Report: Amazon Alexa Has an Engagement Problem

Posted on December 23, 2021 by Paul Thurrott in Smart Home with 52 Comments

Internal Amazon documents viewed by Bloomberg show that the firm’s Alexa digital assistant has a serious engagement problem. That is, while Alexa-powered smart speakers and other devices typically sell very well during the holidays, usage drops off very quickly soon thereafter.

According to the report, which is based on documents covering the prior 6 year period, 15 to 25 percent of new Alexa users are no longer active just two weeks after receiving an Alexa-powered device. Worse, sales of Alexa-powered devices stopped growing in a meaningful way last year, with growth stalling at 1.2 percent annually. Alexa had “passed its growth phase,” the documentation notes.

That said, Amazon still has big ambitions for Alexa, which it plans to extend to more camera- and sensor-laden devices in the years ahead. And somewhat surprisingly, Alexa-powered devices with screens still perform well from an engagement perspective: the documentation claims that smart displays are used at least once a week by 74 percent of users, compared to 56 to 66 percent for Amazon’s smart speakers.

Amazon disputes the report.

“The assertion that Alexa growth is slowing is not accurate,” an Amazon representative told Bloomberg. “The fact is that Alexa continues to grow—we see increases in customer usage, and Alexa is used in more households around the world than ever before.” Amazon further claims that 25 percent of U.S. households have at least one Alexa-powered device, while the figure for Amazon Prime households is 27 percent.

A few more facts emerged in this report: Amazon loses $5 per Alexa-powered device on average but hopes to make $2 per device by 2028. It spent $4.2 billion on Alexa this year, and more than 10,000 Amazon employees work on this technology.

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Comments (52)

52 responses to “Report: Amazon Alexa Has an Engagement Problem”

  1. Daekar

    Not surprised at all. I have been to houses which are chock full of assistant devices (both Alexa and Google Assistant) but they never provided any functionality that my phone couldn't, and frequently the user experience was worse, sometimes far worse, than simply making a few taps on a phone. The utility isn't there, and the implementation is insufficient.

    It makes sense that screen devices would get more engagement, the screen is a superior interface and it's like a large phone always sitting there waiting. If you have a small phone, it is reasonable to think a larger screen would be worth having around.

    • William Clark

      Can't say as I agree. I have a condo and a home. Both have Alexa Echo devices and smart lights and switches, among other smart devices.

      It's far easier for me to say, Alexa, Turn on Kitchen Lights, than to pull out my phone and tap into Alexa. While I can do a lot, if not everything, on my phone it's not a convenient just being in my home and shouting out a command to Alexa.

      But, yes, the screen devices offer the most functionality, however, I recently pulled out my original Alexa Echo (no screen) and put it back into service. It's great for most of the stuff I do (voice commands, hearing notifications etc) and it's just one device in a semi-smart home.

      • Truffles

        Am I just too old to understand why anyone actually needs to use a voice assistant to turn on a kitchen light? After all, surely if someone wants the light on in the kitchen it's because they're going in to the kitchen while walking by the light switch? Or are we talking a house without any light switches??

        • beckoningeagle

          Teenagers and video games are enough of a reason. Dad!!! while you are up, can you turn on the air-conditioner, or turn off the light or stuff like that. Not having to tell them to do it themselves and the ensuing lectures, is a god sent! ha ha ha ha ha

        • Stabitha.Christie

          People with disabilities that limit their mobility get a considerable amount of value in being able to operation things like lights via voice assistance. I give a lengthier example below if you care to read it.

          Side note, this is why inclusion and diversity in hiring is important. People have a hard time imagining use cases beyond their own which leaves them with fairly large blind spots. It’s not that people are bad but simply limited by their own experience.

        • david.thunderbird

          Sooner than later you won't be able to get to that switch without a lot of wheezing. Says a not so young at 77...

        • jwpear

          You have a point on the light switch. It's marginally useful in many situations, but there are certainly times when hands are full and being able to turn it on/off by voice is better.

          We find Alexa faster and more useful than the traditional method of setting cook timers. It's much easier to tell Alexa to set a roast timer for 25 minutes than it is to fumble with the timer on most ovens we've owned. Same for using the phone. Even cooler, I can use my voice to set and name multiple timers all while prepping and cooking the meal. Alexa will tell me exactly which timer is done. That's a truly superior user experience.

