Startups push for more ‘conversational commerce’ but it’s already here

When Katie Finnegan, founder of Walmart incubator Store No. 8, spoke at the MIT Technology Review’s recent EmTech Next event, she told the audience the future of commerce was “conversational commerce.” Her examples of what this future might look like revolved largely around Jetblack, a startup launched from Store No. 8 that focuses on text-based e-commerce. Anyone can order anything by shooting off a text message. The idea is that Jetblack will eventually graduate to voice ordering.

In fact, many people are already ordering through voice commands in the U.S. Voice assistants embedded in smart speakers like Amazon Echo and Google Home are one of the most visible applications of artificial intelligence to date because of their home utility. It’s also changing e-commerce.

(Source: Internet Trends 2018, Mary Meeker/Kleiner Perkins)

From the third to fourth quarters of 2017, the install base of the Amazon Echo leapt from less than 20 million to more than 30 million. It was by far the largest quarter-over-quarter growth for the device and another vindication for Amazon’s e-commerce strategy that has sometimes left investors anxious or scratching their heads.

Since our piece on the coming “voice-controlled world” last year, smart speakers have only become more prevalent in the U.S. New entrants have been gaining market share. Google Home outsold the Amazon Echo for the first time in the first quarter this year.

In addition to Google Assistant being widely credited as offering more useful and accurate answers to queries, Google has also spurred a price war. Google and Amazon both have introductory speakers that start at $39, but Google has done multiple promotions dropping the price to $29 and offered deals to get it for free with the Pixel 2.

Amazon, on the other hand, has focused more on boosting the number of Alexa Skills (third party services Alexa works with) and getting Alexa into as many smart devices as possible. Amazon gives developers access to Alexa’s API, allowing it to be put into everything from refrigerators to TVs, and manufacturers have so far been happy to utilize the easily-accessible AI platform.

Since the boom in smart speakers, Apple and Samsung have also entered the market along with an assortment of Chinese competitors like Lenovo, which makes its own Alexa-equipped speakers.

So are we already living the world of ubiquitous “conversational commerce” envisioned by Katie Finnegan and Jetblack? Not quite yet, but the market certainly appears to be moving in that direction.


In the U.S., 47.3 million people have access to a smart speaker, according to a report. That means nearly 20 percent of the U.S. adult population lives in a home with at least one smart speaker (1.8 speakers per home, statistically speaking).


For now, making purchases is the least popular activity among the main uses of smart speakers. Only 2 percent of users make use of this function daily. This will likely grow over time. It’s already a more popular use among iPhone owners, who are 8.5 percent more likely to have used a smart speaker to make a purchase. They’re also more likely to own an Amazon Echo and to have used Alexa’s third-party skills.

(Source: eMarketer)

Trends among iPhone owners do often become the norm over time, as they are usually targeted first for typically being bigger spenders. Another sign that we are still in the early adopter phase is that electronics are one of the most popular categories for purchased goods and services through smart speakers, according to a survey of consumers in France, Germany, the U.K., and the U.S. Only ordering meals and specialty services like booking a taxi ranked higher.

Many U.S. retailers are excited about the potential of conversational commerce. Easing the friction of making a purchase will undoubtedly be good for the bottom line of any company that stakes out a dominant position in this sector.

China is the prime example of how more seamless e-commerce experiences can mature a country’s online retail sector. The combination of fast smartphone access, free or cheap shipping, mature mobile payment platforms and emerging trends like social commerce has driven rapid e-commerce growth. Conversational commerce is just one more component of these trends.

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