How ASX small caps can use voice activated tech to their advantage
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Businesses, including ASX small caps, have gradually shifted to a Google-dominated world. But another search method is emerging with potential for large growth — voice activated tech.
How does it work? Basically, people ask their Alexa or Google Home device what they would usually tap into their computers or phones. But what many don’t realise is that this tech is advancing beyond just finding out the weather or directions.
Voice experience agency VERSA found at the end of last year that 1.35 million Australians had a smart speaker in their home.
It estimated that more than one in three were considering purchasing a voice assistant in the next 12 months.
Among voice activated technology generally (which includes technologies such as Siri), 62 per cent of smartphone users in Australia have used it. In China and India this figure rises to 77 per cent and 82 per cent respectively.
Voice tech is largely associated with the smart home and there’s only one small cap in that space – Quantify Technology (ASX:QFY).
Quantify’s signature device, qDevice, acts as an alternative to traditional light switches. It operates light switches ‘intelligently’ and also helps with energy reporting.
Voice search is expanding into the business to consumer (B2C) sector — allowing consumers to find the best goods and service providers. En-masse adoption of voice search would likely force companies to respond.
Woolworths (ASX:WOW), for example, has been rewarding some of its most loyal customers with Google Home Minis.
— The Hungry Mum (@Thehungrymum) February 12, 2019
A Woolworths spokesperson said earlier this year it was designed at helping people make shopping a whole lot easier by compiling a list as they looked through the pantry.
Digital marketing firm iProspect said in a white-paper on the topic that “smart homes and speakers will soon reach a tipping point and become a more influential medium in the shopping purchase journey”.
“Retail brands must prepare for this future in conservative markets and ensure their marketplace presence is optimised, strengthening their chance to be recommended by Alexa and other ecommerce powered shopping assistants.”
Voice activated tech could be particularly useful in the context of millennials.
According to iProspect, in Australia, 70 per cent of voice-search users are between 18 and 34 – a generation anticipated to become important as they inherit baby boomer wealth and enter their peak spending years.
The problem right now is that voice search is not the same across the board and businesses are having difficulty understanding what people actually want.
“We know nothing about what people are actually looking for with their words,” vice president of digital marketer Reprise Media Kevin Bishop said last month.
“Without specifics of the type of searches that are occurring, there is no way for us to get a clear view of the types of human behaviour that voice may be enabling or creating.
“Is it the busy parent perfectly finding a recipe and following it hands free? Or is it the ultimate arbiter of house party arguments?
“What do people use their Google Home Mini for? We don’t know. But apparently 41 per cent of smart speaker owners say it’s like talking to a friend or another person. Google’s marketing department is full of helpful tidbits like that.”
But the playing field is expanding and companies are finding new ways to utilise voice activated tech.
For example, Amazon announced a tie-up with Britain’s National Health Service (NHS) last week. Brits who ask Alexa for medical advice will get answers straight from the NHS website.
Allianz’s digital manager Miki Clarke suggested that a business owner that wanted to be in a good position to “play in the voice space” should put themselves in the shoes of their customer.
“Even if you don’t have a home assistant, have a play around with voice searches on your mobile phone,” he said.
“What would you, as a customer, be searching for, aside from the standard directions, opening hours and contact details?
“Think about the conversations you’re already having with your customers, whether that be on the phone or your website. Could any repetitive conversations naturally transition to voice assistants?
“For example, for Allianz, that would involve questions about what’s included in the policy. Or, what’s the difference between comprehensive and third-party insurance?”