Eric Wagatha 

Good afternoon my name is Eric Wagatha  with GFK I'm joined by my colleague, colleague Karen Ramspacher with MRI-Simmons. Now last year when we here speaking to you at CES, we talked about the promise of the smart life, how connected devices in the home and on the go will play an increasingly influential role in our lives. However, we're starting to learn that consumers are rethinking some of this, they're questioning whether that promise is actually turning into a reality. We're learning that that trust equation between consumer and brand is being revisited and maybe even rewritten. So for the next hour, Karen and I are going to speak to you about the importance in building trust with consumers as we look at the current environment for smart, connected and mobile devices. And we'll leave you with several key ideas and principles on how to build trust in tech for the generations.

Eric Wagatha 

Now to do that, we're going to share some of our most current data and insights from several GFK studies will leverage our consumer life global survey of consumers where we track global trends with in our 23rd year now doing that will leverage our MRI smart home study which is conducted annually in the US. And as you'd expect, it looks at different consumption and psychographic and attitudinal and behavioral attitudes when it comes to the smart home will also leverage our GFK auto mobility and technology study. Now this is a dedicated study focused on automotive intenders. And as you kind of expect, it looks at in car technology, connectivity issues, automation, and EV. Alright, so let's get started. The truth is today, it's increasingly hard to find what is true and what's false. We have access to so much information online. That even simple topical issues go unresolved and unclarified. What do I mean by that? For those of you who might have had eggs and coffee for breakfast this morning? Are those actually good for you or bad for you? I'm still actually trying to figure out what that is. And honestly, that discussion keeps evolving weekly, monthly, yearly. And it's not just in small issues like this. It's actually at the highest sphere of political influence, right? We're seeing increasingly conflicting narratives based on different interpretations of published facts. And so it's in this environment, that consumers make decisions. They make choices for products and services, based on what they're increasingly gathering online, right.

Eric Wagatha 

Truth is, we're finding out that much of that is fake to right. bots and smartphone laden click farms. are creating different impressions and recommendations to consumers, oftentimes false themselves. So in fact, we're at an age that sometimes seeing is actually no longer believing what you have a look at these three photos up here. Can you guys spot which one of these three is a fake? Right, left, middle? Tell you what, they're all fake, folks. All right? That worked well. We're entering the age of what's known as the fakes. Were off the shelf AI software. And a really powerful laptop computer is all you need to create a false identify identity, falsifying identity of an individual, steal an identity and create different and potentially dangerous messages out there. Now if any of you have not seen a deep fake video before. Let me show you a clip from a public service announcement that the actor director Jordan Peele put out a little over a year ago.

Video Audio

See, I would never say these things, at least not in a public address, but someone else would. Someone like Jordan Peele. Moving forward, we need to be more vigilant with what we trust from the internet.

Eric Wagatha 

Right? So it's not surprising that amongst consumers, the perils of technology, are becoming more top of mind. So at GFK, we track 21 concerns amongst consumers around the world. The fastest rising personal concern we see is this idea of personal information falling into the wrong hands. In the US, right now, it's about one to five consumers. And as you might expect, this notion is lead in markets where we're more tech centric, more technical. And not surprisingly, with our youngest, most tech savvy Gen Y consumers. So not only do we have this concern over technology that's growing, but we're really, re-questioning the merits of our source of information in the US specifically, we are seeing a trust, decline in trust in media. Now, while TV continues to be the most trusted source of information, as you can see from the data here, all traditional formats, TV and newspaper and magazines are on the decline, especially over the past 10 years. Now, if we translate that to social media, we see the exact same thing happening, right, more and more of us leverage social media social channels to get information that in fact today 68% of Americans say they at least occasionally get their news from social media. What's ironic is that 57% of those same individuals will tell us that they believe that information is actually inaccurate. As I alluded to, at the beginning, we're also seeing an erosion in trust in our government in the US. One of the other concerns that we track is this idea of wrongdoing, or corruption by elected government officials. And as you can see here, we've gone up about 11 points in the past decade alone. Now, let me context that 28% for you, right now in the US, corruption and by government issued by government officials, is the third highest ranked concern. Number two is cost of health care. And number one, is having enough money to pay the bills and have a decent life. So we're in comfortable company here. Put another way from another metric that we have. Less than one out of four consumers in the US are optimistic about our system of government and how well it works. And that's actually at a historical low since we started tracking this. Beyond concern over our political system and our information channels, we do see in the US a decline in contents and other areas, our health care system, quality of the environment, that's certainly a topical issue today. But what I want to point out, there is one bright spot. And it's the one that really brings us here today. The effect of technology in our society continues to be an area where optimism vastly outweighs pessimism. Okay. But if you look, look closely at that data and look at those pluses and minus, you'll actually see that our optimism is even declining in that sphere as well. Now, why is that happening? Look, there are missteps and technologies, and they're easily amplified in media. Right. Now, some of those mistakes and missteps are socially awkward, maybe a little creepy, but some are actually downright dangerous. And we're constantly reminded of this almost every week or every two weeks, there's a new posting, right, a new article, a new release of another area where consumers need to be concerned about their personal safety, the personal identity of their own data. And it's not just in the devices that we carry that we have in our home. It's even at point of sale, right? Like your local gas station where data can be scammed. And so it's in this context, or maybe because of it, that we're actually seeing an opening a door opening for brands. For 46% of our global consumers are telling us I only buy products and services from trusted brands. They're looking to brands for that level of trust and respect. And this measure about buying trusted brands, it's actually part of a battery of 33 different brands and measures that we look at. And so what I'm just showing you here is it's a relevant and growing topic in the majority of regions around the world. Okay, so for those of you your brands that do have a global footprint, this brand responsibility is a consistent theme to leverage around the world. So what is a trusted brand? How do you build your trust equation? It's quite a lot of research out there. We have quite a bit ourselves, but to simplify and kind of boil it down to key themes there are really three buckets. One revolves around product product efficacy, quality, right? Responsibility, durability, another dimensions around service, customer responsiveness, that relationship that you have with them. But a growing body of evidence is suggesting that accountability is that growth territory, the differentiating territory, that trust building territory that's lacking right today, accountability takes into consideration; your employees. The environment in which you operate as a brand. And the level of transparency, right? We all know things don't always go the way we want. How do you address that? How do you communicate that? So before I dive more deeply into the trust principles, let's look at the current landscape technology in the US for building this trust. Karen?

