Alexa's land-and-expand strategy is racking up the numbers

While Google is outselling Amazon in global units of smart speakers, other numbers show Amazon is doing just fine in expanding Alexa's reach and usage
Written by Brent Leary, Contributor

There has been a lot made of the fact that Google has outsold Amazon in global smart speaker sales during the first two quarters of this year. According to a study by Canalys, Google sold 1.3 million units more than Amazon last quarter (5.4 million vs. 4.1 million). And you have to hand it to Google for leveraging support for global languages, and lower global pricing, to expand the overall market reach of smart speakers.

Also: The Alexa-Cortana integration: Why wasn't this bigger news?

While Google has picked up the pace with a couple of nice quarters under their belt, I don't think that is a sign that interest in Echo devices and Alexa are waning. It's important to remember that Amazon is still leading the charge here in the US, and there were no major shopping holidays here in the first two quarters of this year -- with the biggest shopping period just ending right before and Prime Day taking place in the third quarter. So, it will be interesting to see what those third quarter numbers look like when we get them in October.

That aside, I think we need to look at a few other numbers that have come out recently to see how Amazon's reach in voice-first computing is growing even more dominant in some ways. During his keynote speech at last week's huge IFA tech showcase in Berlin, Amazon's smart home VP, Daniel Rausch, said there are now over 50,000 Alexa skills and 20,000 Alexa-enabled devices, including now having the ability for your Xbox to support voice commands via Alexa. And what's really staggering is that there were "only" 4,000 such devices at the beginning of the year. So, the growth in Amazon's "echosystem" of voice developers and manufacturers is thriving and accelerating. And that means more people are going to be asking Alexa for things well beyond just the devices Amazon is making.

Also: How to use Alexa and Cortana together CNET

And Rausch cited a few benefits for companies involved in the "Works with Alexa" program:

  • Companies that build Alexa-enabled devices are seeing a 43 percent business growth in the following nine months
  • Products with "Works with Alexa" certification realized an average 53 percent jump in business

These are the kinds of numbers that will fuel even ecosystem growth in skills and devices, if this pace can be maintained. Another number to think about is 275 million, as in the estimated number of Amazon Prime members analysts at Citi expect there to be by 2029 (up from 100+ million we're currently at based on a statement from Jeff Bezos back in July). That's an enormous number for a membership program, and it's a huge audience of folks who tend to be more likely than non-Primers to buy Amazon devices and ask Alexa to do things.

Want a few more numbers? Well just yesterday Adobe released results from a survey of one thousand US adults that showed the popularity for voice assistants is "about to pick up." According to the survey, 76 percent of smart speaker owners said their use of voice assistants has grown in the past year (compared to 38 percent of non-speaker owners), and 71 percent of them say they chat with their voice assistants at least once a day. And while smart speaker owners tend to use them for basic functions like playing music or asking what the weather will be like, the survey shows they are also beginning to use them for more moderate and complex requests.

Also: How to use the new Amazon Alexa and Microsoft Cortana integration TechRepublic

OK, I think the above numbers show that, from a variety of perspectives, Alexa is still rolling along, particularly here in the US, where Amazon is focusing its voice-first efforts. But, going back to Rausch and his presentation at IFA, beyond the stats he threw down at the conference, it was this line that caught my attention: "We know we've barely scratched the surface."

That stood out to me, because it's sometimes easy to forget that relatively thinking we are still early days in this area. It hasn't hit the mainstream yet. And even with the folks that are using them, the usage is limited in scope. But the limiting factor seems to be experience and not interest. And you have to imagine over time they will extend the types of experiences they'll pursue through smart speakers, and voice assistants will grow as long as those experiences are positive and empower them to do things more quickly and easily than before. And this fits completely in line with something I heard at another conference last week.

At HubSpot's INBOUND Conference, CEO and co-founder Brian Halligan stated the following:

  • Corporate focus has gone from products needing to be 10-times better than competition, to the experience your customer has with your organization (products, services, etc) needing to be 10-times "lighter" than the competition.
  • Today 80 percent of customer touches and interactions with your organization are with humans, which increases the opportunity for friction; In the future 80 percent of customer interactions must be self-service, which lowers the opportunity for friction.
  • Currently, 80 percent of IT spend is on tech that makes frontline employees more efficient; In the future, 80 percent of your IT spend should be on making your customers more efficient,

Also: How smart are Alexa, Cortana, Google Assistant, and Siri?

I couldn't agree more with Halligan here, and I think smart speakers and other devices leveraging voice assistants will eventually help accelerate the transitions he mentioned above. And I think these points resonate even stronger here in the US, where a significant piece of the consumer base is willing to spend more on the "lighter" experiences they value -- even if it costs more than other alternatives lacking ease, efficiency, convenience, or something else they value more than dollars, which is why Amazon's strategy to get Alexa into as many devices (theirs and tens of thousands of others) is still the first step in getting as many experiences flowing through Alexa's purview.

"Land and expand" has a ways to go before more complex and trust-consuming tasks like voice shopping will be adopted by the masses. But the momentum doesn't seem to be slowing at all.

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