The Effect of Voice AI on Digital Commerce

Senior Consultant Anindya Ghose co-authored a paper examining voice AI's impact on e-commerce.

The views expressed in this paper are the sole responsibility of the authors and cannot be attributed to Compass Lexecon or any other parties.

Abstract

Voice-activated shopping assistants (voice AI), such as Amazon Alexa or Alibaba Tmall Genie, have been gaining popularity worldwide as a new channel for online shopping. In this paper, we use large-scale archival data of consumer-level purchase records from Alibaba, the world’s largest e-commerce platform, to empirically investigate how consumers’ adoption of Tmall Genie affects their consumption. The results show that the average consumer’s weekly spending on Alibaba increased by 16.6% within the first four months after adopting voice AI. Additionally, we explore specific product features that moderate the effect of Genie adoption by examining the repeat purchase, product substitutability and familiarity, supporting a mechanism that involves reducing information acquisition costs. The positive effects of Genie adoption remain significant on repeat purchase in the long term although they attenuate over time. Furthermore, our analyses reveal that on average, the voice channel has a positive spillover effect on spending on the PC channel but no significant effect on the mobile channel. The channel dynamics are contingent on specific shopping contexts. Our results demonstrate that voice AI devices with shopping capabilities can enhance the growth of the affiliated e-commerce platform. As the first study to empirically examine the impact of voice AI adoption on e-commerce consumption, our paper provides valuable implications for e-commerce platforms and retailers leveraging voice-activated shopping.