Alexa, Why Are You Still Here?

Amazon is good at selling smart speakers but is struggling to keep users engaged.

- By Priya Anand

Each holiday season since 2015, Amazon.com Inc. has counted on selling a lot of its Alexa voice-controlled smart speakers. For almost as long, it’s known that the devices would have trouble holding customers’ attention even into January. According to internal data, there have been years when 15% to 25% of new Alexa users were no longer active in their second week with the device.

Concern about user retention and engagement comes up repeatedly in internal planning documents that Bloomberg Businessweek viewed. The documents, which covered 2018 to 2021, detail Amazon’s continued ambitions for Alexa, including plans to add more cameras and sensors that would allow the devices to recognize different voices or determine which rooms users are in during each interaction. They also reveal the roadblocks the company sees to realizing these goals. Last year, Amazon’s internal analysis of the smart speaker market determined that it had “passed its growth phase” and estimated that it would expand only 1.2% annually for the next several years.

The market for Alexa devices extends beyond just smart speakers, and Amazon disputes many of the metrics cited in the documents, saying they are either outdated or inaccurate. In an emailed statement, Amazon spokesperson Kinley Pearsall said the company was as optimistic about Alexa as it had ever been. “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,” she wrote.