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As of last night, Alexa now has 10,000 skills. As exciting a milestone as this may be, even Alexa isn’t immune to the challenges that come with exceptional growth. Questions around the monetization and user retention rates have been top of mind in recent months, and easing these concerns means reflecting on why these 10,000 skills were created in the first place.
People are convinced that any emerging technology — from voice-activated lights to talking trash cans — will make their everyday lives easier, or at least more entertaining. But just because the technology is finally here, and people have identified 10,000 different reasons for voice-activated apps, doesn’t mean the apps’ impact will linger much past their launch day. At the moment, the everyday value of emerging technology is lacking across the board, and the success of any new Skill, chatbot, or IoT device depends on its ability to become indispensable.
Long live Alexa skills
As soon as people get wind of a new skill that can close a garage with a voice command from anywhere in the world, it’s downloaded. But the fact of the matter is, after just two weeks these skills have a retention rate of 3 percent. That’s because the moment these apps misunderstand you, or fail to provide value superior to regular apps, they become irrelevant. While I can ask Alexa to open my garage door, I can also click the built-in button on my car sun-visor for the exact same result. Because both systems easily open my garage, even a 95 percent success rate with Alexa won’t cut it.
But bearing these challenges in mind, IoT apps from banks or insurance providers have a big opportunity to streamline everyday hassles. Capital One is heading in the right direction. In March 2016, Capital One launched an Alexa integration that allows customers to check their account balance, pay their bills, and review recent transactions. This quick access to important information is the key to user retention (and potentially monetization), and it’s time that more service providers get on board.
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The future of the chatbot
Chatbots are another tech advancement with a big opportunity to provide real value. Unfortunately, most of today’s chatbots leave much to be desired, offering broken conversations with insufficient information. For chatbots to stay relevant, they have to both understand what you’re saying and answer a wide range of questions more quickly than the DIY approach. The ability to ask a CNN chatbot about today’s headlines is cool, but its value stops there. It’s easier and more informative to open up the CNN mobile app and look through the stories yourself. The chatbots that fail to uplevel mobile search that will struggle, but technology is maturing to prevent this from happening.
Imagine if an app could locate stores having sales, report long lines in different locations, or determine whether an item is in stock. This functionality is getting better every day and will save consumers significant amounts of time and money. For a chatbot to meet user expectations, it needs to be able to answer myriad requests, anticipating what users might ask or need next. Make sure your chatbot can handle rich conversations and doesn’t just translate to menu-driven conversations (which is sadly the case for most chatbots). If a user needs to remember what they can and can’t ask, the technology is unlikely to catch on.
Connected devices with untapped potential
CES this year was full of hi-tech gadgets, but most of them will perish as quickly as they appeared. I got myself a SkyBell video doorbell about a year ago. I was able to see who was outside my house from anywhere in the world, but it took about a minute and half to ring. Whoever was at the door could use the normal doorbell and be admitted in a matter of seconds, no thanks to IoT. As much as I wanted this cool gadget to be worth the money, its hype outshone its value.
Too often, connected devices make use of sensors and voice recognition just to pique the interest of tech-savvy consumers — those who jump at the opportunity to own a connected toaster for the price of a lifetime supply of bread. But as soon as you forget to toast bread via voice command, that functionality becomes useless, and it’s no longer a household staple. Unless they demonstrate everyday value, not even the most tech-savvy consumers will carry these devices into the next generation.
Ultimately, products that address specific industry pain points will emerge as leaders. Two areas where I see the most potential are in home security and health care. Companies like Nest have found a sweet spot: high-quality surveillance technology to provide the security of knowing your home is safe. Nest’s value is indisputable, and this will drive its success.
In the health care industry, the value in connected medical devices is clear, and in many cases it’s even life-changing. In such a heavily regulated market, broad adoption may take time, but connected glucose pumps, heartbeat monitors, and such devices offer true value, and their quality is maturing each day. Notably, a winning product at CES this year was the Willow connected breast pump. This is the type of connected device that will last. It addresses a common pain point and offers a practical solution that’s well worth the money.
As emerging technology shifts to address daily pain points more efficiently than old-school tactics, concerns around user retention (and eventually ROI) will fade away. It’s these hurdles that will separate a long-lasting, life-changing gadget from the attention-grabbing toys that flood our news feeds one day and disappear the next. The market is changing, and simplicity and quality are what will power the most valuable skills, chatbots, and IoT devices to hit the market.
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