Google Assistant announces new hardware partners

In-home on-demand services will turn on voice, phone, smart TV, and PC interfaces. As reported yesterday, Google trails Amazon and Apple in installed branded hardware base. Today, Google announced new hardware partners in automotive, home appliances, cameras, and other industries. JBL, Lenovo, Sony, LG, Altec Lansing, iHome, and others joined the ranks of Google Assistant-compatible devices.

Google claims Assistant is now available on 400 million devices. Availability is different, of course, than actual usage.

 

Ford & Postmates tackle local business services

Ford today announced a partnership with Postmates to expand on-demand services for small business at CES. Postmates reports that SMBs joining its network see “4X revenue growth” and claims it has the most extensive on-demand delivery fleet in the U.S. A variety of companies will enter this space in 2018, among them HERE Technologies which announced a competing service that aggregates on-demand mobility options yesterday.

“Expanding access to smaller, local merchants is at the core of our business,” Vivek Patel, Postmate’s vice president of Business Operations, said. “We view self-driving vehicles as another potential tool that can level the playing field for these businesses, and ensure that geography alone does not equal destiny.” 

We applaud the focus on small business. It is where the on-demand economy can take root and develop opportunities in every community.

Delivery without people remains problematic, as it is the last few yards or flights of stairs that presents the most significant barrier to automated deliveries. Sure, a car can get to the curb in front of an address, but how to get the package inside with the appropriate brand experience, requires a human. Postmates will likely utilize Ford autonomous vehicles to streamline its workers’ travel. The companies are working together on how to support the last-yard fulfillment, as well as improve consumer discovery of, and purchases, through automated deliveries.

HERE Introduces Open Mobility Marketplace

HERE Technologies today launched its Open Mobility Marketplace service at CES in Las Vegas. This announcement is significant for the on-demand market because the Open Mobility Marketplace allows transportation services providers — from driving and delivery to organizing regular commuter bus rides — to list and compete through a searchable API, from a site, in an app, or through backend integration.  ZDNet has a short summary, and HERE’s press release is here (pun acknowledged).

Utilizing demand analysis and fleet optimization algorithms, as well as asset tracking capabilities, the HERE Open Mobility Marketplace promises to surface the best price and most flexible source of mobility services for a business. For example, a retailer could search for one on-demand delivery driver or an entire fleet of drivers registered with the HERE service.

The current mobility companies, including Uber, Lyft, GrubHub, and automakers exploring on-demand cars, should take notice. Aggregating demand at a higher level of abstraction allows HERE to connect users to more options than the branded transportation providers across a broader range of use cases than Uber or Lyft, which focus primarily on the consumer. HERE could break the duopoly in local car services while delivering more flexibility for business considering using on-demand resources.

The Cryptocoin Boom Could Choke Off On-Demand Services

Jon Evans at TechCrunch raises a troubling issue with cryptocurrencies: They are so popular that the underlying blockchain technology has failed to deliver low-cost transactions at scale.  The coins that have generated vast fortunes, such as the $59 billion in wealth Ripple XRP co-founder Chris Larsen realized on the rapid run-up of the currency he created, are swamping the blockchain infrastructure. Evans writes:

As a result, entire categories of cryptocurrency experimentation and innovation are on hold until the bubble bursts, or until / unless Ethereum finds a way to scale such that transaction fees plummet. Oh, people can still write and deploy code. But nobody will use it. Curious would-be users will be repelled by the nontrivial expense of mere experimentation, never mind ongoing usage.

The problem is not the coins, but the demands on the blockchain that supports BitCoin, Ripple, Ethereum and other currencies. A distributed ledger, blockchain allows the public recording of transactions. The promise of blockchain and cryptocurrencies was low- or no-cost transaction fees. Evans notes that the average fee for an Ethereum transaction is now $2.50. Every transaction, whether it is worth $0.01 or $1 million. Great news for cryptocurrency traders, perhaps, but bad news for developers.

At $2.50 per transaction, Ethereum is priced too high to support micro-transactions and less cost-effective than a credit card for values of less than $85. On-demand transactions, such as paying $5 for a meal delivery or $20 for an hour of a homecleaner’s work, are not feasible at $2.50 per.

Blockchain’s primary value proposition, after its anonymity, is low-cost recordkeeping and transaction processing. The cryptocurrency bubble is a disaster for platform marketplaces and developers of distributed logistics and transaction systems. High costs in blockchain cut off a promising direction for developers and business architects for the foreseeable future.

The article is worth a read, especially if you are bullish on blockchain as a platform for software development.

