IS VOICE ORDERING A VIABLE C-STORE OPPORTUNITY?

Tammy Mastroberte,
09/28/2018
Convenience Store News  

NATIONAL REPORT — It doesn’t seem that long ago that mobile ordering and mobile apps were the new must-have technology for retailers. But now, with the lightening-fast movement of the tech industry, the latest trend to hit the market is voice ordering — and it’s growing fast.

The major players in the space are Amazon, with its Alexa and Amazon smart speaker devices, and Google with the Google Assistant on its Google Home products. Even Apple is getting into the game with its new HomePod, although it doesn’t have the capabilities of the others yet.

Retailers in a variety of markets are beginning to integrate with these systems — Walmart, Domino’s and Starbucks, to name a few — allowing customers to use voice ordering for a variety of products. Even Altoona, Pa.-based Sheetz Inc. is offering voice ordering with Amazon in the convenience store space.

“I think somewhere between five and 10 years from now, we will laugh at how we used to open a browser to place orders,” Rob Rastovich, chief technology officer at ThingLogix, a provider of Internet of Things (IoT) solutions based in San Francisco, told Convenience Store News. Rastovich also runs a cattle ranch in Bend, Ore., that uses voice ordering with local pubs that order meat on a regular basis.

“People thought nobody would put their credit card on the Internet to buy something 20 years ago and now, it’s commonplace. If you are not online, then you are not in business, and it will be that way with voice ordering, too,” he said.

Currently, the most commonly ordered items using voice ordering are groceries, which represents 20 percent of all voice orders through home devices, according to new research by global firm OC&C Strategy Consultants, based in New York.

Shopping via voice ordering is expected to increase from $2 billion today to $40 billion by 2022, with the number of smart speakers in homes expected to jump to 55 percent from only 13 percent today, according to OC&C.

“In the last six months, both Amazon and Google stepped up the marketing of their smart speakers, and new versions are coming to the market,” said John Franklin, associate partner at OC&C. “It’s starting to grow and move past the early tech adopters and into mainstream.”

Along with the penetration of smart home speakers increasing at such a rapid rate, consumers are becoming more comfortable with voice ordering. They’ve moved from using their speakers for alarms, trivia questions and listening to music to actually shopping, noted Franklin.

WHAT ABOUT THE C-STORE?

As convenience stores continue to become more sophisticated in their foodservice options, and with grocery being the top category for voice orders right now, should c-store operators be watching this technology trend to see where they can take action?

Most experts say the answer to that question is yes.

“If this is what consumers are drifting to, c-store retailers will have to adjust accordingly,” said Bill Bishop, chief architect and co-founder of Brick Meets Click, based in Barrington, Ill. “We have a situation where these types of services are being increasingly demanded by customers and, over time, if you don’t’ have them, you won’t be able to protect your business.”

Sheetz, which has roughly 575 stores, was the first c-store operator to announce voice-ordering capabilities in December 2017 — specifically for its Made to Order food using Amazon’s Alexa. Customers with a Sheetz online ordering account and an Alexa-enabled device can enable the “Sheetz skill” on their device or the Alexa app, and start an order by saying “Alexa, start Sheetz” or “Alexa, order my favorite from Sheetz.” Then, they just follow the guided prompts to place an order for pickup at their local store.

For c-store retailers looking to take the plunge into voice ordering, the first thing to set up, if it’s not already established, is a business process to take orders in advance, and a system to manage it all. If they have a delivery option, either in-house or through a third-party, this also needs to be considered as part of the equation, according to Bishop.

The next step would be to create an Alexa skill or Google play to integrate with either company’s devices. This will “train Alexa or Google” on what a customer will ask for when ordering through the devices, explained Rastovich, whose company ThingLogix serves as middleware between a company’s systems and Amazon’s Alexa or Google Home. For his own cattle ranch business, for example, he had to set up an Alexa skill that would know as soon as someone said “barley beef” that the barley beef system would open on his end for the order.

“Retailers need to develop the skill using Amazon language, so if I was Domino’s, I would develop a skill that allowed customers to say ‘Alexa, order me Domino’s,’ and that is the crux of how the technology works,” Franklin said. “Companies have to view this in terms of how the customer will order. Often, the consumer will not ask for a product the way it’s currently branded. They will refer to it in the way they are familiar with it.”

The final part of the equation is setting up Alexa to talk to a company’s own technology systems, such as a point-of-sale system. “Just as if someone went to your website, clicked and ordered something on mobile, it would look the same on your end coming from Alexa,” explained Franklin.

With more and more retailers adopting voice ordering, and OC&C calling it the “next major disruptive force in retail,” voice ordering is not something to be ignored. And for those who are already offering online and mobile ordering for foodservice in the c-store space — and even delivery in some cases — voice ordering is the next logical step.