Karen Ramspacher 

Thanks, Eric. So my name is Karen Ramspacher, and I'm SVP of innovation and insights at MRI Simmons, and I'm going to share some highlights today that really gives us the landscape of where smart technology is. And it comes from the MRI Smart Home Study that we did in collaboration with our colleagues at GFK. And just to tell you a little bit about the methodology, it was done with 4000 adult Americans nationally representative, and it was tied to the MRI survey of the American consumer, which if you don't know what that is, it's actually a survey of over 24,000 individuals who are specially chosen to represent the United States where we go into their homes and actually sit with them in their living rooms and talk to them for over an hour about all their types of media, the products they own, what they feel what they believe in what they care about. And so we tied this data together to give you a picture of where things are today. And I'm going to use this little visual moniker of the house to talk about the technology within the home, the technology within the cars, as well as the ticket technologies around the people, meaning us. And I can tell you one statistic that comes out of this 37% of adults wish that technology was more integrated into their daily lives. That sounds great, right? Because that's what you guys are here for. But I'll tell you, it's even higher among the younger set, the 18 to 24, who are the oldest end of what we call the Gen Z generation. Over 50% of them wishes that technology was more integrated. And I'm going to talk about the young people a lot. And I'm suspecting that in this room, most of you have that attitude as well. So smart technology is already here in the home among most Americans 61% of all of America. 151 million people have some form of smart home tech in their life today. Now that's aside from smartphones, which is a much higher percent. And the truth is, if they have one, 31% of them actually have three or more. So I'm going to tell you what they have. And were talking about entertainment, I use the living room. But of course, let's recognize the entertainment technology is actually throughout the house. And it's actually the highest percent penetration with 40% of Americans having some form of smart entertainment technology. And that makes a lot of sense, because I'll tell you, Americans love TV. It's really driven by this passion point. 70% of Americans say that TV today is one of their favorite pastimes. And it is the golden age of content. So it's not surprising. What tops the list here are the smart TVs at 35%. And that is a five percentage point rise year over year penetration. Followed by that is the streaming TV devices things like the Amazon Fire, the Roku to Apple TV, and that's at 32% which is a 6% rise year over year. And then also in this list are the digital speakers, the home assistants, the smart speakers, the audio, the tuners and even the virtual reality headsets. Right now across America, only 4% of people have a virtual reality headset. But I can tell you that one in four are familiar with the technology and so it has the opportunity to rise. Smart Energy products are finding utility throughout the household. Pun intended. And currently one in four have one of these smart energy products, the light bulbs, the thermostats, the controllers, even the energy managers. Home Security is ticking upwards and 24% currently have a smart Smart Home Security device led by the smart doorbells with cameras, which I know got a lot of advertising this holiday season. So we'll see how those numbers rise year over year. But right behind that is the smart smoke alarm. And those two items are the two that most Americans say they intend to buy in the next year. And I want to draw your attention to the digital keys. Right now it's 5% penetration across the US. But again, for the younger end of the spectrum, the 18 to 24 year olds, they're twice as likely to be using digital keys and twice as likely as the rest of America to want to use them. And so that really talks about how they see their lives, the ability to open their homes in the future. Smart appliances have been a topic here at the Consumer Electronics Show for several years. And I suspect that some in the room are surprised that these numbers aren't higher. But I'm here to tell you that the major barrier to this not surprisingly, is cost because they are one of the most expensive items in terms of the smart technologies that we have available, but one in five already own one driven primarily by the robot vacuum cleaners. And then of course all the other appliances are in the list and are taking up year over year.