In-Home Smart Speakers: A War of the Big Three

Smart speakers represent a new interface in the customer relationship. Holiday shopping in 2017 established clear battle lines in the home AI market. Amazon, with its Alexa service, Google Home speakers, and Apple’s Siri-enabled services and delayed HomePod speaker are way out in front of the rest of the pack in terms of installed base. Indeed, one columnist says this year’s Consumer Electronics Show is the Microsoft Cortana assistant’s funeral.

Analyst firm Canalys projects 42.8 million or more smart speakers will be sold in 2018 in the U.S. and China.

Voice UX is usually portrayed as a silver bullet for customer engagement, and it may become so over time. For now, however, accuracy and contextual understanding of speakers’ words is lacking. Fixed command phrases that must be memorized and delivered in specific sequences are problematic for people.

Bots, being the shiniest of the new tech playthings, get plenty of praise, but the expectations for voice interaction are over-hyped right now. Until speech interaction approaches human conversational speed and efficiency, which requires more semantic understanding than bots currently provide, intimacy will be hard to achieve.  Voice UX may be good for instigating repeat orders, e.g., “Alexa, order another box of Tide,” are practical, but complex selling will have to wait for further evolution. It is likely that AI bots will support human connections, bringing humans onto a call with a user when the bot’s responses are insufficiently engaging, for many years to come.

Humans, we believe, are essential to trust relationships. Speakers can help make connections, but will not be able to handle simple objections for years to come. Think of the smart speaker like the new switchboard for consumers to connect with companies rather than as an unstaffed sales interface.

Where do the voice service leaders rank in units sold during 2017?

Google used heavy discounting during the holidays to sell 6.8 million Google Home speakers between October and Christmas. Consumer Intelligence Research Partners, a research firm, reported that Google had sold seven million Google Home units before the fourth quarter. Hence, Google Home sold approximately 13.8 million units through December 31st.

By contrast, Apple did not have its $349 HomePod speaker ready for the holidays, and we can count only Siri-enabled phones and Macs sold, for a total of 211.88 million iPhones and 19.25 million Mac computers, or 231.05 million Siri-capable devices in 2017. This is a considerable number, but currently has no speaker complement to these devices, nor the tens of millions of Apple TV devices its sold.

Apple’s ability to meld voice interfaces to a wide range of services through HomePod, iPhone, Apple TV, Macintosh and in-car systems is the company’s residual opportunity. The Siri strategy remains too fragmented, as it is missing an ambient listening post in most homes. The HomePod story and user experience is a critical test for Apple in 2018.

Amazon is the leader with real-world tools and services in consumer homes. By the end of Q3, 2017, 20.5 million Alexa devices had been sold, according to voicebot.ai. Jeff Bezos, Amazon CEO, founder, and richest person in the world said Amazon sold “tens of millions” of Alexa devices over the holidays. Assuming Bezos is using the phrase accurately, there are at least 45 million Alexa devices boasting the largest variety of “skills” of any platform.

Is Cortana out of the picture for good? Microsoft has continued its increasingly open approach to partnering, announcing it will integrate Cortana and Alexa for Windows users. While the PC market is slowly declining compared to mobile devices, it still accounts for more than 200 million units shipped annually. That’s a beachhead of a different kind; one Microsoft must leverage to compete in its cognitive services business. Cortana may not be the voice speaking from PCs, but Microsoft could become the master integrator of voice services.

Ultimately, smart speakers will extend the voice and P2P aspects of on-demand services in the home. People in local markets will deliver the personalization promised by intelligent speaker hype by tying into and using voice UX to connect with customers when appropriate.

 

This Week’s On-Demand Business Activity Rundown

Didi Chuxing, purchased Brazil’s 99 for $600 million, in addition to its previous investment in the target company. 

Splend, an Australian fleet management company that provides cars to Uber, Lyft, and other transportation network company drivers, raised $220 million in new debt financing this week to support inventory expansion. Between equity and debt financing, Splend has $232.2 million on hand to spend now.

Search and content don’t always go together. In fact, they may work at cross-purposes, raising barriers to search access to competitive content sources and reducing trust in the search engine’s objectivity. Google seeks to sell restaurant guide Zagat after purchasing it for $151 million in 2011.

GrubHub’s annual Year In Delivery list is out. Lettuce Chicken Wraps were the biggest gainer among orders last year and is expected to be popular in 2018. Avacado toast peaked earlier in 2017, but earned the biggest gain in orders overall.

Transportation network companies are changing wealthy New Yorkers’ home buying preferences, sais a leading realtor.  “Today, in our Uber-tech world — I [can be] in the back of a car with my iPhone, and I’m not losing out on anything. That has changed [commutes] dramatically. Your commute time is not lost productivity,” realtor Leonard Steinberg told Business Insider. Consequently, the wealthy are willing to buy homes further from work than in past years.

