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CES 2019: From Consumer Electronics to Connected Experiences

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This year marked the 52nd year of CES– one of the most highly anticipated product launch platforms in our industry. With 2.9MM square feet of exhibition space, over 4,500 exhibiting companies flocked to Las Vegas to showcase their brands and products to consumers across every market. There were over 188,000 attendees from all over the globe, including our Havas digital strategy team, who curated the most meaningful insights and takeaways for our clients and colleagues.

Since the launch of smartphones circa 2007, the level of expectation from CES increases each year as marketers and media practitioners seek the next game-changing technologies. While it may not have been home to the next iPhone, Google or Amazon disruptor (yet), CES 2019 went beyond gadgets, robots, and cool toys.

Certain key themes have remained of top interest over the years, and they continue to build momentum in the marketplace: smart homes, voice, retail, IoT — all of which ladder up to connected experiences. Connected devices have given brands unparalleled access to consumers by shortening the distance between the consumer and what they want to engage with or buy. Conversely, they have increased the distance between brands and the consumers as multiple connections also bring the challenge of holding their attention. Connected devices and consumers enable richer opportunities for brands only when the right ecosystem powers that opportunity. Furthermore, consumers expect to get what they want in their immediate context, at their precise moment of need.

For brands, this change in the power dynamic has raised the importance of effectively and efficiently interacting with consumers across each touchpoint. To be able to distinguish themselves and drive long-term loyalty valuable consumers, they need to build a long-lasting authentic connection. This is dependent on their ability to maintain a consistent and always-on presence in front of their consumers with or without paid media dollars or exposure. In a world where marketing dollars continue to shrink, that is no small feat; however, the mandate is quite clear: To deliver the best digital marketing solutions, brands must simply find the maximum outcome from their investments. And it is with this mandate in mind that we navigated CES 2019 to draw inspiration from what was showcased on the floor and build meaningful themes for our clients and partners to share in the boardroom.

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CES 2019: From Consumer Electronics to Connected Experiences

  1. 1. 1 X CES CES 2019 FROM CONSUMER ELECTRONICS TO CONNECTED EXPERIENCES
  2. 2. 2 X CES
  3. 3. 3 X CES 4 EXECUTIVE SUMMARY 6 SMART[ER] EVERYTHING WILL TRULY MODERNIZE MARKETING 12 RETAIL AS A SERVICE STRATEGY WILL GROW BUSINESS VALUE 16 CUMULATIVE VALUE VS. EXCLUSIVE VALUE WILL DELIGHT PEOPLE AND DEFEND BOTTOM LINE 20 CONTEXTUAL COMMERCE IS A LYNCHPIN AND SET TO GROW STRONGER 24 BATTLLE FOR VOICE HAS JUST BEGUN AND WILL RAGE ON! 26 CONNECTED MOBILITY WILL UNLOCK MEANINGFUL CREATIVITY 30 COOL THINGS OUR 2019 HOLIDAY WISHLIST 32 CONCLUSION TABLE OF CONTENT
  4. 4. 4 X CES EXECUTIVE SUMMARY This year marked the 52nd year of CES– one of the most highly anticipated product launch platforms in our industry. With 2.9MM square feet of exhibition space, over 4,500 exhibiting companies flocked to Las Vegas to showcase their brands and products to consumers across every market. There were over 188,000 attendees from all over the globe, including our Havas digital strategy team, who curated the most meaningful insights and takeaways for our clients and colleagues. Since the launch of smartphones circa 2007, the level of expectation from CES increases each year as marketers and media practitioners seek the next game-changing technologies. While it may not have been home to the next iPhone, Google or Amazon disruptor (yet), CES 2019 went beyond gadgets, robots and cool toys. Certain key themes have remained of top interest over the years, and they continue to build momentum in the marketplace: smart homes, voice, retail, IoT — all of which ladder up to connected experiences. Connected devices have given brands unparalleled access to consumers by shortening the distance between the consumer and what they want to engage with or buy. Conversely, they have increased the distance between brands and the consumers as multiple connections also bring the challenge of holding their attention. Connected devices and consumers enable
  5. 5. 5 X CES richer opportunities for brands only when the right ecosystem powers that opportunity. Furthermore, consumers expect to get what they want in their immediate context, at their precise moment of need.    For brands, this change in the power dynamic has raised the importance of effectively and efficiently interacting with consumers across each touchpoint. To be able to distinguish themselves and drive long-term loyalty valuable consumers, they need to build a long-lasting authentic connection. This is dependent on their ability to maintain a consistent and always-on presence in front of their consumers with or without paid media dollars or exposure. In a world where marketing dollars continue to shrink, that is no small feat; however, the mandate is quite clear: To deliver the best digital marketing solutions, brands must simply find the maximum outcome from their investments. And it is with this mandate in mind that we navigated CES 2019 to draw inspiration from what was showcased on the floor and build meaningful themes for our clients and partners to share in boardroom.  