          We also like using device groups to do multiple things at once. For example, I put all of our Christmas lights on WeMo plugs and then set up a device group in Alexa. It is far easier to tell Alexa to turn on/off Christmas than it is to go around and switch on/off each item. We used to use those switches with RF remotes, but someone would inevitably put the remote in their pocket or lose it in the couch.

          The classic is checking the weather forecast. Far easier than pulling it up on a phone or turning on the TV to find a weather channel.

          I think the user experience and overall engagement would be better if Amazon and other smart device makers would improve the speech engagement. I find the pause unnaturally long between the wake phrase and the command. I'd also like to give multiple commands without having to say the wake phrase every time. Supposedly this is possible, but I haven't found it to work as advertised.

  2. orbsitron

    We use our Echo Dots and Alexa on Sonos daily. Music, lights, timers, weather, alarms, shopping list management, headlines... All used regularly in our house.

    When my kids see any speaker in anyone's house, they ask Alexa to play their favorite songs.

    It takes some setting up to get all the smart services hooked up and to set the Sonos groups as the default playback devices in the same rooms as the dots (for legacy Sonos), but the end result is that so many things are faster/easier with voice or only possible with voice when your hands are full with kiddos, diaper changes, groceries and cooking.

  3. Rob_Wade

    I've said this many, many times: NOBODY DOES ASSISTANTS RIGHT! Nobody. They are ALL garbage. They are TOYS. The closest anyone got was with Cortana. Cortana provided functionality that has NEVER been touched by other AIs. I don't need an assistant to answer my stupid questions about who holds the Guiness record for tallest person, what the capital of Zimbabwe is or to tell me a fricking joke. I need it to actually DO "assistant" things. Like announce incoming texts, phone calls, emails (preferably based on criteria I set), allow me to respond to them, control ANY controllable device in my home WITHOUT HAVING TO ADD A SPECIAL SKILL (that usually DOESN'T work....ahem, VIZIO)----and all without EVER TOUCHING A DEVICE. I should be able to use plain language, not special key words.

    If someone can actually accomplish this---and make it work completely device agnostic (UNLIKE smartphones today, which are almost entirely proprietary)---they might finally change my mind. I should NOT have to create a bunch of ITTT crap beyond plain language. Back when Windows Phones and Cortana actually were a thing, I could do more of that than ANYTHING can now. "The next time I'm at Walmart remind me to buy milk and cereal". That stuff worked great. Cortana would announce I have a text from my wife and then ask me if I wanted to reply. I never had to touch my device.

    I have two new Vizio TVs and one new TCL (Roku) TV. I can't even get Alexa to load up the Vizio skill, much less see either of the TV. And the TCL TV only SOMETIMES responds. Alexa is garbage, just like Bixby, Google and Siri are garbage. I want ONE AI that answers on ANY device with microphone and speakers, and controls ANY device that can reasonably be detected (whether that's wifi, bluetooth, wired-ethernet). There's no excuse for the garbage that's out there now. NONE.

  4. obarthelemy

    Assistant: F***s up every time you ask anything more difficult than setting a timer.

    Assistant Maker: "Booo, why don't people our Assistant for more than setting timers ???"

    Seriously, in my language (French - lots of homophones) simply dictating a text makes me look remedial. And gAssist can't handle when I confuse a song by Eurythmics with one by Annie Lennox...

  5. egab

    What do they want us to use it for?

    The games and web searches are just gimmicks. We do however use it daily for shopping lists (with the excellent "Anylist" app for ios/android), streaming music from Deezer, control devices such as lights, smart plugs, and Xbox. We use it to communicate between rooms ("dinner is ready" etc.) and for simple web query such as "What is the time in Paris" and "Convert 10lbs to kgs".

    I mean, what else are we supposed to do with that? What's Amazon's (or Google's/Apple's) goal?

    • palmpre

      You ask a good question. What to they expect Alexa to be really used for? Speaking is a lower bandwidth form of communication. We use it for things that would take too much time and energy to walk over to a screen to do.

      I'm probably a typical user who uses Alexa daily for timers and turning on/off lights in another room. But one thing that's in my daily cycle that I haven't seen positively mentioned is control of a home entertainment system. I took the time to setup a Logitech Harmony to control my TV, receiver, and Blu-ray player. An Amazon FireStick has since been added. With verbal commands, I can put my AV system in any mode from the kitchen. "Turn TV on" in preparation for a football game or "Turn on Blu-ray player" as I fill a bowl with popcorn for a movie. When we are seated on the sofa, lights are dimmed by Alexa commands. The whole setup beats pushing buttons on multiple remotes. Unfortunately, Logitech just recently decided to abandon the Harmony line of controls. CEO was mealy mouthed as to why over on TheVerge. Don't know if it was a sales problem or an Amazon problem. The setup always gets a "wow" when I show it off to guests.