Karen Ramspacher 

Now let's move from the house to the driveway and talk about auto mobility. This comes from a study that GFK does monthly. The auto mobility tracker is with 20,000 Auto intenders every month nationwide, so it looks at regionality. It digs deep into brands and models. The technology part of this is from a deep dive with an additional 3000 people where we ask about all the tech attitudes, behaviors and ownership. And there is a report available should you want to speak to our colleagues about purchasing it. Right now smart has been an increasingly major factor in the purchase decision for auto Among the intenders 89% tell us that their their decisions are influenced by this 39% say very influenced. And it's even higher among the younger end of the spectrum. These are the numbers of Gen Z and millennials who say that the in vehicle technology is very important. And 61% of all Auto intenders have said that they would eliminate a vehicle from their selection, if it didn't have the in vehicle tech that they're looking for. And they put their money where their mouth is, because in 2019 44%, that they were swayed in their vehicle choice by the in-vehicle tech that it had, and they got what they wanted, and they were happy about it. So what is the smart tech that's on the top of their lists? Not surprisingly, active safety has been number one throughout the years, and it's because it's the thing that they're most familiar with. Its things like the lane assist and parking help, but connectivity keeps coming. up in their list, as does the infotainment the screens for both the passengers and the drivers. I'm going to talk a little bit about electric vehicles and autonomous self driving as well. And just give a nod to the augmented reality is on the list as are the wellness solutions, things like helping the drivers stay awake. For the self driving cars, we know that safety is more automated than ever before. But still, drivers across America are not yet ready to give up control. You can see the levels here with 68% saying that they want to retain control of driving their car. But if you look down here at level 5, 31% are totally open to having a fully autonomous, no driver needed vehicle. Not surprisingly, the younger end of the spectrum is much higher. Those millennials the 25 to 39 year olds, they're 60% across the board open to the autonomy available. I do want to put a caution Note here though, because we asked throughout our study about whether each type of each category of technology is more of a risk or more of a risk reward. And you won't be surprised if I tell you that self driving cars are seen as more of a risk by 69% of Americans. So I wanted to take the opportunity to play a little piece of tape from a comedian named Bill Burr. And I like to use him in my presentations, because he tends to really express in a very funny and succinct way what many Americans are thinking? So I'm going to just play it now for you. I was watching something on that Tesla S. And it's like the self driving car and these two guys like computer looking guys, they were in this car and they put on the self driving mode, and according to the video, they put blankets over themselves and they took a nap. Then somebody wrote in one of the comments underneath it, like "would you get arrested if you got s***faced, put it on self driving mode and then sat in the backseat?" 

