- Case Study Hey Alexa What Is Consumer Behavior Amazon S Echo Is The Market Leader In Smart Speakers With A Nearly 72 P 1 (231.44 KiB) Viewed 19 times
You are encouraged to use bullets in your writing topics tocover...Summarize the case and what is the key issue in thecase. What consumer behavior strategies has the company used thusfar. What consumer perceptions, behaviors and attitudes do youanalyze. What other recommendations do you suggest the company cantake given the issue presented in the case. Cite outside literatureand research to defend your recommendations(use APA (Links to an external site.) style to citeyour references). What take-aways did you gather from thecase. What kinds of products or brands will most likely beeither negatively or positively affected by the increased use of AIassistants. Explain your answer. Choose two of your favoritebrands and devise an idea for an Alexa “skill” that consumers couldfind useful. How would these skills help sell more of the brands’products and/or increase customer loyalty.
Case Study Hey Alexa-What Is Consumer Behavior? Amazon's Echo is the market leader in smart speakers, with a nearly 72 percent market share. 48 Powered by the Alexa digital assistant software, customers use the Echo to listen to music, as an alarm clock, as a tool for getting answers to questions, and even as a source of jokes to brighten their day. Alexa and competitive products are also becoming a major factor in consumer decision. making that may radically change the relationship between brands and their customers. First released to the general public in 2015, the Echo is a small desktop speaker that users place in their bedroom, living room, or kitchen-sometimes all three. Users interact with it by calling out "Alexa" followed by a question or command. Through its basic functionality, the unit responds to commands to play music, report the weather, or to read your appointments for the day.49 A wider array of capabilities is provided through the installation of "skills"-third party apps that use Alexa to accomplish tasks. Amazon says there are more than 30,000 of these and that four out of five registered customers have used at least one.50 Need to find a breed of dog that behaves in apartments? Purina can help with their Ask Purina skill. Tide Stain Remover will help you remove that spot on your favorite shirt. And you can just shout out to Campbell's Kitchen skill and a helpful assistant will read you a recipe while you cook!51,52 While it operates primarily on the Amazon Echo, Alexa can run on a variety of devices, including in selected automobiles. Alexa fits into a broader category of technology known as Al (artificial intelligence) assistants. This category includes tools such as Apple's Siri, Microsoft Cortana, and Google Assistant, the latter of which is available on 400 million devices.53 In one way, Alexa and her humanoid friends simply provide another way o access the internet, by voice instead of keystrokes. However, the embedded Al capabilities combined with the human touch of voice command/voice response are significant differences that are changing the game for brand marketing, and not necessarily in positive ways. Al assistants offer consumers savings in time by automatically ordering routine items, and by evaluating the many options for nonroutine purchases, making logical choices based on algorithms or customer-defined criteria. For example, shopping for shoes can be fun, but choosing the perfect electric toothbrush can be painful. The Al assistant can do the heavy lifting for you, sorting through reviews and ratings and picking out the toothbrush that best fits your needs at a price you can afford. Through its understanding of your needs, its access to the full spectrum of product options, and its algorithms, your trusty Al assistant provides the trifecta of shopping pleasure: convenience, lower costs, and risk reduction. The rise of Al assistants as a dominant channel has important implications for brand management. We often buy the same brand repeatedly to lower the risk of a bad decision. If consumers start to trust Alexa with product choices, brands lose an important benefit. Loyalty can be very fleeting and more dependent upon being in sync with the algorithms of the Al assistant than with the positioning in the mind of the customer. Brand loyalty-building activities such as understanding/filling needs, assuring quality, and focusing on customer interests may be better performed by Al. Customer satisfaction becomes a more sophisticated proposition in a world dominated by Al assistants. Much of marketing research is focused on understanding the levels and dimensions of satisfaction; what if Al platforms could do a better job of assessing and projecting-satisfaction than the consumers themselves? Smart assistants could be able to anticipate, for example, how much room in a car an auto shopper would sacrifice for improved fuel efficiency. In the age of Al, promotion will likely be directed more to "push" activities (focused on the distribution channel) than "pull" activities (focused on the consumer). This is not so different from convincing retailers to put products on their shelves. Except now that "shelf" is digitally embedded in the algorithm of an Al assistant. In this environment, the power of the Al assistants increases significantly, most notably Amazon, which now has a long list of its own "private label" brands. 54 This could also radically change the amount of promotion devoted to advertising, particularly of the image-oriented variety. Alexa may not care if she purchases the same shampoo as all the cool Al assistants buy. The personal touch that the ability to interact with a human and humanlike voice provides is another important aspect of the use of Al assistants. The movie Her explored the connection that could exist with a computer-generated voice-only being 55 Although that was a fictional account, research has found that that some Al assistant users are passionate about their devices, with over 30 percent reporting that Alexa or Google Assistant is "like a friend to me. *56 Could that feeling affect your trust in the recommendations of the Al assistant? So, does Alexa know consumer behavior and, even more important, will she and her Al friends drive it? Al assistants are still in an early stage of adoption. Although hundreds of millions of consumers could use Al via Google, only one in five U.S. consumers has access to a smart speaker and just over 2 percent make a purchase daily. The majority of Alexa users have never used any of the 30,000 skills available. 57 As use of Al assistants grows, the "Age of Alexa" will likely involve hits and misses for brand marketers who must determine the optimal strategy for taking advantage of this new technology.