FROM JANUARY 14, 2015

Remembering the C in CES

Gayle Fuguitt, CEO and President of the ARF, pointed out to me last month that few market researchers have the opportunity to attend CES, the Consumer Electronics Show that takes over Las Vegas each January.  She’s quite right in this assessment; few companies seem to prioritize sending their consumer insights professionals to CES.

It seems to me an odd circumstance – after all, the C in CES stands for Consumer. In this modern world where technology touches nearly every business category, why wouldn’t a professional whose job it is to understand consumers be at CES?

I myself didn’t discover the wisdom of attending CES until last year, when it came to my attention that at $0 for an exhibition floor pass, I really had nothing to lose by checking it out. What I didn’t realize is how much I would gain.

There are an infinite number of reasons that I personally find CES valuable, from getting to see my firm’s clients showcase their technology, to hearing industry leaders speak about innovation, policy, and strategy, to anticipating what media technology changes are likely to impact my business over the next 1-2 years. But mostly, I find it valuable to form my own educated point of view on innovation, instead of relying on that of others.

In the scheme of CES, I’m still a relative novice with only two shows under my belt. Still, it didn’t take me more than one day on the floor to realize that there is a noticeable delta between what you hear about CES, and what you witness when you’re there. That’s not to say you can’t learn from reading: four days after finishing my tour of CES 2015, I learned about this possibly awesome, possibly catastrophic brain-altering technology that I was blissfully unaware of 14 floors above me, as I enjoyed a Fat Tire in the Wynn Tower Bar last week. http://qz.com/325070/this-brain-altering-wearable-could-end-our-dependence-on-drugs/

But what’s different in person is the nuance, the interactions, and the opportunity to think critically about what you’re seeing. You get to try on the smart watch to see that it’s twice the size of your wrist, with spotty functionality in public spaces. You get to observe the color palates of 4K in person and wonder if 4K technology is going to change retail signage and billboards before it changes living rooms. You get to see how direct competitors showcase the same type of technology in their own unique ways, and field the same questions with varying levels of ease and accuracy.

You get to experience, instead of observe, the world of consumer innovation.  And here’s what I’ve taken away from that experience.

  1. In the best moments at CES, you get to feel and touch and really understand how new developments can change the world.  Sometimes those developments aren’t at the forefront of the media buzz or terribly glamorous at first glance. And that’s why I want to talk about Qualcomm and their IoT exhibit.

Before I dive in, here’s a snapshot of how Qualcomm sees the IoT landscape.

 
Well this drives home the opportunity, doesn’t it?

Given that Qualcomm is a company rooted in communications and mobile technology, it’s not surprising that they’re focusing on IoT. What did surprise me is what I found most interesting in their entire booth: a multicast modem for multi-gigabit internet service.

This unit below is, in essence, how you’ll be able to effectively transmit that WiFi you’ll need for a true Internet of Things Smart Home that doesn’t hang up or buffer or time out at every turn. It’s not pretty or sexy. But it’s important. It makes all the imagination and application possible.

It also allows households to manage their WiFi more effectively. Below is a prototype interface demonstrating how internet performance improves using Qualcomm’s “multi-user” technology.  In the demo below, it’s showing speeds that are twice as fast, using their multi-user” modem, and the speeds are also broken down by where the WiFi is being transmitted in your home, so you can manage the capacity more efficiently.

So why did this stand out to me, you wonder?

Well, to begin, it’s so far advanced that it won’t be obsolete anytime soon. We don’t have multi-gigabit internet in the US, or anything close to it. Google Fiber, at 1 Gbps, is as close as we’re getting, and that’s only been rolled out thus far in a few neighborhoods in exactly one mid-sized city.

Second, it mitigates one of the more fundamental hurdles to IoT adoption, namely bandwidth constraints. Have you ever done a speed test on your modem, and wondered why you’re paying for 100Mbps and getting 20-30? This device can make that more optimized, and at higher broadband speeds even efficient enough to run a full smart home. It’s not as “cool” as a mobile app that allows you to set your thermostat from your phone. But it’s the engine that will allow you to do that, while you stream Netflix in one room, download an HD movie from iTunes in another, and communicate remotely with your dishwasher that it’s run time.

A quick Google search tells me this device escaped the attention of major media last week. But it didn’t escape mine.

