Whenever technology giants like Amazon and Google enter a market, other brands tend to sit up and pay attention. In recent weeks both companies have taken big steps into the connected home, with Amazon launching its Echo home hub device in the UK and Google unveiling its Home controller during a press event this month. Besides pitting each brand against the other in the fight for supremacy over the ‘Internet of Things’ (IoT), these launches could mark a significant tipping point for consumer adoption of connected technology.
Amazon Echo has been available in the US for two years, where it has sold around three million units, so its launch in the UK confirms Amazon’s confidence in the product and its desire to gain a foothold in connected households globally.
Echo is ostensibly a voice-activated speaker that connects to music services like Spotify and Amazon Music, but it can also take commands and speak back to the user like existing smartphone technology such as Apple’s Siri. This could include reading out news headlines, calendar appointments or ordering services from other websites. Echo can also activate smart home appliances like Philips Hue lighting and the British Gas smart thermostat system Hive.
Google Home, which is due for release on 4 November, is also a voice-activated speaker that offers the same services, including compatibility with existing Google smart products like Chromecast and the Nest thermostat. Google’s advertising for the product states that with the user’s permission, “Google Home will learn about you and get personal”. This could include providing traffic information or setting alarms and timers based on people’s online information and behaviours.
In other words, Amazon and Google are trying to put themselves at the centre of the connected world with products that become more and more intelligent through machine learning. Research company Gartner predicts there will be 6.4 billion ‘things’ connected to the internet by the end of this year, up 30% on 2015, and that the figure could soar to 20 billion by 2020.
“The connected home is still a niche concept for consumers, but any time a company like Google takes a step into a market it’s significant.”
Matt King, head of technology research, Mintel
Despite this surge in connectivity, consumer adoption is still relatively low. A Mintel report earlier this year found that just 14% of UK adults have a smart kitchen appliance and only 7% own a smart thermostat, though 35% have a smart TV.
Mintel’s head of technology research Matt King believes the launch of Google Home could prove to be an important moment for the industry. “The connected home is still a niche concept for consumers, but any time a company like Google takes a step into a market it’s significant,” he says.
First and foremost, both Amazon Echo and Google Home have accessible price points that may tempt consumers who have previously balked at the cost of connected technology. The Amazon Echo is on sale for £149.99, while Google Home will reportedly retail for around £100. Both products boast significant improvements in voice technology that should encourage more consumers to start talking to their devices.
Furthermore, the willingness of both companies to connect their devices to smart products and services offered by other brands reveals their desire to create an open, accessible ecosystem that will draw in consumers. “We’ll see more companies working together because it’s still early days for this technology,” says King. “Making it simple for consumers is going to be key.”
New brand interactions
Brands from outside the world of technology are already expressing excitement at the possibilities of connected home technology. Speaking at the Festival of Marketing earlier this month, Unilever CMO Keith Weed referenced both Amazon Echo and Google Home and suggested that voice-activated artificial intelligence is an emerging trend that marketers should pay close attention to. Indeed in Amazon’s own marketing, it talks about the ability for people to order from Just Eat or Uber by talking to the Echo.
“We have quite an unnatural relationship with devices now where we prod [them] with our fingers and [they] respond,” said Weed. “It feels much more natural to talk to each other and I think in three years the power of voice will be there.”
In anticipation of this trend, certain FMCG brands are testing smart packaging that could fit into the wider IoT ecosystem. In August, drinks brand Malibu launched a UK pilot in which it made 40,000 of its bottles compatible with near-field communication (NFC) technology of the kind used for contactless payment.
The bottles, sold in Tesco stores, allow people to access exclusive content such as prize draws, drinks recipes and playlists when they hold their smartphones up to the packaging. The pilot was developed with IoT agency SharpEnd, which sets up testing centres for smart technology at the head offices of several major brands.
The agency also ran a research project with Mindshare earlier this year in which it trialled 10 connected packaging prototypes in five UK households. This included using NFC and Wi-Fi-connected smart buttons that allow people to re-order their favourite products by pushing the device. As part of the trial, the Amazon Echo voice assistant was also set up to speak to people with recipe information and re-ordering options related to the smart packaging.
The rise of ‘zero user interface’
SharpEnd founder Cameron Worth believes that the launches of Amazon Echo and Google Home signal the rise of “zero user interface”, where people will reduce their interactions with screens in favour of speaking directly to faceless machines. This will compel brands to redefine how they communicate with consumers, he argues.
“If you think about a brand that has spent millions of pounds on digital marketing – banner adverts, apps and things like that – suddenly they are having to wrestle with a device that has no screen and no brand messaging opportunities,” he says. “It’s just about having short, sharp interactions with a robot.”
Worth suggests the technology will move brands away from standard forms of messaging and advertising, prompting them to shift their focus to “brand behaviour”. This could involve thinking about how brands can work with connected home technology in a seamless, reactive and non-intrusive fashion. “That’s an entirely new consideration for brands,” he says.
It’s an intriguing prediction for marketers to ponder as both Amazon Echo and Google Home hit the UK market – and as more and more products become connected.