Karen Ramspacher 

So he raises some good questions there. And he actually goes on in this podcast to say that even he who is a self admitted technology, laggard actually has come to see the benefit of self driving cars. So, in my opinion, if Bill Burr is open to it, America is open to it. So I've talked about the self driving now let's spend a moment talking about electric vehicles. What we're seeing in our data is that the interest is stronger than ever, with 32% of all Auto intenders saying that they're open to purchasing or leasing an all electric vehicle. And of course, this is higher among the younger set. It's also higher among those who are looking for luxury, the luxury Auto intenders. And that actually goes across the board in terms of these types of smart technologies, they do tend to still be seen as luxury items. And so it's a challenge to us in the industry of technology to try to help Americans understand what this means across the board to all of us, not just for those who are in the highest bracket. And another note about electric vehicles is last year, there was quite a bit of hesitation due to the concern about the ability to find a charging station. Well, I can tell you that year over year, the concern is dropped 20 percentage points. And we believe that as more of the charging stations become available, that number will fall even further. Beyond the type of vehicles connectivity is the number two piece of type of smart tech that people want, and the connected behaviors as well as the desire for them are expanding. 59% of all Auto intenders said that they want a vehicle that connects to their digital assistant and one in five states they strongly desire this. Now, one of the questions we ask is whether it's brand specific? And the answer is no, they actually want to be able to have the technology go across all the different types of digital assistant brands. And you'll see that reflected in other data as well. In addition, the other type of connectivity is the idea that I could take my cellular or broadband signal with me into my car or my vehicle so that it essentially becomes a mobile hotspot. And the majority of people want that. And over one in three want to be able to use their vehicle, like a mobile wallet, so that they could do a drive thru for some food or go through a toll booth or a car wash and just seamlessly have their finances. The purchase taken out of a credit card or their bank account. And 50%, over 50% of Gen Z and millennials want this. So what we're seeing across the board is this desire for seamless ability to make my life easier. Now, besides the type of technology, there's also the way to interact with it. And we asked about that. And what you see here is that 39% want to do it through the smartphone, which makes a lot of sense, because that's the piece of technology we've been holding in our hand the longest. However, what you see is these numbers are so very close together, whether it's the touchpad or the ability to talk and even traditional buttons. So what we're recommending is that as manufacturers are putting the technology in the vehicles, give the consumer options as to how they're going to interact with it so that you can meet all their needs. One of the major things that comes out of all of our studies with technology is this concern for personal privacy. Now this in the auto study is an example where 45% of auto intenders actually said they were okay with giving their data in order to receive a benefit. So here they said, it's okay to monitor me with my permission so I can get lower insurance rates and put a little extra cash in my pocket. And again, 60% of millennials agree, millennial Auto intenders. So moving from the driveway to talk about what is around our bodies. 24% of Americans currently own some form of wearable or body related smart technology. And of course, it's driven by the fitness and activity trackers, which are at a 15% penetration level. And that has been one of the holiday gifts that's been hot over the past few years. And they can do so much more now. Fitness trackers continue to be one of the most desired products in the smart wearables area as well. But there's so much more available now. Whether it be the smartwatches the smart scales, even hearables are up there on the list. So these are the penetration rates currently in the US. But There is a note of caution here because this is another area where when you ask about risk versus reward, this is very risky to most people. And when they actually told us in open ended questions as to why they have barriers towards this, they're very articulate about their concerns, who is getting this personal data about my body and my life? Where is it going and what are you doing with it? I've told you what we have. Now let's talk about who has it. Not surprisingly, said it a number of times, this is a younger demographic, right? The median age is 44 years old, and a good 39% of them are in that millennial generation 25 to 39. The others tend to be in the Gen Z, so the 18 to 20 fours and the Gen X just above the millennials. Household Income median is $86,000 40% of them, make $100,000 or more and 43% have children. It is gender neutral, male and female. If you look at parents the other way, 70% of all parents have some form of smart tech in their life. So that says, obviously a great target to go after, if you will. And they do skew towards professionals: managerial, finance, business, they also hold the value of saying that their work is not just a job, it's a career. What other values do they hold? They identify themselves as sophisticated risk takers. And that is also seen in their investment strategy as well. They're on trend. They like to be current about what's hot today. And they're often the first to try new things among their friends. And when they find something they like they actually recommend it not just in technology, but also in autos and travel as well. And they're very image conscious. They believe that what a person owns actually says something about who they are. So when it comes to technology, we consider them techssorisers where their technology is one of their accessories. We study a lot about what they do in their leisure time. And I just wanted to tell you a little bit about this so that as you're creating new technologies, you might think about how you can tap into some of their free time. So more than the average American, this group of people are civically engaged. They do things like attend public meetings, they make speeches, they are more likely to be remodeling their household, which is where those smart appliances come in, and they do enriching activities in their free time. They go to art museums, they attend adult education. They even play chess, and they love to go out at night. They go to rock concerts, as well as operas and they're creative. They do photography moviemaking, scrapbooking, and they have very active lifestyles. They're joggers and bikers and kayakers, they do aerobics, they play basketball, and they're into fantasy sports. And not surprisingly, they over index for flying drones. As shoppers, they more than the rest of America find celebrity endorsements appealing. When they walk into a store, they're holding their cell phone to comparison shop and use mobile coupons. They love to read about tech, they read online reviews and they post online reviews as well. When it comes to how they do media, they're actually watching streaming video often in non-ad-enabled places. So it's can be difficult to reach them through traditional television because they're also commercial skippers. They go to the movies more than the average American to all genres, which could mean that cinema ads could be a place to reach them.

Karen Ramspacher 

As I said, we go into depth about media with the MRI survey the National Consumer, America. So I can tell you that they're not surprisingly heavy into using the internet. They read a lot of print magazines. They see a lot of outdoor ads and their medium on traditional TV, radio and newspapers. These are some of the channels that they tend to skew for. And you get the sense here that they're into the lifestyle publications like Southern Living or Taste of Home, as well as an interest in sports from ESPN and Sports Illustrated. They also have children, as I mentioned, so the over index for a lot of the children's television as well as having a sense of humor with Comedy Central. In terms of radio formats, it's Adult Contemporary, rhythmic and Christian, that they over index for. So talking about audio, let's just take a look at digital assistants for a second, 26% of Americans own at least one smart speaker. But if you own one, the majority actually own two or more. I know I do. I have one out and one in a drawer. I bet you guys do too. Now this is another one of those areas where it's more risky than it is rewarding because there have been a lot of stories in the news lately about how they may be listening. And you'll see that reflected in what Eric's about to say. However, interestingly, Gen Z or the group were more likely to see this type of technology as more of a reward than a risk. And the truth is 47% of us in the US, if we own a smart speaker are actually integrating it into our daily lives. Now for the ones who are not yet doing that, we asked, why are you not? And the answer was 85% said, because I need you to protect my personal privacy better. Now, I wanted to play just a little fun clip for you about how people are having fun with their smart speaker and how the digital assistants are having fun with us.

