In November 2014 Amazon launched a speaker / voice command device to Amazon Prime members. Coming on the heels of the Amazon Fire Phone, which was widely considered a flop, people didn’t know what to expect of the intriguing new Echo.
The $179 speaker itself is a cylinder about 9” tall. It is unique in that it is much more than a speaker. It has a microphone array, and uses natural language processing to understand people talking to it from across the room.
Up until the Echo, most speakers, Bluetooth or connected to your network, were operated via the phone as a remote control (the Sonos app as an example). Echo changed the paradigm by allowing you to say what you want to hear. To operate the device you use the keyword “Alexa…” For example, “Alexa, play Jimmy Buffett”.
Beyond that, the Echo will answer questions like “Who is winning the Yankees game” and she will respond “The Yankees are winning 19-2, again.”
Alexa will give you news, weather, add items to your shopping list, connect with IoT things like WeMo, or tell you a joke (my six-year olds favorite feature).
Prior to Amazon entering the speaker space in a meaningful way the segment was very competitive, with Bose leading the way with 12.4% dollar share in 2014 followed by Sonos at 8.4% and Logitech at 5.5%.
As customers started using the device, and as it became widely available in 2015, an inflection point was hit and the speaker market was forever changed.
The Echo has over 30,000 reviews, averaging 4.5 stars. Compare this to the Sonos Play:1, which is competitively priced with the Echo and also has 4.5 stars. It has 2,000 reviews.
The Echo was so popular during this past holiday that it was sold out as of mid-December, meaning its sales performance could have been even higher as some consumers chose to spend their shopping dollars elsewhere.
In 2015, Amazon accounted for 25.9% of all speaker sales online. The brand behemoth is even expanding its channel presence as you can know but it at other retailers like Home Depot, B&H, Fry’s, and Sears.
It appears Amazon’s disruption of the speaker market, and mainstreaming of the home automation market is just beginning. It was just announced that Amazon plans on releasing a smaller version of the Echo in the 1st quarter of this year.
1010data’s Ecom Insights panel consists of millions of online shoppers in the U.S. who allow 1010data to anonymously track their online behavior for market research purposes, including e-commerce activity.
1010data applies advanced, proprietary statistical modeling, machine learning, and data science techniques to ensure that its panel is representative of the Internet Browsing Population in the U.S. and suitable to extrapolate observations to the broader population.
Retailers measured include the top 100 online mass retailers in the United States that – according to 1010data’s estimates – make up over 95% of hard line goods ordered online Total Spent.