With Black Friday upon us, it’s a good time to think about how the gadgets, gifts and the ways we buy them have changed. Those changes are signs of shifts in consumer attitudes and beliefs.
Something New We’re Buying
Voice technology and the connected home are clearly one of the next consumer technology frontiers. Amazon introduced the first voice home assistant, the Echo, in 2015 and Google brought out its entry,Google Home, in 2016. Now it’s a category of product called “smart speakers.” Announced products are coming from Apple, Sonos and Harman Kardon, while Facebook and Samsung are rumored to be waiting in the wings with products as well.
A company called AnswerLab has been studying the smart speaker market and what they’ve learned is surprising. AnswerLab points out that one-third of smart speaker users they studied received their devices as a gift and they are much less satisfied than consumers who bought smart speakers for themselves. If you’re thinking of buying one for a friend on Black Friday, it may not be the best idea. Gift recipients are literally less invested and because it’s a new technology, it takes commitment to learn, adapt to and get the best use out of. People who receive smart speakers as gifts score lower on usage, knowledge and satisfaction. One senior tech executive told me the speakers “take a huge commitment, so you gotta be excited about it and if you give it to the wrong person, it’s useless.”
On the other hand, 63% of users plan to buy another one. Half of all consumers report increased use since their first month and almost 70% use their speaker every day. Amy Buckner Chowdhry, CEO & Co-Founder of AnswerLab, said, “we have even seen a huge opportunity for brands to leverage smart speakers this holiday season. The majority of the smart speaker owners we studied were very interested in using their devices to learn about holiday products and gift ideas.”
The market for smart speakers is growing rapidly. According to a recent Juniper Research study, by 2022 55% of American households, about 70 million homes, will have smart speakers and the average home will have 2.5 of them. If you haven’t started having regular conversations with an inanimate speaker, there’s a good chance you’ll be starting soon.
In AnswerLab’s research, half of all users reported buying their speaker in the last 90 days. More than 80% are satisfied and 82% think it’s easy to use. To be fair, it appears that expectations are low. The biggest reason for buying a smart speaker is experimentation. Speaker makers are going to be challenged to keep up with the demands made on them for more sophisticated uses that are easily used by consumers. Leadership in the market is up for grabs by the maker who can create the most innovative product.
Like a smartphone, smart speakers come with basic functionality and to make them do more you have to add applications. That can be challenging because the apps are all new and they don’t all work seamlessly with the speakers. In AnswerLab’s study, 63% of users who added applications encountered problems or frustrations. They either had trouble remembering the verbal commands or they found the device couldn’t understand them or the setup was too hard. For a new technology, that’s too many challenges. Chowdhry of AnswerLab told me, “In our research, we’ve learned that the majority of smart speaker owners are very interested in using their devices to purchase products from their favorite retailers. However, we also learned that when users have a bad experience with an app, they are very unlikely to return to it again. That means brands must get their voice user experiences right the first time when building for smart speakers.”
Why You Should Care
Voice is highly useful for certain tasks and the brands that get it right will leave others behind. Making it easy and simple for consumers will mean the difference between success and failure in voice. We’re in early days for smart speakers but to continue on their high adoption path, the apps need to be simple and intuitive. As with smartphones, consumers will tire of adding apps so providers who start early with an effective voice app will have a big advantage.
What no one’s talking about right now is where smart speakers need to go: the merger of the speaker with a screen. If you could say to the smart speaker, “show me on my phone,” or “put that on my tablet screen,” it would vastly improve the range of solutions that a smart speaker can accomplish well. It will accelerate obsolescence of desktops and reduce the use of keyboards. It would enable voice to solve for more complex questions like comparison shopping, scanning news to find what interests you, or reviewing charts to help make important decisions. Smart speakers are just the beginning of voice technology and there is a long way for it to develop.
A New Way To Buy…And Own
As innovative as smart speakers are, the way you buy them is traditional. They’re bought like any consumer product, in a store or online. Other products, even more traditional ones, are innovating in the way things are bought and owned.
Watches are a very traditional gift and a great item for Black Friday gifts. One of the most interesting things about watches right now is how the way we interact with them could change. A three-year-old company called Eleven James has started a subscription business for high end watches costing as much as $30 thousand or more to buy. For hundreds of dollars per month, you can wear a super-luxury watch and trade it in every so often for another watch of equal value that you can wear for an equally short time. There are a number of watch subscription companies and others we’ve seen are growing super-fast as well and are very impressive.
What’s interesting about Eleven James is an announcement they made last week about a new way they’re sourcing the watches they rent. You would think they’d buy them from manufacturers and rent them out to consumers and you’d be right, that’s what they’ve been doing for the last several years. But now they’re allowing consumers to consign their watches. Consumers who have valuable watches that they’re not wearing regularly can send the watches to Eleven James and the Company will appraise the watch and pay a consumer 10% of the market value per year just to rent it out. What’s great for Eleven James is that they don’t have to come up with the money to buy the watches they rent. What’s great for consumers who own expensive watches they’re not wearing is that they can turn them into money without having to sell them. It remains to be seen how many owners of true luxury watches will want to consign them or will be motivated by the rental income. One thing Eleven James’ strategy has going for it is that there are a lot of watches in people’s closets and drawers that aren’t being worn. It only takes a small percentage of those to make a huge difference in Eleven James’ business. If it works, it’s applicable to many other types of products that have high value and don’t get used often, like high-end jewelry. Olivier Reza, CEO of Eleven James, believes what they’re offering shouldn’t be thought of as rental, it’s something else. “We take great care and pride in developing elevated experiences in a seamless consumer process… I see our work as comparable to a chef’s menu… we help consumers navigate and enjoy a complex and overwhelming category.”
New products like smart speakers are being created. Basic products like watches can now be sold and owned in a different way. These changes mean something. Not only are the products we use changing, but the way we buy them and own them is changing too. Even though you own a watch, it doesn’t mean you can’t rent it out. And if it works for a watch, why not jewelry, or a car, or the use of your backyard when someone else needs it, there are more things that can work like Airbnb. Technology and changing attitudes towards transience, permanence, ownership and the way we relate to the things we own and how we identify with them are all in flux. We have reached a time where people are asking themselves questions like, why do I need to have so many watches that I don’t wear? Maybe I can rent a watch and those that I own can be rented out to other people. Reza of Eleven James, believes that renting can be a bridge between a generation of owners and the next generation that doesn’t need to own. We are all adapting how we think about our stuff as part of ourselves and how our identity is separate from what we own. As you go about your Black Friday shopping thinking about who would like what gift, it’s useful to make note of how different people’s attitudes are towards what they’re buying, what they’re keeping, what’s important to them and what endures.