      Makes me think that Amazon needs to support home automation more. Trouble is, Amazon doesn't make or profit from home automation.

  6. Patrick3D

    Love mine, used them since the 2nd generation released and continue to upgrade as each new model comes out. I have one on my desk and one by my bed, each the model with a clock built in. I stopped using my alarm clock and just use these. They are my primary device for listening to music and controlling smart bulbs/plugs. Use them every single day.

  7. JH_Radio

    I use mine mainly for checking spelling a and tips . I used to use it for music more but I wish you could do more with the inteegration of it.

    Like why can I add music to a playlist but not delete it even with using the amazon native music unlimited ?

    If I ask it where am I, why cant it give me the location ?

    These things seem to fall apart if they don't know the exact thing you're asking.

    I've never had any kinda smart lights or thermostat. I do use it for checking the weather with Big Sky.

  8. feek

    Holy shit, 10000 employees??? That’s the most surprising fact to me 😳

  9. red.radar

    If true and engagement with Alexa and digital assistants is low. Do we think the broader IOT sector is in similar situation? I know my homedepot is carrying less wireless enabled lightbulbs. Thermostats and security cameras still look popular though.

    • ontariopundit

      I think the IoT market is rapidly approaching saturation... and early adopters are now experiencing the first wave of disappointment and disillusionment.

      Google just announced that they are disabling their first wifi router. It's only six years old and still perfectly functional but they're ending support for it which means that you won't be able to add new devices to it (among many other things you won't be able to do).

      We will see Google and maybe Amazon do the same thing in the not so distant future when they decide to disable (end support for) the smart displays and thermostats in people's house

      I certainly won't be replacing my Nest with another Nest if that happens. Or a Google smart display with... yet another Google smart display! Or my Google Mesh Wifi with another of the same. When all of the aforementioned devices still work just fine.

      How does it go? Fool me once shame on you, ...

  10. Saarek

    Made the switch to HomePods the second they came out because I wanted privacy which you were guaranteed not to get on Alexa. Still, my usage case remained mainly the same. Turn on/off lights with voice commands, occasionally check the weather or change the heating.

    I use the HomePod a bit more because I play music through it and make the odd phone call or calendar reminder, but that's about it.

    • obarthelemy

      Is there any evidence desides PR (which is NOT evidence), that Apple collects, uses, rents or resells less data ? Last time I looked at their legalese page it was utterly noncommittal, and last time someone audited wht a phone (not speaker) sends home, Apple actually got types of data (though less in quantity).

      So, Apple = Privacy, they shout loudly. Does anything axtually support their PR ?

  11. beckoningeagle

    I have a Google Assistant and after completing the arduous task of configuring all smart home devices to interoperate with it, I use it to set kitchen timers.

  12. ontariopundit

    This report does not surprise me in the least. We have loads of Alexa and Google devices in the house. Neither are particularly well executed but Google ends up being used about ten to twenty times more often than Alexa even though they sit side by side and the 10" Alexa has a camera and a nicer screen and speaker than the 7" Google display. Alexa only really gets used if Google can't play music or radio

    Oh, and Alexa has a camera and a shopping list, both of which entertain my children but provide no utility.

    I forgot that Alexa has drop-in while Google only offers broadcast. But neither drop-in not broadcast work particularly well anyway.

    • ontariopundit

      I forgot timers. Alexa gets used if Google already has too many timers going to reasonably keep track of (coming). Overall Google is a much more useful assistant than Alexa but it still is a far cry from the utility of Siri when it first came out.

      I want my smart assistant to be an obedient secretary who talks as little as possible with a quality fact search engine... Which is not Google search! Apple's first incarnation of Siri was quite good. When they replaced Wolfram Alpha with Google things took a turn for the worse. I haven't used iPhones in many years so I don't know if Siri got better again.

  13. nbplopes

    It will take time.

    We use the HomePod daily … listen to music, control lights and shades, set reminders and timer ….