  1. It can be telling to see firsthand what the hype is all about – and if the hype is deserved.The most interesting example of this to me was DISH’s Sling service. As both a researcher and consultant in the OTT space, I’ve been anxiously awaiting DISH’s OTT bundle rollout and initially found it clever that they integrated their acquisition of Sling TV into their new OTT service.Then I went to their exhibitor booth.

I looked around and saw partnerships with Amazon, Roku, and XBox (pictured below). That’s when the real headline hit me: a service is only as valuable as its distribution. In this case, if you have a Chromecast, Apple TV, Samsung BluRay player or SmartTV, PS3 or PS4, congratulations, you can’t get this new service. Sling’s OTT service is an interesting first move, and perhaps it will grow to include other distributors, but right now it looks a little closer to dipping a toe in the water than diving right in.

  1. On the flip side, there’s equal value in seeing what isn’t getting hyped and maybe should be. DISH Network is now introducing a slick IP set top box with a unified guide that includes Netflix, Pandora, and other internet apps. Everyone says they’re doing that. DISH actually is. And a tour of two different search and discovery technology exhibits tells me that cross-platform discovery is ready to roll, as soon as distributors actually put their content on IP set top boxes.  If DISH is making a splash, I’d say they’re making a bigger one on their traditional side than on their OTT one.
  2. There is no better place to imagine and understand how we can better integrate consumer insight into innovation. The CES floor is full of products that appear to have bypassed any sort of consumer testing, or outright ignored what it said. (I’m talking to you, 3D televisions.) It’s a petri dish of inspiration for how the consumer insights industry can do a better job of infusing our expertise into the innovations of tomorrow.

Let’s indulge in a few examples of this.

Example 1: The Shirt Camera. FirstV1sion is one of the cooler technologies I came across – basically it’s GoPro for clothing – a camera built into a compression-style shirt that athletes can wear on the field/court. It’s a clever idea, with immediately obvious applications not just to sports, but other types of documentary style production.

The coverage of FirstV1sion makes some lofty promises, such as “It´s completely imperceptible to the player” and “The player won’t be able to tell that he is wearing it.” (See the full description here: http://nxtinsight.com/10-upcoming-wearable-prototypes/)

Imperceptible on-field videography is a heck of a value proposition. Unfortunately, it’s probably only true if the player has no nerve endings, sweat glands, or breasts. This clothing was on display at CES, and for a spandex athletic shirt, it’s perceptively heavy and padded in the chest area, and undoubtedly sweat-inducing. Also, the camera was overheating to the point of being untouchable. (The guy at the booth responded to the last criticism with, “Well, it’s been on for hours.” To which I thought, “Have you been to a sporting event?”)

The product has clear promise, but it doesn’t appear ready for launch. And sometimes, understanding how a product doesn’t deliver upon its promise is exactly the type of insight that a startup team needs.

 
A heavily padded center with a piping hot camera.

 

Example 2: Wearables, in General. If I had to give CES 2014 a logline, it would have been “Wearables: A Story of Unwearable Accessories.”  To be fair, the wearables of 2015 are decidedly less unwearable than those of 2014. I might actually wear these Toshiba frames, for example, if I could put my own prescription in them. (Sidebar: can we stop pretending that bespectacled nerds are going to wear glasses over their glasses? Just because it started with Google doesn’t mean there’s a forthcoming fashion trend of “six eyes.”)

But we still have a long way to go in delivering wearables that people want to, well, wear. Take for example this fitness wearable from Sony, which apparently assessed that cheap bling is what women want to wear while working out. Or, ever.

 
Pink bling: I might have thought this was cool workout gear when I was 6.

Example 3: The Selfie Drone. While some products just aren’t there yet, others seem to misunderstand their customer value proposition altogether. Enter Zano, a drone that will take selfies for you. As I posted on my personal Facebook page, as a society we have bigger problems to address than arm length if we start buying drones to take selfies. A flying camera might actually have some uses – security coverage, for example. But I’m going to go out on a limb and say that vanity is not the right market position for this product.

 
My selfies don’t want to go to new heights.