Video Audio

Please clean up the house. Clean up the house added to your to do list. Which presidents have been assassinated? Presidents instances that are assassinated our Jones F Kennedy, Adolf Hitler, Abraham Lincoln, William McKinley and James Garfield.

Karen Ramspacher 

So obviously that last one was a joke. Thank you for laughing. So, audio is definitely the number one thing that people are doing with their digital assistance today. And so playing music is number one. And I can tell you that the platforms are all quite popular among people who are listening to music. There's Amazon Music, Spotify, Pandora, YouTube music, and iHeart Radio are among the top platforms that they're listening to. And of course, answering questions was just the example from the tape. In addition, they're also asking getting daily information: weather, traffic and news. But what I want to draw our attention to is this controlling of devices. 44% are already doing that through their smart speaker, and they'd like to do it more, which actually leads to the next point, they would like 55% of Americans want their devices to communicate across brands. So what they're saying is please do not build walled gardens help me make, again, my life more seamless with this smart technology. We've talked about what exists today. And I'm happy to tell you there's a big opportunity here, and Eric will tell you how to develop that opportunity. today, 61% already own one piece of smart tech; 50% plan to buy one; and 12% of those people who plan to buy are newbies and had not yet purchased one. So it's a growing opportunity. And you can see here, the desires that they have what they plan to buy. It run the gamut from smart security, to energy to appliances, to entertainment, even health and those smart speakers. So what's holding them back? Well, today, one in three Americans say that they don't believe that the smart home technology are currently solving a problem for them. And that's on us to explain to them, what is the real benefit that your technology has on my life today. In addition, there are grave concerns about personal privacy, which Eric's about to illuminate. And its strongest in the areas of the smart speakers, the digital assistance, as well as anything around my body health tech and wearables. I mentioned that cost is the biggest barrier for the smart appliances. It's also true for anything in the energy category, and communication issues, kind of cross all the tech systems, they want them to be integrated. So now I'm going to ask Eric to come up and talk about how we can build trust in these these technologies.

Eric Wagatha 

Thanks, Karen. So the remaining time, let me cover four key principles that you all should take away from the presentation. Today, we're going to talk about safeguarding, connection, influence and aligning with personal values. Now obviously, it starts with safety. guarding. We've talked quite a bit already about issues on data, David privacy. But what I want you to take away from this theme of privacy and concern and perhaps uncomfort with technology, this is part of a larger narrative happening in the us today. 46% of Americans tell us I am always concerned about my safety and security. Okay. This goes to personal safety. This goes to things like bullying that we hear quite a lot about, right? Terrorism, shootings, right? We talked about some of the key components of smart tech and vehicles being safety focus. So this is a truly a macro theme that is really fundamental to Americans today. And what I want you to take away from this slide is it pretty much spans the generations right now. I also want you to focus in on millennials, they're at that 53% it spikes, they're naturally millennials right now or in that family life stage. So that safety dimension of the extends not to just themselves, but to the safety and security of their own children. Now, of course, what we can kind of identify and work with today in this meeting is really more about what technology can do, what it can, what role it plays. And obviously, around this idea of personal information that we've already talked about, I mentioned earlier on that this concern is grown two fold in the past 10 years. Yet again, I want you to look at the generational factors here, and especially the bookends. Probably natural for us to think, well boomers, they're a little bit older, maybe less comfortable with technology. So and they may not know the ins and outs and the Okay, they're more concerned. But look at those Gen Z's right there. It's just as critical. So what we're actually finding out is consumers, our youngest consumers, those who actually know the most about these technologies, and what they can do are also more aware of some of the potential pitfalls. I do want to communicate, look, this is a global trend. It's happening in every region around the world, okay developed, developing, etc. And that's really not surprising, because the majority of heavy data centric brands generally have a global footprint. So we do see this as a global theme. Turning back to the US, we're at a point now where data skepticism is actually the plurality and consumers are pointing their fingers at the brands out there. 58% believe that companies know too much about them. What information are they getting access to? Who are they sharing that with? Where is that information going? These are unanswered question for the most part. We expect this thing to actually grow as AI is increasingly in the crosshairs right now, 53% of us actually feel threatened by some of these wonderful devices, beneficial devices that you talked about just earlier on. Our smart speakers and our smartphones, right? The fact that a piece of technology is listening intuitively has a measure of invasiveness, we see words like "creepy" in responses. What are they listening to? Why are they listening to it? I have a sense of intrusion. Right? Now I understand we have technologies we can switch some of those microphones off. But the reality with consumers, perception is their reality. And so the key point here is these concerns are actually starting to impact behavior. When almost 40% of consumers tell you that they feel their personal data is not safe. You know, they'll take some action on their own. And really, there's no place clearer to look at and what's going on in social media. Okay. As of today, no more than 31% of teens our most active consumers in social media are telling us that they're comfortable posting personal information on the social media sites. I just want to be clear, that's down 14 percentage points from 2009. So meaning teenagers are getting smarter and are posting less. Okay. Now let's look at the automotive side. Three out of four consumers from the study you cited earlier on, are actually concerned with their cars being hacked.

