The market of voice-enabled speakers is expanding fast. In one year time multiplied its amount of users by 128.9%, towards an already stunning amount of 35.6 million user only in the United States. Amazon seems to benefit of its first mover strategy with a 70.6% market share, but competitors come slowly to the surface (eMarketer, 2017). Strategy Analytics identified four competitors that are expected to dominate the market; Amazon, Google, Apple and Baidu (Watkins & Branca, 2017). But what will be the industry winning strategy?

Let us first evaluate what the four roles within the platform, as determined by Eisenmann, Parker and Van Alstyne (2009), entail. The platform sponsors are the owners of the voice-enabled speaker platforms. We can identify the platform providers as the virtual personal assistants of each platform as these are the main point of contact of the users and combine both demand and supply. The supply side is established by developers and manufacturers of both the hardware and software extensions that provides the user with the desired options that attract them. And finally is the demand side occupied with the consumers that will buy the voice-enabled speakers.

To this day we can see that all main competitors are following similar strategies of openness. They all closed the platform sponsor and provider role to optimize their virtual personal assistants, but they opened up the demand and supply sides completely. Cross-side network effects are already in play as third parties are manufacturing and building software that attract end-users, and the amount of end-users will in return attract even more third parties.

But can the big four competitors rely on the quality of their own virtual assistant to sustain interaction levels. Or should Google, Apple or Baidu already rethink their strategy to surpass Amazon and become the new dominant market leader?

eMarketer (2017) Alexa, Say What?! Voice-Enabled Speaker Usage to Grow Nearly 130% This Year, Reviewed in: https://www.emarketer.com/Article/Alexa-Say-What-Voice-Enabled-Speaker-Usage-Grow-Nearly-130-This-Year/1015812.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2009) Opening Platforms: How, When and Why? in Platforms, Markets and Innovation, Gawer, A. (ed.), Northampton, MA: Edward Elgar, 131-162.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2006. Strategies for Two-Sided Markets. Harvard Business Review 84(10) 92-101.

Watkins, D., Branca, J. (2017) Smart Speakers: Sales Head towards 24 Million in 2017 Despite Confusing Array of Choice says Strategy Analytics. Reviewed in: https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2017/10/12/smart-speakers-sales-head-towards-24-million-in-2017-despite-confusing-array-of-choice-says-strategy-analytics#.WeT_ojAXrIV.

On October third 2017, Amazon announced that they acquired a New-York based start-up called Body Labs. Amazon refused to comment on why it was willing to pay a sales price between $50 and $70 million dollar for this acquisition. And to add to the mystery, it became no longer possible to enter the website of Body Labs. What we do know, is that Body Labs is a company that is specialized in making artificial intelligence software that captures both the body shape and motion in 3D. Body Labs pointed out that this technology can be used as software within the gaming industry, however it’s likely that Amazon is aiming at a different market with their presence in fashion (Hartmans, 2017).

In 2012 made Amazon its first move into this market as it started off with advertisement in fashion. Soon became the fashion industry critical in their ambition to surpass the $200 billion in sales (Siegel, 2016) and nowadays it even lead to the statement that Amazon wants to be ‘the best place to buy fashion online’ as a platform. (Fumo, 2017). Many expect that this reveals the true purpose behind the acquisition of Body Labs (Hartmans, 2017).

Amazon could use the technology to enable customers to try on clothes in a virtual environment and in addition provide them with tailored recommendations based on their body types. These enhancements can give customers an in-store experience and lets them make decisions based on better information.  These technological enhancements could lead to a diminished amount of return shipments, and might even establish a growth within the online fashion market as the easiness of shopping will increase.

If Amazon is indeed planning to implement the AI technology for online fashion, it will be interesting to see what the impact is. To what extend will the traditional stores become abundant and will this technological change indeed disrupt the fashion industry?

Hartmans, A. (2017) Amazon just bought a startup that makes 3D scans of your body. Retrieved from: http://www.businessinsider.com/amazon-body-labs-3d-body-scanning-startup-2017-10?international=true&r=US&IR=T

Siegel, R. (2016) Decoding Amazon’s Fashion Ambitions. Retrieved from: https://www.businessoffashion.com/articles/fashion-tech/decoding-amazons-fashion-ambitions

Fumo, N. (2017) Amazon dominates every market it touches — now it’s coming for fashion. Retrieved from: https://www.theverge.com/2017/5/24/15685250/amazon-fashion-conquer-dwyane-wade-store.