    But there is one person in the house that champions it use … me. The other learned from my interactions. Now everyone uses it …

    I can imagine households with no champion leading others in the use of these things … quickly becoming unused. Either because people don’t know what it can do, or it’s totally out of their flow … hence never remember to use it.

  14. worrach63

    I'm not surprised. I personally hate speaking to any of these devices. They usually don't understand correctly and even if they do what they return is usually of little use, other than maybe for entertainment purposes and that gets old quickly. I have both Alexa and Google but never used them. I've since unplugged both. I would much rather interact with a screen or keyboard than with voice.

  15. daniel7878

    My echoes are just music players. Rarely do I ever use them for anything else. But they are excellent music players. Being able to start an iheart or siriusXM channel is so stupidly easy. And I don't have to worry about casting from my phone.

  16. navarac

    After seeing in the new the last couple of days that an Alexa suggested a child insert a metal coin between the pins of an electrical plug, I wonder why ANYONE would need this s**t in their house.

  17. VancouverNinja

    This is exactly why Microsoft ditched Cortana Devices and the Band. Everything that we think is great today will be reinvented. Heck even development standards for smart devices are not done - which could make everything we have now to be repurchased/refreshed. There is a long way to go. The only device that has seriously been awesome, to me, has been my WHOOP. It is the real deal not like the rest of the inaccurate Dick Tracy watches out there.

  18. kd5hiy

    I am not surprised by this. My Alexa device is nothing but a music player now. I don't even talk to it.

  19. shark47

    I still use the Echo to play music and ask about the weather. Other than that, not much. That said, I wonder if these voice assistants aren't as big as we thought they'd be. Companies are forcing Siri, Alexa, Cortana etc. down our throats even if we're not interested in using them.

    People are obsessed with their screens, which is clear from the success of iPhones and Apple watches.

  20. wright_is

    My FireTV keeps telling me to use Alexa, likewise, whilst I still had them, our Fire Tablets kept telling us to activate Alexa.

    The same for our Android devices, they kept wanting us to activate the Google Assistant or Bixby. When I had my Nexus, I hadn’t deactivated it. After a few months, I went through the history and found, although I had used the Assistant twice, Google had stored over 100 sound snippets - most of them were just wind blowing or my boss in the next office over saying OK. I turned it off after that and never turned it back on.

    I did use Cortana a few times on my Windows Phone and I’ve used Siri a few times on my iPhone.

  21. jchampeau

    Maybe I'm the exception, but I use Alexa several times each day when I'm home. "Alexa, good morning" turns on several lights and plays the news update, for example. I often ask what the weather's like (sometimes in different cities if I've got travel coming up), and I listen to podcasts including First Ring Daily and Windows Weekly, and I occasionally play Jeopardy. That I don't have to pull the phone out of my pocket is a big plus for me. I also really like that they glow green/yellowish when a package has been delivered, so I know to go retrieve it.

    • William Clark

      Same here. I use Alexa all day, mainly for lights and thermostat control, but also for "guarding" the home while away. I have begun using it for more things like getting package delivery notifications as we use a local UPS store for that.

  22. crunchyfrog

    My Google speaker (Assistant) talks too much after I ask it a simple question so I often just avoid asking it much at all.

    I do use Alexa everyday but most of it is to set timers in the kitchen or I have routines that I use at night or in the morning to turn on or off lights and lock the front door. That's pretty much it.

    • William Clark

      I want them to be more interactive, like when I ask Alexa something, she tells me and I will often say, Thank you Alexa, which she doesn't respond to. I'd really like the conversation to be more natural, like saying, wow, Alexa, that's amazing, and she would respond, yes, I thought so too. Or maybe, Really, Alexa you don't know what that is? And she would say, Hey, I'm sorry, I can't know everything. Or something like that. Make it like you're actually talking to a person.

      • crunchyfrog

        Agreed. I think that this ability will present itself over time although I worry that it's all going to be exploited to give us more ads instead of truly interacting with us.

      • ontariopundit

        I'm not sure if you're being ironic.

        The desired behavior you describe is the behavior drives my whole family nuts. It's a machine. I don't want a conversation with an inanimate object. It does a task and I want it to do that task quickly, correctly and with a minimum of interruption.

        I don't need a long preamble. Just cut to the chase. I would like the ability to do follow up queries but not waste time on social pleasantries.

      • darkgrayknight

        I have had Alexa respond with You're Welcome.

  23. Donte

    We got one, for Christmas, 4-5 years ago, the tall tube one, from a family member. My kids played with it for about a week? It is in some closet where it has been for multiple years now.