Eric Wagatha 

I'm concerned with my car not running out of gas. Hacking today is actually a critical issue. Think of the level of autonomy and assist vehicles have today there are certain features, right? Lane assist, park assist, but we're nowhere near a level of full autonomy. And already we see these concerns that do need to be assuaged at some point. Okay, so here's the deal, folks. We need to turn these concerns, these fears, actually on their heads and see these as opportunities to build that trust. Right? We hear quite a lot about concern, concern, concern. My privacy is being invaded. I'm being recorded. Where is that going? Consumers are saying you know what, at least let me know they are opening the door. They understand the benefits of sharing information. They want to be acknowledged, they want to be informed. What are you doing with that information? And to what benefit? It's quite clear, you made the example about insurance, there is a monetary reward for sharing that data. It's a little bit unclear when we're talking about sharing a whole bunch of personal information from smart speaker in the kitchen. Okay. But this extends to really that reconciliation. I would like the ability to deactivate what they're saying is give me control. Let me be part of the solution. Educate and for me develop features that are easy for me to use, then be the decider of what gets shared and what doesn't. Okay, that's the first thing. second theme we need to do is build more human connections between our technologies, our brands, and with our consumers. Now, look, we live in a day and age where instant on instant access is the norm 63% of consumers say, you know what I really need the shops and services. I used to be accessible at all times. And as we talked about early on, we have more and more of these devices are enabling us to do that. Right now, smartphone, computers, even our assist devices are becoming increasingly part of our culture. But the key point here, folks, is we're in a transitional phase. And what we didn't really talk about is also the different levels of adoption across generations. You mentioned earlier about interfaces and vehicle and people want different kinds. It applies to other technologies as well. There's a different comfort zone across different levels of AI and assist technologies. And we need to consolidate that what we need to do is put a more human face on these AI power tools. Case in point. So Nike launched their Nike fit app not too long ago, and it's essentially a new way of buying a shoe right? How do we buy shoes today, we go in the store and if we haven't for a while we put ourselves our foot in that that really cold metal device there that measures the size of our foot. And then we go look at shelves and whatnot and try and choose. Nike does develop a image scanning device, an app that allows us to go to photography, scan your foot, measure your foot and provide recommendations to you that are more customized. Now what Nike could have done is launched this out in the ecosphere and let the consumers have that, right. But they recognize they're asking for a behavioral shift. Maybe it's real easy for a 22 year old, maybe not. But what they did was arm their in store assistance with this device with this app, and ushered in a new methodology of shopping for consumers. Now, there's nothing more powerful or more natural than voice and we've actually talked about it. We're in the infancy stages, folks, right? Asking for news, movie review, right? Play music, we are just at the beginning. There's nothing more natural, more intuitive than The power of voice. So we're starting to see an evolution of application of how are we using this not just as a control device, but truly as a communication and interaction device. So here's an example from bevmo, which is an alcohol distributor in California, leveraging Alexa in aisle to interact with customers and help provide recommendations for whiskey. That's your thing. For different occasions and different tastes, so I want you to take like we're really at the infancy stages of where we're going with voice and I want to give you a quick look here of where things may go.

Eric Wagatha 

Open door.  Wrong voice command,

Video Audio

Wrong voice command. Repeat back. I didn't understand that. 

Eric Wagatha 

Okay, certainly cheeky ad, but really identifies we still have some ways to go and really connecting with humans and human interfaces and behaviors. But the key point here, and what's meaningful about that it actually brings up a very meaningful issue and challenge for AI in the future. And the fact is, as I look at this room, I see different faces. I see different individuals. We are all different in people. And right now AI in some ways is still struggling to make that identification. Ai needs to account More accurately for racial and cultural biases. Certainly in the media right now, there's a lot of discussion around facial recognition. In our research, we're actually seeing that American consumers see facial recognition as more of a risk than actually a reward to them. You probably all read about what's the typical situation of a self driving car and an accident, right? Who should a self driving cars try to spare? in case there's a fatal accident? I mean, that's a lose lose situation. But actually, if you were to talk to cultural anthropologists, they would tell you, it's not clear that answer may actually be different in different parts of the world based on cultural norms. Okay, so we still have a long way to go. But beyond AI, technology can truly be a force for inclusivity right? Right now there are over 1 billion people on this planet who experienced some form of disability Whether it's communication, hearing speaking, physical, which leads or prevents mobility, or even things like ageism, right, or dementia, these are hard opportunities to create innovation to improve people's lives. In fact, in our automotive study in the US, where we ask consumers about what are the key benefits of self driving vehicles, number one is increased fuel efficiency. So good, equal responsibility. But number two, is a recognition to providing equal access, driving freedom for the aged or disabled. That's where consumers heads are at. I want to encourage your minds to be there as well. Okay.

