In 2017, smart speakers sat on the counter-tops and coffee tables of just over 30% of U.S. consumers. Today, that number has jumped to nearly half according to our 2020 ThinkNow Voice-Controlled Products report brief, which is on par with earlier predictions that 55% of homes will have smart speakers by 2022. The most popular speakers, Amazon Alexa and Google Home, dwarf category competitors like Apple Homepod. But Amazon is the clear front-runner with its Alexa and Echo products serving multiple niches within the market. Download the full study here.
As important as knowing who is leading the market is understanding who is driving the market. Households with smart speakers, on average, earn over $80,000 a year, while those without smart speakers make just under $40,000 annually.
There are many contributing factors to this gap, from internet access to privacy concerns. In response, the major players have enabled enhanced security features like the ability to opt-out of sharing data with the companies, muting the speakers, and deleting recordings. To address affordability, Amazon, for example, introduced a less expensive version of Alexa, the Echo Dot, which retails for just $29 - $49. Similarly, Google Home’s Mini retails for $29 - $39.
Another factor impacting the adoption of smart speakers is youth. In 2017, smart speakers were most popular among younger consumers, and that trend continues in 2020, driven primarily by Millennials, followed closely by Gen Z. Sixty-two percent of Millennials have a voice-controlled product in their home, and 55% of Gen Z have smart speakers in their homes. Lowest adoption is among Baby Boomers.
By ethnicity, Asian Americans report the highest use of voice-technology, while Hispanics, uncharacteristically, are least likely to have smart speakers in their homes. The Hispanic population is generally younger than the Total Market and is often defined by their robust online media habits. Considered “always connected,” Hispanics typically over-index on digital activities like social media and mobile phone use, and are generally receptive to online ads that are culturally relevant.
Interestingly, as in the 2017 smart speaker report, multicultural groups, in general, expressed more interest in smart speakers compared to Non-Hispanic Whites.
Connected consumers use smart speakers for a variety of reasons, chief among them is streaming music. The least likely use of those surveyed is “checking traffic.” Women over-index on a couple of categories, including checking the weather forecast and setting reminders and alarms.
Three out of ten consumers are planning to purchase a smart speaker in the next 12 months, with purchase intent highest among men, Millennials, and African Americans. But the opportunity is even greater than that. With only half of consumers using smart speakers in their homes, companies with smart speaker products have a substantial addressable market. The key to success here, however, will be understanding who those consumers are and developing a marketing strategy that“speaks” to their needs, including utility, privacy, and cultural relevance.