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The rise of Amazon Alexa and Voice - The New Search Engine


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This year welcomed our first client in the connected home space and we have spent the last few months trying to really understand The Voice Activated Internet , specifically Amazon Alexa.

Analysts predict there will be 60 million Alexa devices sold in 2020, bringing the total install base to around 128 million.

By 2020 Amazon could have 500 million active customers globally and $5 billion in revenue. Thats less than 3 years away..


Watch Gary Vee's video on The Future of Voice 

And this is where it gets really interesting. An RBC survey of Amazon customers found 17 percent currently use it for ordering items from the e-commerce service and this will continue tilting toward more Amazon purchases on Alexa-enabled devices, estimating a total retail revenue per active Amazon customer will be around $350 by the end of this year.

If this grows 5 percent annually it means the revenue per customer will be $400 by 2020. Alexa devices could increase spending between 5 percent and 15 percent or $40 per customer. On the basis of a 128 million Alexa devices installed, which is what RBC believes by 2020, this implies incremental revenue of $5 billion via shopping.

The same CNBC article also predicts that if Amazon reaches over 100 million installed Alexa devices, then it could tap into “platform revenue”.

Amazon has “skills” for Alexa which are essentially apps like Uber or even Spotify that can be controlled via voice. As the number of skills rises, Amazon will create a marketplace that will allow them to charge companies to appear more prominently in its app store. There will likely be paid skills on Alexa, for which Amazon could collect revenue share payments.

And this shit is moving fast! In an RBC survey of 1,748 Amazon customers carried out in September 2016, 33 percent of respondents said they had heard of Alexa, Echo and related products. A similar survey in March 2017, showed that this had increased to 77 percent. Meanwhile, ownership has jumped from 13 percent to 87 percent in the same period.

We have also been doing the math and analysing the noise in the market, specifically the U.K

Amazon is going to nail it with Alexa —which of course has all the ingredients to further strengthen the bond with its customers!

We are currently conducting some further research (specifically in London) so if voice is your thing — do get in touch!