Example 4: In-Dash Tablets. Then there are the times when there just seems to be a glaring societal danger at stake, for example having what is basically a WiFi connected tablet in your automobile dashboard. Setting aside the inevitable repair cost and outage issues, I couldn’t help but wonder how many automotive deaths we might cause by allowing people to surf the web while they drive. Even if it’s voice controlled, we humans have cognitive limits, and there’s a lot of science to back up our lackluster multitasking skills. It’s fun to look at this stuff, but there’s a certain sadness to the realization that some creative innovation arguably shouldn’t make it to market, even if consumers want it.

Indeed, what a researcher brings to the table in attending CES, is a certain wisdom for understanding why consumers buy-in, why they hesitate, and when they maybe don’t have their own best interests at stake.  Never underestimate the value of understanding the consumer psyche in evaluating which innovations will hit the mark – and which will not.

5.     CES is a useful reminder that evolution happens gradually. During my inaugural visit to CES last year, I found that to my surprise, most of the innovations didn’t seem all that innovative, inasmuch as they weren’t breaking news to me. This year, the developments again weren’t about “wow!” surprise, but rather about a step in the right direction. 3D printing is actually printing useful items (I witnessed the printing of a prosthetic hand, which is a dramatic improvement from the bevy of plastic figurines of 2014), curved screens now seem to have a purpose if you’re setting up a control room, and I can see the value in 4K for production editing and digital billboards, until prices come down enough for it to take off in the living room. So was I blown away by anything? Not really, but half the insight lies in seeing how questionable products from last year can evolve into potentially useful ones this year.

6.     There is a curious amount of “me too” copycatting at CES. And nothing provides a better lesson in the value of thoughtful brand differentiation than a lap around the accessories sections of the show. As one article I read noted, “How many selfie sticks does a person need?” I wondered the same thing about headphones and speakers, two other themes of this year’s accessory onslaught. While most of the booths were bathed in an indistinguishable repetition of neatly organized headsets and handheld speakers, a few stood out from the crowd…for all the wrong reasons.

We’ll start with the booth that assumed consumers really want different sets of headphones for every device in their household.  Alas, this doesn’t really dovetail with the “please make my life easier” theme that we hear in all media tech research with consumers who are not early adopters.

 
So if I have both an XBox and a PS3, I need different headphones?

Then there’s the headphone booth with personnel who spoke extensively about quality and Bluetooth integration, without the ability to demo product sound. Let’s contrast that with my trip to Costco a week earlier, during which a store rep was able to connect his mobile phone to a sound bar via Bluetooth to showcase the sound quality for me before I purchased the product. I’m not saying it’s a bad idea to differentiate your brand and booth design on high-end quality. I am saying it’s a questionable differentiation when your product demonstration capabilities are weaker than a wholesale club that sells toilet paper in packages of 64.

Next we have the standout strategy of, “we’re colorful!” Unfortunately this was about half of the headphone booths.

Some credit goes to this dinosaur-sized pair for standing out, though the lack of 360 degree branding kind of misses an opportunity. Whoops.

And finally there’s the selfie stick barrage – rows and rows of indistinguishable booths that look like this. The city of Shenzhen is very invested in selfie stick manufacturing, and on some level the “me too” nature of accessories at CES is a fascinating insight into Chinese culture, and its predilection for efficiently mass-producing sameness.

On the flight home I sat next to a fellow attendee from Shenzhen who manufactures mobile accessories. Last year he had a booth. I asked him how that went, and why he didn’t have one again. His response was, and I quote, “It was a waste, I only got 30 cards and half weren’t [in my field].”  It drove home the reality that investing in a booth at CES requires an equal investment in brand differentiation.

  1. You can nonetheless learn something about brand strategy by paying attention to who does differentiate themselves cleverly, and how they go about it. Two big surprises stood out to me:

LG: I expected IoT greatness from Samsung and Sony, but it was LG who conceived one of the best smart home exhibits I’ve seen, with a cohesive and interconnected layout. New products were not only built to talk to each other (the very nature of IoT), they were exhibited as such so that you could imagine the end result. I found myself fantasizing about walking into an LG factory store, replacing every appliance and system in my house all at once, and then sitting on the couch while my LG vacuum cleaner empties itself and my LG refrigerator notifies Amazon Fresh that I need more Lactaid. Might it be time for an investment in direct-to-consumer sales, smart home appliance manufacturers?

 
need an LG Signature Kitchen.

