What we are thinking about

 

Before the holidays, we saw big moves by both Google and Amazon to win over the consumer ahead of their holiday shopping.  Google announced their developer program, with 37 third-party Actions, and Amazon did a major single day sale for the Echo and Echo Dot.

According to a recent study by market research firm InfoScout, “Voice products like Amazon Echo will have a breakthrough holiday season.” VoiceLabs was watching our large network of Echo, Home and Dot owners to see which marketing, pricing and product strategies were going to win out ahead of the big unveil on Christmas day, when most of these devices would be gifted, activated, and used.

While Santa was taking a break on the 26th, VoiceLabs was crunching numbers to understand the impact that millions of activations of voice-first devices would have on the developer community. The data didn’t disappoint, and we’re excited to share what we’ve found, in partnership with our friends at InfoScout.

Both Google and Amazon sold millions of devices, and we are officially in an arms race

 

Before we share the impact on the developer community, let’s take a look at how many Amazon Echos were sold around the holiday season. Keep in mind that Amazon publicly mentioned selling 1M Echos last holiday season, totaling over 5M Echos sold as of December 27th, 2015.

Based on new data from InfoScout’s purchase panel, this holiday season saw one of the biggest jumps in terms of units sold, which equates to a LOT more Echo’s in the wild.

 

Amazon Echo Sales Growth

Source: Primary research from InfoScout and VoiceLabs

 

We compared the growth of Echo sales in 2016 to units shipped in Q1 2016, and uncovered key insights about the past nine months.

  1. Prime Day worked. Prime Day juiced Echo sales and kick-started an Alexa footprint to build momentum. Prime Day sales alone was equal to 60 days of echo sales leading up to it.
  2. Amazon built on Prime Day momentum to get aggressive on Black Friday and Cyber Monday.  Amazon capitalized on consumer awareness of the Echo, built in the back half of 2016, to make Echo’s and Dot’s the perfect holiday gift — and incentivized consumers to make the purchase.
  3. Amazon’s Echo and Dot consumer momentum crescendoed right at Christmas. It was not random that Amazon re-released the Echo Dot in November, lowering the barrier to bring Alexa into your home.  The holiday month sales saw a 300% purchase increase over the prior month.
  4. Amazon’s Out-of-Stock issue looks to be a big deal. Despite still having Echo and Dot’s available in retail stores, Amazon sales in December look to take a hit, starting on the 13th of December. Not surprising, since consumers will wait, until the device can be delivered, to purchase.

We also saw a spike in Google Home activations and usage, but the numbers are still too small to publish – more to come in VoiceLabs’ Q1 report. See below for the Google Home data we are ready to publish.

The 2016 Holiday Season was a huge win for Voice developers

With hundreds of developers using VoiceLabs’ VoiceInsight product across both Google and Amazon platforms, VoiceLabs has a unique vantage point for the Google-Amazon holiday sales battle.

VoiceLabs is happy to say that this holiday season was a huge win for voice developers. Here’s what VoiceLabs saw in new user activations of third-party voice applications for both Amazon Alexa and Google Home:

 

Amazon Echo and Google Home usage growth

Amazon Echo and Google Home usage Growth, provided by VoiceLabs

Source: VoiceLabs

VoiceLabs watched the number of new Google Home users quadruple from December 24th to December 26th.  We started to see growth in mid-December. After talking to our developer partners, we realized both Google and Amazon started promoting third-party functionality ahead of the holidays more prominently, leading to that initial surge.  

Google and Amazon had their sights on the holiday season and wanted to:

  1. Showcase the diversity of capabilities to potential last-minute buyers.
  2. Get their voice app stores humming for activations on Christmas Day.

VoiceLabs previously tracked the effect of getting promoted on these platforms (more to come in a later post), and without a doubt there was an increase in device activations over Christmas.

The increased pace at which new users registered on Christmas Day and the 26th indicates that a lot of the consumers who got these devices under their tree activated them that day! It is clear that both Google Home and Amazon Echo are not shelf-ware — they are products that consumers can’t wait to use.

It’s an incredible time to be building innovative applications on these voice-first platforms, and we encourage developers to check out the Alexa Skills Kit, and Actions for Google Home to get started. VoiceLabs is here to support them on this journey.

VoiceLabs predicts 2017 will be the year of Voice-first, and clearly we are about to start off with a bang.

We look forward to helping you grow, and build incredible experiences!