IOT smart product platform
• Sensor detects sealed & opened bottle states
• Can see where it is in the supply chain
• Battles counterfeit product issues
• Allows content to adapt to customer journey
 
Just Eat's Voice Ordering with Alexa 3.3
Image 4-1
 
• Voice ordering of takeaways via Alexa and Echo Show
• Tweak & re-order favourite and recent meals instantly
• Live track your order via a map
• Review your meal using voice
• Friction-less ordering & excellent user experience
 
Innovations like these show there is a huge gap in the FMCG market for more advanced products and ways of delivering these products to the consumer. Failing to get on board with these trends will risk the following: Losing masses of useful consumer data, the chance to be presented to consumers before anyone else and the opportunity to ensure content is as personalised and relevant as possible.
 
Our recommended strategy
 
These days, brands cannot sit back and just sell through retail. A few brands have successfully developed
consumer-direct sales models through the web and/or mobile. Why shouldn’t voice strategy be the same?
The challenge is that voice assistants are narrowing consumer choices and directly introducing these
consumers to brands.
 
Nowadays, Alexa and Google Assistant are actively suggesting third-party voice apps to their users. If
someone doesn’t have an Alexa skill or Assistant app, they cannot be recommended for product search,
purchase or other ways of consumer engagement. This is going to grow and it is important that brands
create content, SEO and commerce options fitted for voice interactions to ensure they can be part of it.
Brands will have a chance to win as long as they are present, rather than losing customers to competitors.
 
In order not to lose customers, it is recommended to encourage brand loyalty and has never been more
important. Voice-commerce and subscription models put more emphasis on recognition than exploration,
it is important to create, build and retain visibility.
 
Brands should implement a 5-step strategy to get ready for voice-commerce growth
 
1. Develop voice app presence to develop consumer connections and facilitate the consumer journey to purchase
2. Implement voice SEO strategy to drive discovery
3. Measure voice app data to increase consumer engagement and SEO
4. Enable product sales within the branded voice app
5. Promote branded voice app/s through earned, paid and social media
 
Voice assistant adoption is the fastest growing consumer technology and it will have a bigger impact
on computing, access to information, commerce and consumer choice. Brands should implement a
voice-commerce strategy, since voice-commerce will change consumer purchasing habits.
 
What are the benefits, risks and challenges of our strategy and what’s at stake if our
recommendations are ignored?
 
Major concerns/risks of Voice recognition devices:
• Getting the trust and confidence of potential users
• Upfront cost
• Lack of awareness
• Privacy concerns
• The proliferation of non-essential luxuries
• Intrusive and could potentially be used by hackers, second hand devices could potentially have spy
components installed
• Level of information storage security and unknown use of that information
 
Benefits of Voice recognition Devices:
• Enhanced energy management
• Improve security
• Enhanced leisure and entertainment services
• Extend personal independence through healthcare provision and assisted living, which is especially
useful for the elderly, and people with disabilities. They can simply ask to their chosen voice recognition
device to action their requests
 
Main Challenges:
Voice recognition devices are easy to hack, if measures are taken by their owners such as password
protection and firewalls then hackers would find it more difficult to hack into their systems and therefore
being victims of burglary or spionage. The main challenge is to reassure customers their data and homes
would be protected, as far as they follow the recommendations given by each device, not misused, the
device will not be used as a surveillance, or shared with third parties without their consent. “The
information harvested by voice assistants, such as spending habits or preferences will constitute personal
data”.5.1 If sensitive personal data is passed on to third parties without people’s consent, sever sanctions
will be imposed from improper used under the Data Protection Act. “The General Data Protection Regulation comes into force across Europe on 25 May 2018, bringing with it eye-watering fines and sanctions for misuse of personal data.”5.1
 
What’s at stake if our recommendations are ignored?
Voice recognition is the way forward in technology when making purchases if FMCG companies don’t
follow our recommendations they would be missing out huge potential of customers and therefore
millions of sales. Advertising is going to be the next boom for many brands as instead of people skipping
Image 5
adverts when they see it on their mobiles, Alexa for example will be suggesting to their owners what items
to purchase depending on who has paid the highest bid to voice their advert in the first or second slot or
not being heard at all. It is also believed that Amazon Echo and Google Home will have a deal with third will push advert on to their social media accordingly to specific items mentioned in those conversations.parties to pass on to them conversations, with people’s 
consent, then those third party companies
 
What data do we have to support our strategy?
Sales of smart speakers are massively increasing globally. Edison Research 6.1data show that smart
speakers reach is 39 million U.S. adults and over 50 million including children. But, this channel is about
more than smart speakers. Voice assistants are also available through mobile devices, laptop computers,
cars and even appliances. The more compelling statistic comes from a Cap Gemini survey 6.2 of 5,041
consumers in the US, UK, France and Germany – over half of consumers have used a voice assistant with
81% accessing them through mobile devices.
Image 6
 
According to ‘Walker Sands 2017 Future of Retail Study’ 6.3 that surveyed more than 1600 US consumers, one in 5 customers (19%) have already made a voice purchase through Amazon Echo or another digital home assistant, and another third (33%) plan to do so in the next year. For online retailers who can get a head start, there is an incredible opportunity to grab.
 
The first voice recognition hands free home device to go out in the market was Amazon Echo in 2014, since then, other well known high tech companies have launched their own voice recognition devices and are selling millions of them too.
 
What are the regulatory implications that adopting voice assistance could entail for brands?
 
Because the FMCG sector is very much still an unknown landscape, there are few regulations easily
accessible and consistent globally. And because voice-commerce is fairly broad and uncharted at the
moment, it will evolve as it changes consumer purchasing behaviour. That being said, it is important that
this area be constantly monitored as it will continually impact any brands voice-commerce strategy.
 
There is currently one regulation specific to Amazon and Google that bans any advertising communication
on Alexa and Google Assistant.7.3 Though, this does not hold brands back from creating a similar Alexa
skill or Google Assistant voice app, which is being done to further endorse brands and engage directly by
voice. Additionally, there are laws and regulations (COPPA) surrounding parental permission required prior
to any sound captured from children. 7.2
 
Finally, while rules are not black and white and constantly evolving, it is important that all companies
develop a privacy notice “explaining how the device collects information, how the information is used, how
it is protected, who it is shared with, how long it is retained, and how it is ultimately destroyed”.7.1
 
This notice puts everything out on the table and leaves little room for questions down the line. It also
should be updated if anything changes as well as shared out to the organization as “guidance” in hopes of
anticipating any regulations/requirements that may develop
 
 Appendix
 
 

Find out more about Squared Online: you can give us a ring on +44 (0) 20 7173 5938, or download the brochure to read about the course and the Squared experience.

Topics: Digital trends, Digital marketing, Whitepaper, Business case studies, Squared Network