Panasonic: It would appear to me that Panasonic is trying to be the adventure brand of electronics. I don’t know if it’ll work, or if consumer research supports this approach from a strategic standpoint, but I do know that at least their booth looked different enough for me to stop and check it out. And in a sea of uniformity, that matters.

Panasonic also had some great sports applications that caught my attention, not the least of which was a partnership with SAP for an analytics platform that tracked sports stats and performance. Talk about a cool, transparently beneficial application.  As I commented on how valuable this would be as an enterprise tool for professional and college sports, the guy standing next to me retorted, “And then before you know it, it’ll be in Little League.”  I laughed out loud, and then realized it was probably the truest statement I’d heard all week.

  1. You can also learn some clever ways of thinking about customer segmentation. Credit goes to Panasonic again, this time for an intriguing use of transparent customer segmentation with a headphone product suite tailored to distinct psychographic customer segments. The display almost demands that you find yourself among the segments, without being too heavy handed or analytical about it. (Although I think they’re missing a segment I like to call, “the headset misplacer.” I’m not saying I’m in it, but do any of these headphones come with GPS locators for the multitasking professional?)
 
I *am* a trendsetter! I’ll buy that set!
  1. Sometimes, the biggest hurdle between a company and its customers… is the company itself. One of the things that has baffled me on both of my CES journeys is the degree to which companies spend huge sums of money to be entirely unprepared or off the mark at CES.  These are just a few of the curious strikeouts I came across this year:

Language Barriers – Hisense is a really cool Chinese electronics company that you probably haven’t heard of because it’s about to roll out in the U.S. And I’m not just saying they’re cool because last year they hired the Jabbawockeez to perform in their booth, although that is the reason I discovered them in the first place. (I won’t go as far as to say it made sense, but it was markedly less weird than the Marilyn Monroe impersonator or Go Go dancer I saw this year in other booths.) They have intriguing products like Roku TVs and kitchen lights that can project down touch sensitive internet onto the counter. I was completely sold on the awesomeness of this company, and wanted to learn more.

Unfortunately, nobody working the connected home portion of this booth spoke English. Not the wisest idea when you’re exhibiting at a trade show in America.

Products That Don’t Work – If you are exhibiting at an electronics show, it seems a reasonable expectation that your electronics should work. Take this touch screen in-flight entertainment system for example. I touched the screen. Nothing happened. I tapped it a few times. Nothing. I looked around for someone to help me. Nobody. I left.

 

Products That Make You Cringe – This year, Toshiba won my award for the most awkwardly disturbing showcase with its “Communication Android” exhibit. With a physicality that is roughly as human as a crash test dummy, and a robotic voice that lacks Siri’s sense of humor or Teddy Ruxpin’s warmth, Android lady offers a certain je ne sais quoi. And I mean that literally, I really don’t know what she offers, other than the distinct feeling of discomfort that comes from wondering what on earth Toshiba was thinking. “I. Can. Smile.” she assures bystanders with a Stepford Wife inflection and clothing ensemble. And then her lips move ever so slightly into a position of a grimace usually reserved for that moment in a long car ride when we regret having downed a cup of coffee before hitting the stretch of road with no rest stops. The sign says it’s the robot of tomorrow for the service industry. So it’s creepy and designed to put more people out of work? And now I find myself questioning both the judgment and quality of Toshiba. I imagine that’s not the message they were trying to send.

 
Pretty in Pink or just Weird Science?

 

  1. Lots of smart, interesting, successful professionals go to CES.For my first 36 hours in Las Vegas, I didn’t go to a single exhibit. I attended a tech entrepreneur networking event, and was introduced to a number of clever startups. I had drinks with a group of other media researchers, and plotted our collaborative empires. I listened to the CTO of the United States captivate a room full of female executives with stories about influential female engineers and code breakers. I chatted with an Israeli entrepreneur about mobile technology and visiting Tel Aviv. I listened to the head of the FCC discuss net neutrality, navigating Title II regulation, and being called a Dingo by John Oliver. I learned more from others in 36 hours than I probably will the rest of the year in my office.

Of course, there’s nothing quite like CES to remind you of the human essentials. As I left town, fatigued from head to toe from miles of walking and hours of standing, it struck me that maybe this woman I noticed in the Qualcomm booth was onto something even more profound than the Internet of Things and 3D printable prosthetics: sometimes you just need a break from technology.

Now there’s an insight.

Kerry


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