  6. 6. 6 X CES SMART[ER] EVERYTHING We are currently looking toward a world of everything connected and everything smart(er). In recent years, there has been a lot of buzz surrounding 5G, but within this year, we are looking at a world both inside and outside our homes that is truly connected, thanks to the reality of 5G rollout at scale. We looked at a B2C and a B2B organization to understand both the consumer- facing and internal organization focus of how 5G can help the two sides deliver smarter, more meaningful results. LG will be the first company to launch 5G smartphones in 2019 thanks to its 20+ year partnership with Qualcomm. 5G is designed to connect everything — people, devices, platforms and technologies. What it means for consumers from an experience standpoint is higher video streaming and download as well as high- performance apps or products to collaborate.    WILL TRULY MODERNIZE MARKETING
  7. 7. 7 X CES
  8. 8. 8 X CES LG isn’t just stopping at 5G-powered smartphones, they are extending it to their full range of ThinQ home products, all of which are powered by 5G. These were introduced last year and have since continued to build on AI solutions. This year, LG showcased how much further those efforts have come, from enabling devices to take on smart commands to offering proactive recommendations to consumers based on their circumstances. This offers them personalized suggestions based on contextual understanding of the users. The two areas of focus that came to light from LG emphasized proactively providing user- centric solutions and the most advanced proactive customer care, both synthesized into their message of “Ask me simply, I will answer thoughtfully.” In each of these, it is quite evident that lifestyle data takes a Air Conditioner Air Purifier Wash Machiene Robot Vacumm Refridgerator
  9. 9. 9 X CES center stage. By learning from patterns of how often people clean their house or the best time to run a laundry load, they will be able to proactively perform those functions, freeing up manual productivity time that goes into doing repetitive chores. Most advanced customer care is grounded in the principle that the better you understand someone, the better you can care for them. In each of their product launches, such as LG Styler total clothing care solution, 88-Inch 8K OLED TV with 33 MM self-emitting pixels or integration with two voice assistants, Google and Alexa plus the first partner to integrate Apple AirPlay into their TVs, it was clear that LG is ready to create a powerful value proposition, building on a fast, intelligent and data- led ecosystem to surprise and delight their current consumers or potential new ones. 20,000 devices / 3,500 brands Routines (Alarm, Traffic, News Channel) Music Shopping Home Network Skill 10,000 devices / 1,600 brands Manage Daily Tasks ServiceFind Answers Smart Home
  10. 10. 10 X CES In 2018, of all the TV screens sold, 70% were smart TVs. Consumers increasingly consider streaming to be a basic TV function of comparable importance to the rest of their media habits. Android is currently the most popular smart TV operating system platform, including both the full Android TV implementation and modified versions used by many Chinese TV brands. IHS Markit expects Android will continue to gain share through 2022 as a common third-party platform with native support for Google Home. Proprietary smart TV platforms from Samsung (Tizen) and LG (WebOS) are the second- and third-most popular smart TV operating system platforms. This means is that we are looking at a very near future of truly connected media exposures across all channels and a brand’s ability to buy, deliver and optimize across those channels…at scale.   For B2B, we looked at Qualcomm. With 45% of the market share in the smartphone apps processor market share, Qualcomm has been at the leading edge of disrupting mobile technology for the last 30 years. Over the last few years, their mobile innovation has been focused on making 5G real and eliminating a lot of barriers. Qualcomm had actual 5G installation right above their CES booth that was powering many of the experiences across the smartphones, Industrial IoT or automotive experiences. As part of the B2B track, they had everything from low IoT powering static limited decisioning in a set location to real- time (available today), complex IoT in moving vehicles.  There were electronic shelf labels that could be updated in real time through one single database. If a brand wanted to start a sale tomorrow and wanted to change the prices of the inventory that was going to be on sale in the physical stores, all they would have to do is communicate with the gateway and it could switch the prices all at once. If one product is not selling very well and there are business decisions you want to trigger such as adjusting price, then you can do it on an item-by-item basis. If the product is out of stock, then the staff can use the handheld product scanner to scan the product and flash the LED to know where the product is located for restocking. Each of the labels had NFC equipped within the labels so that the consumers can interact with the product in depth. In China, WeChat is using the QR codes within the digital labels to also enable buying the product, a setup that has yet to be scaled across Western markets. The advantage of the Qualcomm 5G experiences is that any business can take make use of them. An algorithm can be modified based on the business need either as a predetermined set of rules or in real time. Everything from monitoring user behavior or navigating patterns within a
