CapTech Research: A Profile of Smart Speaker Users

It's been almost 3 years since Amazon burst onto the scene with the Echo and set off a "war for the living room" with voice-enabled devices that now includes Google Home, HomePod (once it's released), and others. Since then, Amazon has sold over 11 million Echo smart speaker devices through the end of last year. However, for all the media attention on sales and features, relatively little is still known about the actual consumers purchasing smart speakers. Or, perhaps what is more interesting, there is little known about the consumers not purchasing these devices. Consumer perceptions of these devices' cost, usefulness, complexity, and security loom large on their continued adoption.

As consumers adopt these devices and natural language processing (NLP) apps in increasing numbers, companies are coming to CapTech asking what this should mean for their business. Without a good picture of the user base, companies can't get a clear sense of whether voice-enabled channels and NLP fit within their brand engagement strategy. Anticipating these kinds of questions from our clients, we decided to go out and get the data we needed.

In September 2017, we conducted a nationwide study of nearly 1000 American consumers to examine adoption habits around smart speakers, looking at everything from age and income to shopping habits. First, let's take a look at just exactly who these smart speaker (SS) owners are (and aren't).

Demographics of Smart Speaker Adopters

How old are smart speaker owners? Just over half (53%) of smart speaker owners are millennials or younger, 32% are Gen X, and just 12% are Boomers. It's clear that the majority of smart speaker owners are digital natives who are more used to interacting with NLP apps and intelligent assistants.

The other thing to consider is the lower end age of this group. If you're 18 today, that means you were approximately 11 or 12 years old when Apple introduced Siri, making it highly likely your first phone had a digital assistant included. This group is very comfortable voicing commands to their devices. They're not just digital natives, but "voice natives". That doesn't mean you should ignore other age groups, as they are certainly not an insignificant part of the population, but it means that the older groups are more likely to adopt smart speakers and NLP apps at a slower pace.

In addition to age, the main variables that drive smart speaker ownership are income and gender. More than half (58%) of SS owners make over $75,000/yr and 60% are men (vs. only 38% of non-owners). More than half of SS owners have a bachelor's degree or higher, but this probably correlates with higher incomes rather than education itself being a driver for adoption. People with more disposable income are more likely to spend money on gadgets like smart speakers. Same goes for men, particularly young men, who are the most likely to be early adopters of new technology like this.

When we examined the rest of our demographic data, we were able to form a picture of the most "typical" SS owner:

The "typical" SS owner is a young married couple (73.5% of SS owners were married) who are starting to get to the higher end of their salary potential, probably with kids, and own a home (77% SS owners owned their homes). They are slightly more likely to live in the city, but are also in the suburbs in larger numbers. Not to the neglect of other customer segments, but data such as this can help companies get a better sense of how voice fits into their strategy.

Behaviors of Smart Speaker Adopters

With an understanding of who smart speaker owners are, we can look at how they use them. Looking at the relationship between the intelligent assistant on consumers' phones and smart speakers - more than four out of five owners say that they find their intelligent assistant to be useful. In fact, 65% of smart speaker owners use their intelligent assistants more than 4 times a week. This shows an acclimation to this interaction pattern that makes these "voice natives" more amenable to talking with a smart speaker.

Our data also shows that the longer people owned these devices, the more useful they found them to be. All of this is in sharp contrast to other devices such as activity trackers, which consumers typically lose interest in after 6 months. This gives a good sense of the resilience of the platform in terms of consumer adoption and is an important factor for companies adding voice to their omni-channel customer engagement strategy.

The next thing we looked at were the most popular uses of smart speakers for those who currently owned them. The top three were:

• Playing music (82%)
• Inquiries/information gathering (42%)
• Shopping (39%)

These use cases will evolve with NLP and smart speakers, similar to the development of the iPod. When the iPod first came to market, it could only play music. As the platform and device eventually developed into the iPhone, use cases evolved into other categories, such as watching videos and web inquiries. Eventually, as the app store developed and businesses embraced the technology, the possibilities expanded into the rich collection of functionality that is available today.

We expect smart speakers to follow a similar pattern. As Artificial Intelligence, Natural Language Processing, and Machine Learning develop, and businesses embrace the technology to meet consumer needs, the sophistication of functionality will evolve. People won't stop using them to listen to music or answer questions, but as companies begin to develop applications and more sophisticated use cases, we expect to see the complexity of use grow.

Shopping, the third most popular use of smart speakers, probably refers to some actual shopping, but more likely the building of shopping lists. This is an interesting predictive pattern. According to our research, two-thirds of smart speaker owners said they preferred shopping online rather than going to a store and were comfortable making purchases with a smart speaker. All of this points to the potential of voice-enabled technology for e-commerce in the near future.

Supporting this further, we know that 79% of US adults made at least one online purchase in 2016 with that number sure to increase. These are important trends for retailers to recognize. Similarly, consumers' proclivity toward making inquiries of these devices could be helpful for customer service functions or more agentive functions, such as travel planning or insurance quotes (more on this in a future post).

In this post, we've only touched the surface of the data gathered in our study. If there is a data point you would like more information on, feel free to reach out to us for additional insights. We are continuing to analyze the results from the study, so follow us and stay tuned for additional blogs. We will be covering topics ranging from Internet of Things (IoT) "Power Users vs. Laggards", to privacy and security concerns, and much more.

The Data: Who are smart speaker adopters?

Mostly Millennial:

• 53% of smart speaker owners are millennials or younger (18-36)
• 32% are Gen X (37-52)
• 14% are boomers or older (53+)

More Men:

• 60% of Smart Speaker owners were men
• Only 38% of non-owners were men

Married with Children:

• Smart speaker owners were more likely to be married 73.5%.
• Only 58.1% of non-SS were married
• People who own a smart speaker were also more likely to have children.
• Of SS owners, only 32% reported not having children

Higher Income:

• More than half (58%) of SS owners make over $75,000/yr

More Education:

• 52.6% of smart speaker owners have a Bachelor's degree or higher
• 34% of non-owners have a Bachelor's degree or higher

Home Owners:

• 77% SS owners owned a home while only 63% of non-SS owners were home owners

Urban then Suburban:

• Smart speaker owners tend to be slightly more likely to live in an urban setting (37% vs 21%)
• SS Owners were less likely to live in a suburban (40% vs 49%) or rural (23% vs 30%) setting

The Data: Satisfaction & Usefulness

Satisfaction:

• 82% of smart speaker owners found their intelligent assistant to be useful
• 65% of smart speaker owners use their intelligent assistants frequently throughout the week (more than 4 times)
• 82% of SS owners agreed or strongly agreed that their smart speaker was useful to them. 13% were neutral and only 5% disagreed or strongly disagreed
• 81% of SS owners agreed or strongly agreed that their smart speaker met their expectations. 14% were neutral and only 5% disagreed or strongly disagreed

Top three activities:

• Playing music (28%)
• Inquiries/Information Gathering (15%)
• Shopping (12%)

Online Shopping:

• Over half (66%) of smart speaker owners said they preferred shopping online rather than going to a store
• Over half (65%) of smart speaker owners said they were very comfortable or comfortable making purchases with a smart speaker.
• 12% said that they use their smart speaker to shop online (#3 on the list of activities)

Credits

Contributing Researchers: Jason Snook, PhD, Sejla Petrovic, Lindsay Jones, Chris Thomas

Methodology: National sample of 957 consumers aged 18 and up deployed in September 2017.