BATTLE OF THE TITANS: AMAZON ECHO VS. GOOGLE HOME (AND DON’T FORGET ABOUT APPLE)
The newest battleground for the tech giants is being fought over smart home devices. Amazon’s Echo was the first to hit the market in 2014; the smart speaker responds to voice commands and serves an ever-growing range of purposes, such as music streaming, news updates, Internet searches for information, grocery lists, joke telling, takeout orders from local restaurants, and answers to general questions. Furthermore, in homes with other smart features, Echo and its voice personification Alexa allow users to control compatible lights, fans, thermostats, garage doors, sprinklers, and locks with simple voice commands. By 2017, Alexa even gained the ability to call or send texts to the contacts in users’ linked smartphones through Echo.
Google’s competing Google Home device did not even hit the shelves until April 2017.67 In some ways, Google Home is more advanced and “smarter” than Echo. For example, its web browsing capabilities are more advanced because it relies on Google’s stellar search engine, whereas Echo is limited to Wikipedia and Bing. Google Home also can sync its audio playback with other devices and Google Cast speakers, providing better playback and the option to insert linked devices throughout the house, such that even customers with big homes can engage in constant interactions with the central device. If a user moves from the downstairs family room, where a Google Home device is playing music, to the upstairs bedroom, as long as there is another device there those elements sync and the user does not miss a beat of the song. Amazon’s Echo does not have such a capability.
Overall, though, the two devices have similar functionalities, with some notable differences in the quality of the services they provide. Perhaps the biggest difference is how “smart” the devices really are when it comes to responding to users’ requests. In a study conducted by the digital agency 360i, Google Home was six times more likely to answer requests Page 205correctly than was Echo. In this study, the researchers asked each device a series of 3,000 questions. Although they did not publish the questions they asked, the superiority of Google Home likely stems from Google’s access to its advanced search engine. In addition, Google Home recognizes more colloquial command words. For example, if a consumer asks Google Home what movies are playing at the nearby theater, then asks how long it will take to get “there,” Google Home understands that “there” refers to the theater, whereas Echo would need the user to cite the specific theater name or location.
Yet in other areas, Amazon’s device takes the lead. Echo is compatible with more smart devices, including about a half a dozen other smart home devices, whereas Google Home is compatible with only three. Regardless of which brand of smart device people use in their homes to control things like lights or appliances, they thus can likely use Echo to help control those operations. Furthermore, when it comes to e-commerce, Google cannot come close to comparing with Amazon for product searches or purchases. The vast customer insights maintained by Amazon help it power Echo, such that it is much better at enabling consumers to search for, find, and purchase the precise products they want at the very moment they realize they need something.
With its earlier entrance, Amazon also has a leg up on the market already; Echo dominates, with an approximately 70 percent market share. Among people who already use voice assistants—such as Siri on their iPhones or Cortana on their personal computers—the three-year head start on Echo means that they likely have already made their purchase, and they are no longer in the market that might be served by Google Home. Moreover, almost half of all U.S. consumers do not currently use voice assistants and these customers do not seem interested in buying one for their homes.
Another hurdle in the market stems from customers’ privacy concerns. Such smart devices are always on and listening for commands. Some customers are uneasy with the presence of a device that is always listening to them. Although the companies offer assurances that customers are not being recorded if they are not directly giving commands, and it is possible to disable the microphone and delete past commands, customers remain wary.
As the first to market, Amazon was able to set the price level for this type of device. Echo currently costs about $180. When Google entered, it priced Google Home at $130.75 However, Amazon also has released a smaller, cheaper version, Echo Dot, that costs only $50. This new device was a huge hit on Amazon’s most recent Prime Day, sold at a special price of $35, which made it the top selling item on Amazon that day.76 In response, Google cut the cost of Google Home to $100.77
Even as this seeming head-to-head competition persists and intensifies, some other tech companies are starting to venture onto the battlefield. Apple introduced its smart speaker Page 206home device, HomePod, in January 2018.78 Along with the functions provided by Google Home and Echo, Apple’s entry features a special focus on music and sound quality. Even its name is evocative of the revolutionary iPod, which changed the way people listen to music. Priced around $349, it is the most expensive option. But for devoted Apple customers, a high price tag rarely turns the tide.
1. Trace how you might go through the steps in the consumer decision process if you were thinking of buying a smart home device.
2. Identify the four determinant attributes that set apart the Amazon, Google, and Apple smart home devices. Use those attributes to develop a compensatory purchasing model similar to the one in Exhibit 6.2. Based on your importance and performance ratings, which product would you buy?
3.Which device features examined in this chapter might have the greatest impact on consumers’ propensity to buy one of these products?
4.Which risk factors might impact consumers’ propensity to buy one of these products?
5.After purchasing one of these products, why might you experience postpurchase cognitive dissonance? What might the seller do to help you resolve this dissonance?