Trends & Insights - CES 2017: Pixels

TRENDS

& I N SI GHT S

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This year, Publicis Groupe’s CES experience went beyond the showroom floor to sharpen the infinite amount of pixels found on every screen and device showcased this year. We surfaced emerging technologies, platforms and connections that matter most to your businesses to achieve maximum resolution for 2017 and beyond.

CES 2017:

Pixels

Here is Publicis Media’s comprehensive recap of CES 2017. Read on for the full report or click on the links below to go directly to a topic. §

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Top Five Trends @ CES 2017 § Voice-Activated Personal Assistants Take Center Stage § From Internet of Things to Experience of Things § Smart Home eCommerce § Balancing Personalization & Privacy § VR: Focus on the Experience Business Transformation Predictor Study: Are Businesses Equipped to Innovate in the Face of Disruption Trends?

Publicis Media Voices Social Chatter

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Voice-Activated Personal Assistants Take Center Stage

Further convergence of the digital and physical worlds will power personalized experiences and this year, Amazon Alexa was the most buzzed-about topic in this space from the CES show floor. Amazon opened Alexa to all third-party devices in 2015, and the result was evident on the show floor with the Alexa badge displayed everywhere—in cars, TVs, speakers, home audio systems, refrigerators, personal robots and phones.

Voice-Activated Digital Assistants Are Even More Indispensable Meanwhile, voice-activated digital assistants have hit an inflection point, powered by recent advances in accuracy. According to the Consumer Technology Association, voice assistant accuracy has improved from a 23 percent error rate in 2013 to “human parity” today. Better experiences have driven massive demand. Amazon sold millions of Alexa devices over the 2016 holiday season, with Echo sales in particular, up nine times year on year. Voice is now replacing screens, as voice-activated digital assistant shipments are expected to double in 2017.

Amazon Paves the Way for IOT With Alexa’s recent success, Amazon may have taken the early lead as the “hub” for the Internet of Things. As most consumers aren’t interested in a piecemeal approach to connecting their homes, cars and the world around them, this is a key win for Amazon in the battle for IOT supremacy against rivals.

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From Internet of Things to Experience of Things

The Internet of Things (IoT) has always been focused on products and technologies. This year however, a major theme at CES has been the consumer experience—and interestingly, consumers don’t really care about the technology behind their products and services. They just care about getting things done, more efficiently. Their ask? For technology to be intuitive and to serve them. It shouldn’t interfere with consumers’ lives, as the frustration bar for bad tech is very low.

Machine Learning Powering Experiences Digital machines that are deeply integrated into people’s lives, like wearables and smart home devices, are doing a better job of not only collecting data, but using that data to add intelligence back into the system. These technologies make automatic decisions that optimize our homes to save energy, route our cars more efficiently, create more “mindful” spaces and give us more actionable recommendations to improve health.

Connected Data Provides Shared Learning Machine learning is also powering the “democratization” of industries like healthcare and self-driving cars. Take for instance, a car that learns something new, such as the location of a large pothole in the road, and then instantly informs other cars about the pothole. Wearables are also helping us make more smarter, collective healthcare decisions and the data collected by things like wearables will be as valuable as third-party data. All of this is invisible, blending into the background of our lives, but improving consumers’ Experience of Things (EoT).

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It’s now clear that the smart home may become the next boon for eCommerce, especially in verticals like household goods and food/beverage.

Smart Home eCommerce

Smart Home Devices: Tomorrow’s Shopper Connected home devices have set the stage for a new kind of online shopper—a shopper that allows smart home machines to order products on his/her behalf. Smart homes are expected to grow 63% in the U.S this year, according to the Consumer Technology Association. With the emergence and thirdparty connectivity of Alexa, we expect that more shoppers will use their smart home technologies to automatically buy things (take for example, a smart washing machine that can track laundry usage and order detergent via Amazon Dash when running low).

Brick & Mortar Further Disrupted This is truly transformative as many products that consumers generally buy in physical stores—such as detergent, milk, toilet paper, coffee–will now be bought online. Furthermore, with Alexa, Amazon has positioned itself as the point-of-sale for smart home eCommerce–and conceivably could soon deliver the items via drone. To avoid falling behind, household brands must consider where they fit into this potential new eCommerce ecosystem.

Samsung smart fridge

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Balancing Personalization & Privacy

The IoT creates a massive volume of new consumer data points. Data from “things,” including data associated with how people live their daily lives, can enable even more personalization, which, if done correctly, can not only empower consumers, but also drive performance for advertisers. As Mediavest | Spark’s Shelby Saville stated during a Publicis Groupe panel session titled Digital Transformation: This Time It’s Personal, “Keep it smart and simple. Don’t boil the ocean with personalization. Use the data well and know your consumer.”

Privacy Paramount for Consumers Despite the increase in adoption of the IoT, conversations at CES have also focused on how consumer concerns over data privacy exist more than ever. Privacy intrusion and hacking are real concerns for consumers as they welcome new Internet-connected things into their homes, cars, bodies and cities.

