Will Smart Speakers Be Replaced by Smart Displays?

It appears the smart speaker market has matured. After a years-long steady rocketship-rise in ownership, the number of Americans who say they own a smart speaker has started to level off in recent months. To be fair, the number is healthy, with over 1 in 3 Americans saying they own an Amazon Echo, a Google Home device, or something similar.

The most popular smart speaker maker appears to be Amazon, followed by Google and then Apple.

Consumers ages 35-54 own smart speakers at the highest rate, but future sales look like they will be primarily driven by Gen Z. Eighteen percent say they “intend” to purchase a smart speaker in the future, which is more than double those in the 25-54 age bracket, and triple those 55+. 

Income levels tell an expected story, with those in the $100K+ arena owning smart speakers at nearly double the rate of households making under $50K. One interesting takeaway, however, is only 7% of those under $50K say they intend to purchase a smart speaker. While this level of intent is higher than what we see in other income brackets, the difference isn’t remarkable. In fact, with entry-level smart speakers now routinely priced under $20, it is almost surprising the difference isn’t greater.

So who are the owners of smart speakers and who are the intenders? Here’s a peek.

People who say they enjoy cooking own smart speakers at a higher rate than those who don’t enjoy cooking (a difference of 7 percentage points). Perhaps Alexa is being used as a sous chef for this group of Americans.

Here’s a number that is striking: People who are deeply passionate about music own smart speakers at a higher rate than non-passionate music fans. But the intent-to-buy numbers among these passionate music fans? It’s at 16%, which is more than triple the percentage of people who say music is “important” to them and at five times the rate of people who couldn’t care less about music. Clearly, young music fans should be targeted, and targeted heavily.

Here’s something that makes perfect sense: The closer someone follows tech, the more likely they are to own a smart speaker. Notable, however, is the 27% of smart speaker owners who don’t follow tech trends. 

Looking at correlations with shopping habits, Americans who say they do the bulk of their grocery shopping at membership clubs, like Costco or Sam’s Club, or specialty stores and co-ops are the most interested in buying a smart speaker in the future. People who regularly buy from local or large grocers fall significantly behind in intent as well as ownership.

Another area of growth? People who have trouble keeping money in their pockets. Eight percent of people who report having difficulty controlling their spending say they are interested in purchasing a smart speaker. Notably,  40% of spendthrifts are already owners.

But while smart speaker growth shows signs of slowing, next generation devices such as smart displays – like the Amazon Echo Show and Google Home Hub – are starting to show signs of spiking. CivicScience tracking shows ownership has nearly doubled since Q4 2018.

One potential issue for these devices, however, is that intent has not matched ownership. In fact, people who haven’t heard of these devices outpace current intenders by a 4-to-1 margin.

Among owners of these devices, a few trends pop out. First up, people who own smart displays also own smart speakers at a near-90% clip. Clearly, these devices – which include smart screens – are seen as the next-step-up for current smart speaker owners. 

As far as age and income go, the younger and wealthier someone is, the more likely they are to already own a smart display device. Ownership really takes a dive in the 55+ crowd. One notable takeaway, however: In the $100K household income bracket, nearly a quarter of people already own a smart display device, more than double the amount of under $50K households. But intent to purchase – at 5% – is the same across all income brackets.

Overall, it would seem smart speaker ownership is starting to plateau, while smart display ownership hasn’t yet caught fire. More consumer education is clearly needed for the latter, and a push toward younger music fans seem to be the clear path to future sales for the former.