  11. 11. 11 X CES physical store or a financial institution to optimizing an event experience for attendees in real time is available to today’s marketers. At a rock concert, for example, you can have everything from the lights to the movement of refreshment carts and inventory management synchronized and respond, based on the data that you can receive from physical objects equipped with a 5G cellular modem and an integrated A7 processor. Pre- trained cloud models can be pushed to the devices and trigger different scenarios. Communications can happen across multiple devices at the same time across the multiple locations. In the case of complex automotive decisioning, we are looking at one chip powering the full operating system within a vehicle, irrespective of whether it’s a sedan or an SUV.
  12. 12. 12 X CES RETAIL AS A SERVICE STRATEGY Rising from the East is the evolution of eCommerce players beyond just resellers of goods manufactured by other brands. Given the learnings and success from their operations and technologies, companies such as Alibaba. com and JD.com are bringing their expertise to the table for all marketers alike, in their quest to modernize and transform their businesses. Both of these players are opening up their infrastructure solutions as intelligence and service offerings to businesses across the globe. Last year, Alibaba introduced text translation in real time, a feature that is now going to be available through the Google Interpreter mode this year. Although not in real time as each speaker has to wait for the other person to WILL GROW BUSINESS VALUE
  13. 13. 13 X CES
  14. 14. 14 X CES talk and Google to interpret the text. Alibaba showcased a real-time translation in video calls feature this year. With this, you can have two speakers, one speaking Chinese and one speaking English over a video call; each of the speakers will see what the other person is saying in the language that they are speaking in. The English speaker will see English text and the Chinese speaker will see Chinese text. Imagine the impact of this functionality for people in customer services. Lowering the language barrier for customer service across multiple industries is a huge operational win, especially as it puts humans back into the experience vs. responding to a robot’s monotones.
  15. 15. 15 X CES The feature is going to be fully ready to use in six months across multiple languages. Right now it is available in Chinese and English.  Alibaba also introduced a micro-lending business feature called “Pay Later” for the US market that caters to individual borrowers of SMEs. The feature allows businesses facing financial pressures to apply for a loan on the platform. Within just 10 minutes, they can get approved for a maximum amount of $150 USD. Once approved, the funds can be used to acquire materials for a business within the Alibaba platform. Given that businesses can source from anywhere in the world, the $150 USD can go a long way in a lot of markets. Alibaba also showcased a dashboard for analysis and management that was a simple, effective and impactful visualization of how the business is doing across global markets, where are they making sales, where they are growing and what markets are delivering across which product category, among other areas. These are all features that a business can effectively use to modernize their backend operations and capabilities.  On the B2C side, we saw what the future of modern or high-tech retailing is going to look like via a few “stores” that were set up across the floors. The P&G Life Labs showcased an SKII (Japanese skincare brand) store that demonstrated how consumers can get their skincare product recommendations based on a deeper understanding of each person at an individual level. As each consumer entered the store, they got a wristband and from there proceeded to a scanner that took imaging of their face from all angles. The scanner could be initiated by touching the band to a small reader on the wall. The cameras fitted on top of the screen then automatically read each band so the consumer could see results. From there, a consultant discussed those results with the consumer, matching them to the products that would address their specific needs. Finally, an interactive screen that monitored hand movements on the table showed each consumer the information for the product they touched or would be likely to touch. At this point, the consumer can either directly buy the product from the table in the physical store or place a digital order to ship directly to their home.  Given the advancement in mobile connectivity via 5G, beacons, sensors and RFID/NFC-enabled readers in stores might actually have a fair chance of truly delivering on the promise from many years of a deeper understanding of consumer behaviors in making purchase decisions in the physical world..