In fact, 90 percent of U.S. Gen Xers find it “creepy” when websites know information about them (Performics and Northwestern University’s Intent Lab Digital Satisfaction Index, Q4 2016).

Advanced Technology Requires Advanced Security For most of the products on the CES floor to scale, consumers must be comfortable from a privacy and trust standpoint. Consumers are asking, “Does the utility of this Internet-connected thing outweigh its potential threats?” Furthermore, as brands gain access to IOT data, the consumer experience will be put under a microscope like never before. Although not required by law, U.S. brands should consider policies like cookie-opt in, informational content around data collection policies and safe-site options (e.g. HTTPS) to increase user comfort around personal data collection.

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VR: Focus on the Experience

Virtual reality (VR) was on the tip of everyone’s tongue this year at CES and it goes without saying that it’s on the fast track to mainstream reality, evolving from niche executions into everyday life through gaming, commerce, social media, entertainment and more. In fact, Samsung announced during CES that more than 5 million Gear VR headsets have been sold and investments from top media companies, like Facebook, Time Inc, USA Today, The New York Times and others are setting the stage for consumer adaptation. 2016 was a watershed year for VR, but 2017 has even more to come, with a strong focus on VR content, making it engaging, relevant and authentic.

New Accessories Bring VR to Life While VR headsets were last year’s trend, this year’s CES show floor featured more accessories to enhance the VR experience. It was all about greater immersion with devices such as strap-on connected soles, gloves and finger trackers, as well as vests and blasters that enable consumers to use full body motion to more naturally interact within VR worlds. Additionally, wireless VR headset adapters are allowing VR enthusiasts to cut the cord from their PCs and walk around freely.

More Brands Building Virtual Consumer Experiences Beyond these innovations, VR is becoming more actionable for brands. Publicis Media clients and partners who visited our lounge were given a demo by Tiltshift where they could strap on a headset to build a new model Lexus (color, tires, accessories) and then step inside the car. This kind of technology takes the car dealership experience directly into people’s living rooms. Use cases for brands are many, including: • Travel: See and experience a plane seat before buying • Beauty: Virtually try on different products and experiment with looks • Home Brands: Build a kitchen, paint a wall or redesign a bathroom before going all in • Retail: Try on clothes or look inside a bag to see if it will fit all of your things

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Business Transformation Predictor Study: Are Businesses Equipped to Innovate in the Face of Disruption Trends?

At CES, Publicis Media launched its proprietary Business Transformation Predictor research, forecasting how businesses will transform amongst key disruption trends. The research canvassed the views of 1,799 consumers and 759 C-suite executives across seven countries.

Executive Question: To what extent do you feel that your business is currently meeting your customer’s expectations? % Agree Consumer Question: To what extent do you feel that companies and brands are innovating to meet customer expectations? % Agree

The Expectation Gap 86 percent of executives feel that they’re well equipped to innovate to meet rising consumer expectations. However, the research indicates that executives may be mistakenly assessing their capabilities. In some verticals, as little as 54 percent of consumers agreed that brands are innovating to meet their needs. It’s time for brands to ask themselves: “Is our innovation showing?”

Brand Response Executives and consumers do agree on the trends that will have the most disruptive power over the next five years—new payment methods, on-demand access to goods and services, seamless shopping and AI. Having incorporated tech-enabled change into their daily lives, consumers are disruption-savvy; brands should enroll them into their transformation efforts and journeys as cocreators.

Source: Publlicis Media Business Transformation Practice Research. November 2016.

Global Base Size: Consumers (1,799) : Executives (759) Average sample size by category: (51)

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“There’s no greater need than now “You have to ask if this innovation is genuinely useful. Unless the for us as marketers to elevate our consumer experience is truly brand stories to consumers.” simplified, you won’t see scale.”

Lisa Donohue Global Brand President, Starcom

Richard Hartell Global President, Business Transformation, Publicis Media

Publicis Media

Voices

“Bots introduce a new way to create a relationship and start a dialogue with a consumer who isn’t yet a customer. They’re not the sexiest thing, but bots are important.”

“We are within sight of the era of personalization where we will be able to serve an individualized message to a consumer or customer.”

Stephan Beringer Global President, Data, Technology & Innovation, Publicis Media

Tim Jones, Americas CEO, Publicis Media

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“The succession of media innovations have led to the fact that consumers now have unprecedented access to media, information, services and entertainment media on their terms.

We’re experiencing a golden age for consumer choice and control.”

George Musi SVP, Head of Analytics and Insights, Blue 449

“To fulfill the needs and expectations of consumers during their moments of intent, marketers must deliver experiences that are efficient, safe and empowering.”

Michael Kahn Global CEO, Performics & Performance Global Practice Lead, Publicis Media

“Confluence is happening now.

“When the coffee runs low, Convergence is happening now.” the coffee machine will signal the home assistant to order Brian Terkelsen more, which will be delivered Global Brand President, Mediavest | Spark by another machine, perhaps a drone. Every interaction in this process will happen automatically.”

Marla Skiko EVP, Director of Digital & Data Solutions Publicis Media

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Social Chatter Top Brands

Hottest Gadgets, Gear & Innovations

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