    I bought the big Home Pod years ago now and we never really use Siri on it, but it does sound pretty dam good where its at in our basement entertainment area. Since we are Apple music subs, it's useful for asking it to play songs and that is about it.

  24. epsjrno

    I have stopped trying to use Asked for too much more than a timer or lightswitch. The verbal interface is horrible when trying to play specific albums and inconsistent when trying to watch movies.

    And for some reason, there is very little continuity with the OS/interface between the Cube, tablet, and Echo Shows. Don't even get me started on the touch interface used by the Show.

  25. JerryH

    I haven't used an Alexa device in years. We had two. They are powered down. But that was simply an ecosystem problem. We are one of those houses mentioned by an earlier poster with a lot of devices. We have 10 different Google devices around the house from a Nest Hub Max in the kitchen down to some classic Google Home devices, and even a few of the minis. They get used every day. A super common use is to play Windows Weekly or This Week in Google via YouTube on the Nest Hub Max. But they are also used for lighting control, thermostat control, etc. Once in a great while I might even tell Google "Play The Key of Awesome, a Tribute to Ridiculous Voices from YouTube on Family Room TV" and watch as the TV gets powered on, the YouTube app comes up, and the requested video plays. Could I do that from my phone? Absolutely. Would it be as fast? Heck no. Saying "Hey Google, turn off all the lights" as we walk out the door is likewise faster than tapping on the phone.

    Some people use these devices. Some don't.

  26. j5

    I think more details about user usage are needed to understand this more i.e. age, family, single, teens, kids types of use, etc. I have to tell one of my teenage sons to lower his Echo every night, sometimes I lower the volume or shut it off via the Alexa app smh, teens... We use our Echo in the kitchen a lot for timers, reminders (just set one today to remind me to replace the fridge water filter in 6 months) ask the weather in the morning when making coffee, we have a downstairs group that we regularly play music on. I just purchased an Echo to use as my Mac speaker/desktop speaker for music while working.

    I like that you see all your voice inquires to each Echo (yes creepy but that's another subject) and I'll see my kids asking school related questions; math problems, questions about subjects like what is the main export of Canada, etc, they'll ask what the weather is when getting ready for school, set their own reminders.

    Maybe we're a more than average tech usage household. But I feel that any home with Gen Z kids, the usage of tech, like smart speakers, is just normal stuff, like using a toaster or electric toothbrush, nothing special.

  27. pauldain

    I have several Echo devices through our home and use them mostly for increasingly mundane things: weather, home automation, music. Recently, however, I found them much more intrusive with proactive notifications that interrupt and speaking randomly when not invoked.

    As a comparison, I recently bought 2 Apple HomePod Minis that are paired in our living room. So far, I have found them much less intrusive while being able to respond more accurately to the things that I WANT to do. The iPhone and Watch integration is, as you'd expect, quite nice.

    While I do like the Echo devices with screens, if Apple came out with a smart screen device (thinking dumber iPad/Apple TV type thing), I'd probably go all in and ditch Amazon. *sigh*

    • Jeffsters

      In addition to my HomePods I use a few older iPads set to listen for “Hey…” attached to attractive powered stands. Run the always on WeatherCast HD app and honestly don’t see a need for anything else.

  28. LT1 Z51

    I don't use any of this stuff. Don't want it, think "personal assistants" are dumb. You want a personal assistant, hire a human to do it. Can't afford it, just get up and turn things on the old fashion way.

    I get people who live in massive homes (6000+ square feet) but really we can't get off the couch to turn on a light? Seriously?

    • Stabitha.Christie

      My father had a stroke which has left him with mobility limitations including being in a wheelchair. Having a voice assistant offered him a better quality of life while he still lived independently. He could operate his lights, ceiling fans, thermostat, coffee maker, door locks, make phone calls and send text messages all from his HomePod. For many people with disabilities hiring a person is cost prohibitive. To suggest that these people should get up and do it “the old fashion way” or are simply to lazy to get off the couch is fairly insulting. The reality is that voice assistance offer a fair number of people greater independence and a better quality of life.

  29. Davor Radman

    They are missing the biggest and most important stuff, and that is AUTOMATION. Nobody wants to actually have to interact with such a device, unless for very small number of things, like starting a music or such.

    Automation is far more useful, but unfortunately also much less interactive and less glamurous.

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