Consumers experience of media will inform their retail expectations. Now that the majority of audio consumption is fulfilled through streaming services, with video close behind, consumers have come to expect immediate gratification in most transactions.  Watch for media to set consumer’s patience levels with on-demand delivery and service experience.

Beauty products companies are shifting to chatbot-based and interactive customer interfaces.  The idea is that beauty-related tasks are immediate and susceptible to machine analysis. Wondering if you have too much eye shadow on, let a camera-equipped bot check it out? What if a human being was also able to provide advice? That’s a one-two punch that will convert.

Four guys recreate Amazon Go in one and a half work days

We live in astonishing times. Amazon Go offers customers the ability to walk into a store, select products, and leave without interacting with a cashier. Now, four coders at the University of Waterloo recreated the Amazon Go experience using off the shelf (Raspberry Pi) hardware and publicly accessible APIs in just 36 hours. It took Amazon years to achieve the same capabilities.

Offered as a reminder that no company has a monopoly on a technical advantage.

GrubHub court signals drivers could be considered employees

JDSupra, the legal news service, points to a filing in Lawson v. GrubHub that bodes ill for labor marketplaces, such as GrubHub, Uber, Lyft, TaskRabbit and, well, the rest of the on-demand economy. 

Last week, the plaintiff’s attorney, Shannon Liss-Riordan, submitted a Notice of Supplemental Authority that points to a pending decision by a New Jersey court to apply a restrictive standard to the categorization of workers. If that standard is applied in the GrubHub case, GrubHub will have to treat drivers as employees, as well as confine on-demand markets to specific industries. A disaster for the current model in on-demand economies.

The case, which is in the hands of the US District Court for the Northern District of California, could set the standard for the entire industry. In that case, a new organizing point for the engagement with customers, workers, and government.

Talking Cures: Home speakers, audio ads, and the contest for engagement

Amazon will reportedly monetize its site and Alexa channels in 2018 using advertising. Global Web Index, a London-based research company, reports that grocery shoppers seem to love voice speakers. Of 78,000 respondents to a survey, 56 percent are using or plan to buy a speaker in the next six months. But will those consumers love advertising? That’s the important question for marketers considering how to deploy budget effectively.

Advertising isn’t the only customer interface in local. Human relationships, storefronts, out-of-home media, and many other investments are necessary. Adding advertising to an Alexa skill may backfire. As The Economist points out,  there is an uncanny valley problem with voice. When a smart speaker acts too human, the user can become uncomfortable. In short, consumer expectations are tightly linked to what they will tolerate comfortably when dealing with bots.

Adding advertising experience in a bot may violate the consumer’s expectations. Like streaming users, who feel they have paid for media out of their pocket and, consequently, do not welcome advertising, Alexa users are likely to object to the insertion of advertising. IBM Cloud Video found that 72.3 percent of streaming users “felt any type of ad reduced the viewing experience.” Alexa buyers have paid for a channel that promises to do tasks. Advertising remains an interruption to the consumer; it may be a mistake to impose in the smart speaker environment.

Marketers have seen an explosion of channels, in addition to myriad new sales tools to use to distribute experience to the edge of the network. Why revert to advertising, except to create more revenue for the smart speaker vendor? It does not necessarily add to the customer experience. In the local market, in particular, voice ads fail to replace the human connection consumers expect from a device/service they purchased. Perhaps the better move is to augment local salespeople using AI, instead.

The smartest speaker will know when to connect a potential customer to the human who can close the deal and build trust.

Experiential marketing will reach the home

AdWeek’s Sarah Priestman offers this assessment of experiential marketing:

The experience economy is booming, brands are seeking real-world impact, the creative industries are putting dollars behind new capabilities—really, what more do we need to do but let the good times roll?

Priestman goes on to emphasize the experimental and artistic qualities of experiential marketing, urging marketers not to think of this new style as a channel. “For lack of a better definition,” she writes, “experiential is the art of ‘expressing a brand’s purpose and proposition through a form of real-world consumer interaction.'”

Several trends are converging that raise the experiential challenge to the level of a revolution: Mass marketing is dying, turning to highly segmented experience that increases interaction and data gathering that produce better product design, improved inventory management, and a “pull” relationship with customers; On-demand business is driving experience down to Main Street and the consumer’s home; Communication technology is fragmenting as new channels open, each supporting a different experiential engagement.

Priestman rightly focuses on the roles of the brand strategist and producers in current experiential work, but this is a prelude to the delivery of experience in the home. Where experiential marketing today tends to happen at parties and events, such as a Bonnaroo or extreme sports event and brand events presented in urban cores, the future of marketing is personal and in-home. We need an interface at the local level to support this potential form of customer intimacy, and it is made of people.