Eric Wagatha 

Third principle revolves around influence.

Eric Wagatha 

Now, as marketers, we try to manage our communications try to manage that connection with consumers, what they learn and what they feel about us. But it's certainly getting a lot a lot harder right now. almost feel 50% of global consumers actually tell us, you know, what brands and advertisers and retailers have less influence on my purchase decision than ever before. And in other words, how consumers feel about your brands is increasingly out of your hands. So who to consumers turn to? To tell them the truth? You know, not surprisingly, it's potentially groups and organizations who may not have a immediate and direct, you know, sort of desire at commercialization or access to your wallet. So academics. So I see a lot of ads with folks in lab coats out there, but academics, NGOs, charitable organizations, right, make a lot of sense in terms of expert and influence. I do want to point out, and especially for the US, look at where businesses and my country's government I talked about earlier about our trust deficit or government, I also mentioned the idea of the brand door being open to rent so there's definitely room for improvement. But I want you to take away from this this slide. That part of that expertise and influence needs or requires brands to look outside of themselves. In fact, when you talk to consumers, their mind is already elsewhere, right? They're recognizing the power of p2p of outside influencers, our fastest growing influencers, and helping us make shopping decisions in the US. user reviews, expert reviews, and not surprisingly, in social media. And I'm showing you here over here on the right, our millennial sit, right, we talked earlier about them as sort of the sweet spot the target for smart, smart technology. Not surprisingly, they rate much, much higher on that x outside influence. So who are today's influencers? I'm not talking about the Kardashians and people on Instagram, I'm talking about a new wave of influencers that are a high powered, that are software based, that live in a digital world. And in an analog world. There are people that I call them people Like little Michaela in the US, and Emma in Japan, these are actually software tailored to not there. It's not just promote a single minded message but to have a personality. These folks also have followings amongst our youth, and are seen as influentials. Even though consumers completely recognize that they're artificial constructs. Why do we think this is more than maybe just a marketing fad for now? Because in an age of trust, an AI powered influencer won't let you down, right? Their programmed to be consistent. So kind of an interesting twist of where we are with software and trust. Okay, and so this commingling of the real and virtual, I think is a theme we're going to continue to see growing now kind of thinking about in the automotive sphere. We're seeing experimentation, right. We already have digital assist in vehicle, but we're starting to see experimentation and innovation around sort of bringing avatars bring a little more human touch and facial expression and gestures to interacting with the driving vehicle. The idea is it improves efficiency and ideally improves safety and driving. And so the fourth principle, and certainly the most important one is about values alignment. Right? And this actually has been gone for quite some time. Look, we live in a world of abundance, a world of riches. There aren't in the US at least too many bad products. consumers want to connect with your brands, really on a higher purpose on a higher level, not just what you do. But why do you do it and why is it meaningful? And why does it align with my attitude to life, we're especially seeing this with younger generations who are more focused on social responsibility and openness to different ideals and different cultures. So we're starting to see how brand selection is increasingly being impacted. Did by a desire to seek brands that show values alignment.

Eric Wagatha 

A couple key values I want to talk about.

Eric Wagatha 

In our studies, we track over 50 personal values around the world, the top two that are pretty consistent across all markets. They're ranked usually one, two or three out of the 53 that we track, honesty and authenticity. Now, when we talk about authenticity, we asked, we're asked a lot, what is authenticity being true to yourself. But being true to yourself, is also recognizing what you're good at what you're not good at creating a message that's very candid and true. Honesty is probably the most important because we're at a stage right now with how we accelerate and bring technology to market that we've almost using. And I don't want to say this in a malicious way, oftentimes using the marketplace for beta testing, okay, now, we need to be transparent about that. That we need to be selective of which consumers we want on board. But we also need to be very frank with what a product can and can't do. And so we see that honesty and authenticity are critical. We also see that what brands need to do is look at these as purposes as part of their vision, right? listening in means not just to your customer, but to those of you are those employees who actually are there to make those products and services. We need to look out what are the social issues in our various environments that we need to take into account and have an impact actually our product and brand vision and we need to avoid woke washing, and this is where we take social issues and flip it into simple marketing activities. We hear from consumers, you're going to be found out today if your brand purpose is a marketing ploy, it really needs to be endemic to what the brand is and what brand roles tends to be okay. So I want to leave you with an example of a brand that has evolved its perspective in the past 10 years. And rather than talk about it, I want to show you an ad from 2007 that this this company created, and then we'll come back and show you how they revisited that same ideal with a modern look at the world. Many of you feel bad for that is because you're crazy feelings, and the new one is much better.

