y, those who have invested in its development are looking to cash in. The 30-hour event, which is marked by significant discounts for Amazon Prime members, was the biggest sales day in the e-commerce giant’s history, with tens of millions of shoppers (50 per cent more than last year) in 13 countries making purchases across more than 100,000 deals. Eclipsing Amazon’s Cyber Monday and Black Friday sales, Prime Day 2017 grew by 60 per cent year-on-year, but it is Amazon’s Prime Day strategy that signals headwinds for retailers the world over. It pushed 100 of its most lucrative deals exclusively to voice shoppers a week before Prime even began, encouraging record numbers of consumers to use its voice assistant, Alexa, to shop. Various voice-enabled devices, including the Amazon Echo, Echo Dot, Echo Show and Amazon Tap, were significantly discounted and those shopping via voice had early access to the event itself. Prime memberships were discounted by $20 for consumers signing up via voice and there was even a $5000 sweepstakes for those buying on Prime Day through voice. The push paid off. Amazon claims to have sold seven times more Echo devices than Prime day 16, adding to more than 11 million device sales since it launched the voice application in 2015. Amazon’s one-two punch What does this mean for the broader retail sector? There are now more Prime voice devices in more households, encouraging more consumers to sign up for Prime, which in turn drives further voice penetration – all fuelling Amazon’s explosive growth. As National Online Retailers Association (NORA) chairman Paul Greenberg notes, it’s a virtuous cycle that represents perhaps the most significant loyalty initiative in retail history. “I’ve never felt that retail is a zero-sum game, but this is really a loyalty play when it’s all said and done,” Greenberg says. “The genius is that they’re creating a cycle that leverages voice and the internet of things to sell an astronomical amount of product.” It’s a sobering reality for many Australian retailers, with Amazon having confirmed its expansion Down Under – how long before Prime Day and Alexa hit the local retail scene? Alphabet is also preparing to expand voice capabilities into the Australian market, having announced its intention to launch Google Home here before the end of the month, only two weeks after the local launch of its other smart home venture, Nest. Both systems come with the capacity to enable voice shopping, cementing Amazon and Alphabet’s presence in the living room, while Apple looks to make Siri a key feature of its growing wearables range. The phenomena empowers those companies with voice-enabled devices to potentially act as gatekeepers between shoppers and products, J. Walter Thompson’s Asia Pacific digital directory, Josie Brown explains. “The risk is that the device recommends its own brands, and if you’re asking about a product category, then the question is: what brand will that device select?” Brown tells IRW. “It’s not always going to be easy for customers to specify what brand they want to put in their shopping basket.” Easing the cognitive load Brown, who has worked on recent research assessing consumer attitudes towards voice in the UK, US and Australia, believes that local consumers will eventually embrace voice interaction. According to the research, voice recognition technology has passed well beyond crucial error rate barriers, with Google now claiming that its voice assistant Allo has a propensity for speech-error that matches humans. Improvements in technology have coincided with a significant uptake in usage in the US and UK, as the proliferation of voice-enabled devices throughout the market drives exponential growth in penetration, Brown says. “The trends seen in the UK and US show that when we have the right devices, the Australian market will follow suit,” she predicts. “It will explode in Australia when we have devices localised for the market.” Walter Thompson, alongside their research partners, describes consumer willingness as an “easing of the cognitive load”, citing survey results that indicate most consumers find voice interaction to be more convenient and simpler than typing. Bobbing and weaving There is concern that the response from Australian retailers could be muted at best, particularly if Amazon manages to execute the core promises of its Prime model. The size of the Australian market, the capital expenditure required to develop voice devices and the required category range to make voice shopping convenient provide Amazon with a significant comparative advantage in the world of voice. Brown says there have been discussions with Telstra regarding the possibility that the telco might develop its own voice device, using existing market share in partnership with major retailers to gain a foothold, but notes that the most likely scenario is that retailers will look to voice-enabled mobile applications. “It would be a much more obvious response to look at how to make your retail channel present in the current device environment, or within your own app. “But it’s hard. If you’ve got a hardware device in your home, the behaviour will be to use that device,” she says. Greenberg agrees, contending that partnerships with Amazon could lift all boats, noting recent interest in an Amazon partnership from ASX-listed bedding retailer Adairs as a potential sign of what’s to come. “When there’s a one-two punch coming your way, you either take it on the chin like a sack of potatoes or you do your own bobbing and weaving.” There are also headwinds emerging on the regulatory horizon for Amazon and Google which relate to their capacity to gate keep the retail market. The European Union recently filed a US$2.7 billion antitrust suit against Google for its implementation of its online shopping service, Google Shopping, and discussions are reportedly underway among US regulators about whether Amazon could be pursued over similar laws for its growing control over the market. How the Australian Competition and Consumer Commission will react to Amazon’s Prime/Alexa strategy will be undoubtedly closely watched by the industry. Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.