Amazon wants Alexa to finish your to-do list, not just research it

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Megan McCarty-Corino (1:05)

Have you talked with Alexa in a while? She's different. From American Public Media, this is Marketplace Tech. I'm Megan McCarty Carino.

The AI smart speaker market is getting crowded. This year, Amazon, which is a Marketplace underwriter, rolled out a large language model-powered version of its classic voice assistant. You can still talk to Alexa Plus using Amazon Echo devices, but it also operates as a text chat bot, replacing the old Rufus AI.

It's capable of conversational searches, managing to-do lists, and even generating podcasts. Daniel Rausch broke down what's new with Alexa Plus. He's vice president of Amazon's Alexa and Echo.

Daniel Rausch (1:58)

You know, I always wanted to be able to plan a great date night out with my wife, say, with Alexa, and have her take care of coordinating calendars and then finding a restaurant and maybe buying some concert tickets, etc. So, in the age of generative AI, you have this truly conversational interaction with Alexa. She elegantly introduces options. She'll pick a restaurant for me through open tables, set up a reservation, find me concert tickets on Ticketmaster, actually get all the way to done buying them, not just help me with the research part, but actually complete the task. So, you know, there's an expansive set of new things. And those are just a few examples that we see customers being delighted by, frankly, being surprised by and delighted by, because there's just so much more Alexa can do.

Megan McCarty-Corino (2:41)

It kind of seems like every tech company is pitching itself now as like, we're your AI assistant. Obviously, Amazon has been at this game longer than many of them, but like why choose Amazon for that kind of full service AI assistant experience?

Daniel Rausch (2:57)

I think that, you know, unlike other chatbots, Alexa helps you get all the way to done. Name a popular browser-based chatbot. You can do product research and then also not shop. You can plan a date light, but also not book a table or find tickets to the concert, as I was just mentioning, or put it on your calendar.

I think the, you know, the story of an assistant, they're valuable when they help truly simplify something and truly get you all the way to done. And I think that's really what we aspire to with Alexa, getting something all the way to done, not just helping you with part of a task and then giving the work back to you.

Megan McCarty-Corino (3:32)

Tell me more about kind of the business case for Alexa and Echo Devices.

A few years ago, the Wall Street Journal reported that devices had been losing a significant amount of money for many years. And if there's one thing we know about AI, which is being provided at large scale in terms of the training and deployment of AIs, that it's very expensive. So how does monetization come in here? Because this is free to use for Prime members, right?

Daniel Rausch (4:07)

That's right. And I think that, you know, you just referred to, I think, the first part of the important aspects of the business case. You know, the first thing is Prime. And it's been true with the Prime program since the beginning. Although it started as a shipping benefit, you know, we've continued to put more and more value into Prime, and it creates, you know, what we call the flywheel of Prime.

And that flywheel is based on putting more value in. Customers find it more valuable. They sign up for it more, and they use the benefits more, and they stick to it better. And, you know, I think the value perceived by customers with Alexa is already reflected in the early data that we see. So, you know, it was a key strategic decision to put Alexa Plus as a benefit into Prime. We see 25% lift on Prime signups once a customer has tried Alexa Plus. So, when you use Alexa Plus to shop, we see a 40% bigger basket size at the end of it.