Eric Wagatha 

Okay, so so that's IKEA 2007 you know, mass consumption, right pre recession. Let's go buy buy buy. Let's throw away the old and get the new. Let's have a look at IKEA more recently they revisited that same ad. But if we think about where that brand is going and more towards a positioning of ecological responsibility. Many of you feel happy for the slum. That's not crazy. reusing things is much better.

Karen Ramspacher 

It's great. I just love that little girl. And he's so funny at the end. And it actually is a note that we'd like to plant with you to think about how to upcycle and recycle the technology that you make, because especially for the millennials and the gen Z's after them, it's a very important principle. So I'm going to summarize in the last two slides, the things that we've told you today what you need to know. And then what Eric told us we could do so quick, bringing it all together ownership of smart tech overall is growing, which is good. If you're in this room. It is for sure. A youthful opportunity millennials today. Gen Z tomorrow. And they reward the education that we do anything from the recycling plan, but even how the technology matters to me today, and what can it do for me, and the transparency as part of that what you doing with the data there, which leads to the fourth point, there is definitely a trust barrier. So with the trust barrier, what do you need to do in order to get over this, this is the summary slide. It's basically about safeguarding, which means guarding my data, not just today, but storing it safely into the future. It's not enough to do it. Now. Make sure that it's safe forever, because you've got it and it's somewhere in your cloud. The connection piece is really about layering in the human touch so that you can start to build that trust relationship. And you have to do that not just in how you make the product but how you talk about it too and influence a lot At times, in order to build the trust relationship, we have to turn to networks that are well outside our control, whether they be academics, or those virtual influencers, and just let it know that we've got to let it go. Because it's not ours anymore. It's theirs. And finally, values is the most important thing. And it has been for years, Eric's been talking about it. It's about understanding the people that you want to be interested in your product, what are the values that matter to them, and aligning truly aligning your product and brand with those and then letting them know it? It isn't enough just to say it, you have to do it. So with that note, we're going to open it up to questions. We have about four minutes left on the clock. Thanks so much. Good job. Good job, man.

Karen Ramspacher 

Anybody have a question? Yeah. What's the question?

Speaker 1

So, stem cell research, the perception is it's not yet safe. A lot of people are concerned about it. So the question is, what do I do? What do we do about it?

Eric Wagatha 

And that's a fundamental issue between the monetization of technologies versus what we're developing is more the idea of what's considered ethical innovation. Right. It's not a question of what can't be done today. It's should we be doing it? And I'd say Unfortunately, the academic sphere is probably does not have the ammunition, the shield to defend in some ways against those with deep pockets. So I think that will continue to be an issue. What I love to see is more aligning frankly, between corporations and academic to find a happy moment. And there are actually groups being developed MIT the humane, humane Innovation Group I forget their name, thank you, you know, that are starting to promote this this ideal so I think we're really at the infancy stage. But honestly, until the probably the fast past 510 years, we weren't at that point of innovation where this truly became, you know, a moralistic issue. So it is unresolved right now. It won't be a fast solution.

Karen Ramspacher 

Hopefully everybody will take that slide. We're academics are at the top and like take it to their companies. Like see we gotta stop

Eric Wagatha 

You need you need your virtual influencer to help you out for that one. Yeah.

Karen Ramspacher 

Any other questions? Okay. Oh, yes.

Eric Wagatha 

Well, I mean, look, I mean, it's it's, you know, part of the media's What do you want to call it role? Is this amplification, you know, and and so I think they're they're part of their perspective is to bring this to the forefront, you know that the reality is right now. And it's a bit of a hard discussion because the media is going to promote, scare tactics scare stories, there's research that tells you negative stories get eyeballs, right. But the key point to take away here is there is a gap between consumer and technologists. Look, you can read the full instructions, right and all the release and find out Oh, there's actually quite a lot of security features built into some of these technologies. But we're building that from a technologist point of view, right? We need to bring it more from an everyday consumer that's not going to be thinking about that I'm in the kitchen and Should I turn it on? Turn it off? Turn it on, or should it turn off? Right? That's not natural. And that's why we the steam of natural and connection really applies more holistically to turning this, this chip this plastic into something that really has more the consumer as the focal point, right? What does the consumer need not? What can we build? And then ultimately, what problem can we help find to have it solved? So again, there's a lot of progress. And I'm not I don't want to in any way, you know, you know, kind of push down all the innovation that's happening out there. But my point it's not for lack of awesome features and benefits is where's the consumers mindset. And right now we are seeing there is a bit of a gap.

Karen Ramspacher 

Well, and let me add in the last 10 seconds, make it easy for me to be safe and be transparent about what you're doing with my data. If you take nothing else out of this room, and think of the young people when you do that, and we're out of time. Thank you for coming today.

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