As smart speaker sales start to take over, retailers must get on board or they risk missing out on a golden opportunity, says Gekko MD Dan Todaro
As of December 2016, about 10 per cent of the UK population has a Spotify account, in addition around 2.6 million UK citizens have an Apple or Google Music account. The UK streams over a billion audio tracks each week, growing 68 per cent year on year. Moreover, 45 billion tracks were streamed in 2016 – that’s around 1,500 per household per year – and streaming revenues grew 65 per cent for the top providers last year. Overall, total music revenues are up 4.6 per cent despite falling physical music sales. The evidence is clear that audio streaming is a huge category that is experiencing a meteoric rise; which is good news for retailers stocking top of the range premium audio products.
Likewise, this year we’ve seen further development in the smart speaker market, which is taking the technology found in smartphones to the next level. Combined with a high-quality speaker, these smart speakers, including Amazon’s Alexa and Google Home, are fast becoming a staple in the audio market. As personal assistant technology continues to develop, I expect the popularity of smart speakers to increase. Although a fairly specialist product at the moment, as different brands continue to integrate their services with AI, consumers will begin to take notice of the real life benefits of owning a smart speaker. Take recent product announcements from IFA in Berlin such as Yamaha’s range of Alexa-enabled sound bars, bringing AI technology to a new audience who might not necessarily invest in a smart speaker, but desire a premium audio product.
All these new audio announcements at IFA have one thing in common: they prioritise high quality audio. When displaying premium audio products in store, retailers may not be able to sell the content, but they can create the user experience of quality audio.
To maximise sales of these products, retailers should set up an area in store dedicated to premium speakers and headphones. Investing in a Spotify or Google Play Music subscription is also key to allow the display speakers to stream high-quality audio at the touch of a button. Likewise with smart speakers, they need to be connected to the store Wi-Fi to access the personal assistant and connect to a music streaming service. Central to demonstrating premium audio is allowing shoppers to imagine the product in their own home – creating an immersive experience which allows the shopper to fully utilise the speaker as they would at home is by far the best way to create an emotional and real life connection.
Retailers who have yet to invest in smart audio and AI are already behind the curve. A growing industry, globally expected to be worth $5.5 billion by 2020, smart audio represents a golden opportunity for retailers to appeal to new audiences, and also up-sell existing customers to a premium audio product.