  16. 16. 16 X CES CUMULATIVE VALUE VS EXCLUSIVE VALUE If there was one palpable undercurrent across CES this year, it was the drive of businesses to offer cumulative value to people vs. trying to lock them down into exclusive environments. We can thank the development in voice for this opened view between business organizations and departments. The LG integration of Google, Amazon and Apple AirPlay goes to show that marketers are starting to understand that people have diverse preferences, behaviors and mindsets. And to build stronger relationships and loyalty, they need to embrace this diversity of choice vs. trying hard to get them to bypass or cut the other option out, especially in a world where margins in hardware continue to get squeezed and brands need to deliver on growth and profitability benchmarks.  WILL DELGHT PEOPLE AND DEFEND BOTTOM LINE
  17. 17. 17 X CES
  18. 18. 18 X CES In 2018, there were approximately 223 million TVs shipped (source: IHS Market) and 45% of those shipments were smart TVs. The increased availability of hardware that is integrated with a Google Assistant, Amazon Alexa, Alibaba T-Mall Genie or any other voice solutions that may become popular is only going to increase the demand for these products. In 2019, single-family home sales in the US are projected to be at 595,000. Homeowners are expected to spend about $339 billion on remodeling in Q1 2019 and $346 billion in Q2 2019, 6.9% and 7.0% increase YoY, respectively. All of these projections cumulatively signal a smarter home design- led market. By integrating the big three within their TVs, LG has given a strong value proposition to be more meaningful to new and existing customers alike. This is a trend that is followed by most consumer electronics companies so as to get their fair share in the market.  In another example, we saw Intel and Alibaba partnering for the upcoming Tokyo 2020 Olympics. Both are the official partners for the event and are combining their strengths for a first-ever AI cloud-powered 3D athlete tracking in real time to viewers. As a result, the viewers/ fans will be able to gain more insights into how world-
  19. 19. 19 X CES class athletes perform. They will be able to compare two or more athletes much more granularly as those athletes are going through the event. The potential for information goes much further, however. This could redefine the future of performance, sports or even potentially health and wellness. In the immediate term, it also helps brands featured with those athletes to gain new or reignite existing customers across markets, with Alibaba ready to fulfill the demand via their eCommerce offering.  Even outside CES, the announcements of two or more brands that are part of the consumers’ lives joining forces, have been increasing. In November 2018, Apple and Amazon signed a deal where for the first time ever, Apple will directly sell new iPads, iPhones, Apple Watch series and Beats headsets. Google and Walmart joined forces in March 2018 to combat Amazon’s eCommerce domination. Walmart has also joined up with Bonobos, Tasty and acquired Flipkart in India to continue to make itself relevant to future customers and take advantage of the natural behaviors and preferences within a culture vs. trying to do everything independently. We are looking at a future where network effect is not just a term within the technology industry but one of the focal points of any business across any category.
  20. 20. 20 X CES CONTEXTUAL COMMERCE Over the last few years, we have seen digital technology open up the possibility of making anything and everything shoppable. The 1.0 version was buy buttons on Instagram, Pinterest, Facebook or display ads, enabling commerce within digital channels. Increasingly, we are living in a world that is connecting, converging and closing the gap between physical and digital spaces. A missing piece of that ubiquitous connectivity is the time we spend navigating or commuting around. IS A LYNCHPIN AND SET TO GROW STRONGER
  21. 21. 21 X CES
  22. 22. 22 X CES According to the US Census Bureau, the average roundtrip commute in the US is 52 minutes — that’s 4.35 hours week for a five-day, full-time job and 200 hour per year spent commuting. For those spending time driving, those 52 minutes are not the most productive, aside from making calls or listening to audio content. There is still a significant portion of time that is lost because of the need to focus on the road. Connected devices and faster connectivity in vehicles are elevating that down time by turning cars into contextual commerce channels. Whether it’s through the smartphones (58.7% commuters use smartphones while commuting), connected in-car dashboards (16.7%) or in future self- driving cars, technology is turning that lost time into a contextual opportunity that’s worth $230 billion (source: p97 Study with PYMNTS).  One of the industries at the forefront to take advantage of this growing connected commute is food and dining, including QSRs, coffee and baristas, groceries and CPG. Every connected, smarter car on the road is another connection point for brands to equate for. When we place this paradigm into the context of penetration of the voice assistants, the eCommerce strategy gives way to a whole new perspective, which brings us to our next takeaway…
  23. 23. 23 X CES
  24. 24. 24 X CES BATTLE FOR VOICE Google Assistants are now integrated with 10,000 devices and 1,600 brands. Amazon Alexa is integrated with 20,000 devices and 3,500 brands. Between the two of them, they own 84% of the voice market share, not to mention the 58% market share that Alibaba has in voice in Asian market. Those numbers are big but are just the tip of the iceberg. While in fact today people might be using those assistants to perform routine tasks, the adoption and opportunity is far from being saturated. Shopping and connecting with voice are new skills to most people. It’s a completely new behavior. Malcolm Gladwell in Outliers shared the principle of 10,000 hours (derived from the work of psychologist K. Anders Ericsson), along with our natural abilities, of practice to become a natural at a particular task. Unlike Tony Stark, we are far from having spent that much time interacting with voice assistants, to deem them ineffective for commerce opportunities or consumer adoption.  HAS JUST BEGUN AND WILL RAGE ON!
