A new study by the market research company NPD Group reveals interest groups suspected that Amazon Echo’s main purpose was to push the sales at Amazon. The study showed that Echo investors spent about 10% more when they decided to buy the voice-powered smart speaker that they had done before.
The NPD Group used a checkout tracking purchase monitor that provides data and analyzes customer spending as well as the overall number of receipts. The tracker found a 6 percent bump in the number of purchases Echo owners made to Amazon.com compared to purchase before Echo came into being.
The data picked was sourced from Echo’s full-term availability, which has been about two years. Half of the money that Amazon owners spend online is spent at Amazon.com after they pick a device. The voice activated device enables the owners to place their orders on Amazon without using the app or visiting the site. By the use of the Echo and other devices, Amazon is eliminating the friction that buyers experience when buying from its marketplace. This could help consumers increase their purchases from the retailer.
Echo has simple design and looks like a countertop sort of device and has an engaging voice activated virtual assistant that performs hands free commands. It answers to questions, controls smart devices, and plays music. For the two years it has been in the market about 1.6 million devices have been sold globally.
Amazon’s spirited efforts to create convenience in purchasing have continued to contribute to their growth in the market. They introduced Dash Buttons in 2015 that allowed one-click ordering on partner brands. These two devices give Amazon an upper hand over competitors as consumers will not have to look elsewhere when shopping online.
Convenience also brings about customer retention, as customers are kept within the Amazon’s business ecosystem. In this case, Echo owners may be some of the most valuable assets that Amazon has since they continue to return to the marketplace and purchase larger orders.
Amazon’s use of the smart devices lays a foundation for other retailers to use its platform to sell. With the increased pace of innovation, competitors use the platform to sell more without having to spend more in proprietary devices. For example, the Dash Buttons offer products from leading brands such as Tide, Glad and Dove. Echo is associated with Uber and Campbell.