Amazon Alexa Adds Voice Commerce Features for Third Party Developers
Amazon has announced new features to increase voice commerce and enable third-party developers to benefit from driving shopping transactions through Alexa. During the Alexa Live event on Wednesday, Amazon debuted Alexa Shopping Actions. Voicebot’s Voice Insider newsletter was the first to report on the secret beta program behind the voice commerce solution in December 2020.
How Alexa Shopping Actions Work
Alexa Shopping Actions enable third-party Alexa developers to promote the sale of any product sold through Amazon.com from within their skill experience. It does not have to be a product the skill developer produces or sells, just one that is available for purchase through Amazon.
When skill users are offered the opportunity to purchase they can ignore or reject the promotion and the skill continues on with its normal experience flow. However, if they accept the offer, Alexa guides the user through the voice shopping experience to the confirmation of the order. After the order is complete, the user is returned to the Alexa skill which is still active where the user experience left off.
“To make it easy for developers to design a shopping experience with Alexa Shopping Actions, we are launching Shopping Templates (including recommend a product, browse multiple products, find a product) that encapsulate Amazon-designed, tried-and-tested, dialog patterns and responses that a developer can plug in and customize [for their] skill,” an Amazon spokesperson told Voicebot in an email interview.
The benefit to the skill developer comes through the Amazon Associates program. This is Amazon’s affiliate marketing program and it has been expanded to Alexa skills using the Shopping Actions. This enables the skill developer to receive a referral fee of up to 10% according to the announcement. However, in practice, the referral fee is 1% – 10% of the purchase price depending on the product category. One developer that participated in the beta program said he had received referral fees between 1% and 8% and the conversion rates were higher than what you find on the web.
Bringing Consumer Brands into the Alexa Ecosystem
This is good news for Alexa developers as it presents a new monetization option for their skills. Many Alexa skills focus on a particular niche and are good candidates for in-context advertising solutions. With that said, the bigger impact is likely to be with consumer brands.
Amazon has long hoped that every consumer brand would create an Alexa skill. That hope has not so far been fulfilled though a few have taken the leap. However, consumer brands that are currently selling on Amazon now have a new incentive to launch an Alexa skill. They are no longer limited to implementing experiential and engagement-oriented skills. Alexa Shopping Actions now enables them to use Alexa as a new channel for direct sales. This means that the new feature is likely to have a bigger impact on consumer product brands launching new Alexa skills than existing third-party developers driving a significant new source of revenue.