  25. 25. 25 X CES
  26. 26. 26 X CES CONNECTED MOBILITY The momentum for smarter cities to elevate traffic, transportation, accessibility, service and safety is taking shape across multiple countries. There are examples across the world of smart city solutions being implemented in Singapore, China, New York, Stockholm, Barcelona and Dubai, among others. According to Arup Group, the global market for smart urban services is estimated to be $400 billion per year by 2020. We need smarter cities in order to sustain the growing demand on the finite resources and space on our planet. Connectivity among vehicles, infrastructure and communities opens up WILL UNLOCK MEANINGFUL CREATIVITY
  27. 27. 27 X CES
  28. 28. 28 X CES new opportunities to develop and improve vehicles and mobility services, which makes the environment around us safer, more efficient and more convenient. By seamlessly connecting users, vehicles and services over the internet, the purpose becomes delivering more meaningful value to societies and citizens vs. just a cool ride. We were particularly interested to see how various business organizations are using technology to mitigate the scarcity of resources as well as create new ways to drive the society forward. Bosch stood out to us in their efforts to bring connectivity from mass transit to individual means of mobility. The concepts and showcases at CES around smarter cities and homes signal the integration of human, artificial and contextual intelligence. This intelligence hinges on the development of faster networks (5G and beyond) and seamless connections among infrastructure, devices, vehicles, people and the ability of systems to capture, process and apply the data in real time. The interest in smart cities is going to pick up momentum and accelerate with social, economic and environmental changes. Among what we took away from the advancement of the automotive and robotic exhibits were the possibilities that can be unlocked through the efficient use of physical infrastructure as well as through data analytics and applying machine learning to support and build strong societies and connections.
  29. 29. 29 X CES
  30. 30. 30 X CES COOL THINGS OUR 2019 HOLIDAY WISHLIST BELL NEXUS Four-passenger hybrid-electric air taxi for the E-VTOL (electric vertical-takeoff-and-landing) LG ROLLABLE OLED TV One of the stars at CES, this 65” TV comes equipped with LG ThinQ AI. When turned off, the TV rolls down into an unassuming piece of furniture
  31. 31. 31 X CES TOTTO NEOREST NX2 The smart toilet features high-tech sensors that automat- ically open and close the lid and flush the water. There’s a personal cleansing system that uses warm water, an air dryer, heated seat and in-bowl deodorizer VICTROLA RECORD PLAYER Vintage record player features a turntable, CD player, Bluetooth connectivity and an AM/FM radio BOSE SUNGLASSES Feature built-in Bose speakers for music playback and a microphone so you can make calls hands and ear-free
  32. 32. 32 X CES CONCLUSION After four days, 52 miles of walking between the team, 20 portable battery charges we came back from CES 2019 ready to partner, adapt and innovate, respond effectively and promptly to changing circumstances of the industry, society and our client’s businesses. Over the next few weeks we will be issuing deep dives around specific category verticals and recommendations on how we can bring these market dynamics to play or inform the business goals of our clients. Stay Tuned!
  33. 33. 33 X CES SARGI MANN EVP Digital Strategy & Investments Sargi.mann@havasmedia.com JESS SANTINI Communications Manager Jessica.santini@havasmedia.com ALI GHUZZI Creative Director Ali.ghuzzi@havasmedia.com TEAM OF CONTRIBUTORS

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