Will Smart Speakers Replace Smartphones?
Banks' and credit unions' strategic plans are dominated by digital banking initiatives these days. As well they should. But there's an implicit assumption in many plans that could prove troublesome: The assumption that the smartphone will remain consumers' dominant digital device.
A recent study commissioned by NPR questions this assumption. Some of the key stats from the report:
- Ownership. 18% of Americans over 18 years old own a smart speaker (note: the report claims that 43 million Americans 18+ have a smart speaker, but 43m is 18% of all Americans, not just those over the age of 18). Three-quarters of owners are "early mainstream" adopters who have owned a smart speaker for less than a years, and one-quarter are "first adopters" who have owned a speaker for more than a year.
- Age distribution. Smart speaker ownership is evenly spread across age groups. This is noteworthy since new technology adoption typically skews towards the younger segments of the population. In fact, a third of early adopters are over the age of 55.
- Usage. Compared to the first month of owning a smart speaker, half of the owners use the speaker more, one-third use it less. According to the report, "First adopters demonstrate more advanced smart speaker use (e.g., controlling home security and other household devices), while early mainstream users rely on smart speakers for a wider range of daily activities (e.g., ordering food, making calls, getting traffic reports, researching products and shopping)." Screen time and use of other technologies have been affected by smart speaker usage, as well.
- Future smart speaker purchase intention. Among first adopters, a little more than half own two or more speakers, and 44% think they'll buy more. Among early mainstream users, nearly half already own 2+ speakers, and 58% think they they'll buy more.
- Purchase behavior. Roughly seven in 10 smart speaker owners have purchased something through their speaker in the past three months, and a quarter added an item to their cart so they could review it later for purchase.
The adoption rate of smart speakers is paralleling the adoption rate of smartphones. Four years after the introduction of smartphones, penetration in the US was 17%. Smart speakers, introduced in 2014, are in 18% of homes four years after they were introduced. The lower price point for smart speakers might argue for faster adoption going forward, but the pricing strategies of mobile carriers help fuel smartphone growth despite their high price tag.
The last thing banks and credit unions need at this point is another customer touchpoint to have to invest in. But the adoption rate and usage patterns among smart speaker owners point to an important new technology skill for financial institutions to master.
Director of Research