Interview: CEO of CES 2017 on the Future of Connectivity

The year 2017 should go down in history as the breakout year for ubiquitous connectivity.

Over 175,000 people swarmed into Las Vegas earlier this month for the 50th annual CES 2017 technology show, where more than 4,000 companies promoted their most advanced products in 25 themed marketplaces ranging from Baby Tech to Drones.

The big message this year emphasized that everything is eventually going to be digitally connected, and the promise of the Internet of Things is now real, especially in automotive and residential design. The most high-profile marketplaces at CES 2017 were Self-Driving Technology and Smart Homes, occupying a disproportionate chunk of the 2.8 million square feet of exhibit space.

However, the driverless cars really stole the show, positioned equally as both autonomous vehicles and online hubs integrated with artificial intelligence platforms. IBM defined that as cognitive mobility; Panasonic called it smart mobility; and Nissan referred to it as intelligent mobility. Volkswagen’s new I.D. car was promoted as a portal for “connected community” with “intuitive usability,” while Chrysler launched a new smart minivan called Portal.

The travel and tourism industry has never been a major player at CES. According to Gary Shapiro, CEO of the Consumer Technology Association, which produces CES, that’s changing. He said, for example, Carnival CEO Arnold Donald this year was the first travel industry chief to ever give a keynote speech at CES.

If you want to see how travel brands envision the future of consumer engagement, watch Donald’s CES presentation about Carnival’s new wearable Ocean Medallion. Much like Disney’s MagicBand, the device is designed to help cruisers personalize their cruise experience to unprecedented levels before, during, and after the voyage. It also helps Carnival’s 10 cruise lines collect consumer data, deliver messaging, and potentially upsell the bejesus out of ancillary cruise products in real time like never before.

“The ship is one large mobile device,” said John Padgett, chief experience and innovation officer of Carnival, referring to the Royal Princess ship during Donald’s keynote. The ship was outfitted with more than 7,000 sensors and 4,000 new video screens to support the Medallion user experience.

Shapiro called it a “smart city that’s mobile.”

The C Space Storytellers forum based at Aria Resort was still relatively lacking in any significant travel industry programming. Now in its fifth year in existence, C Space was created for media, marketing, and technology leaders to convene, promote products, and listen to presentations given by tech giants such as Amazon and Google this year. There’s definitely an opportunity there for more travel industry CMOs and CTOs to participate. Consumer Technology Association should also boost its exposure of C Space programming on the CES site.

We spoke with Shapiro for additional context around the future of connectivity, and the future of CES itself.

Skift: The big breakout theme at CES 2017 was artificial intelligence-powered connectivity, especially in terms of smart cars and smart homes. What’s driving that, and how do you see it impacting the travel industry?

Gary Shapiro: Technology changes rapidly and there’s definitely a shift toward connectivity that provides 24-hour access to information aligned with individual needs. That’s one of the driving trends and that’s going to impact every industry in a very big way. Every aspect of our lives are now connected: health, travel, sports, gaming, our homes, our cars — everything. At the same time, we saw that one of the big themes of the show was voice recognition technologies. The next stage is obviously going to be voice responsiveness. The technology has improved so much so quickly that voice is now an important mechanism in our lives. Artificial intelligence contributes to that, so not only can you now communicate with your devices by voice, but they’re now responding more and more creatively and intelligently to what we need.

Going forward, we’re looking at 5G technology and smart cities. Carnival is kind of an entryway ramp to that. Every company is now a technology company at this point, and Carnival figured that out, and so they’re basically a smart city that’s mobile. In the hospitality industry, it’s increasingly about technology. In my personal view, the hospitality industry has been a little slow to adopt technology. I remember the difficulty trying to convince them years ago that HDTV was coming with thinner TVs and 16×9 aspect ratio. I think increasingly consumers are judging the quality of their travel and hotel experiences by their ability to have access to basic technologies, including Wi-Fi. I used to talk about remote control 25 years ago. Now it’s about what kind of broadband you have, and what kind of technology you have throughout the hotel and travel experience.

Skift: You’ve continually emphasized that CES is about what tech can do versus the tech itself. Can you expound on that?

Shapiro: CES 2017 was basically talking about how connectivity and technologies are not only solving some of the biggest problems in the world, but they’re also enhancing the experience for everyone. It’s all about the experience economy. The experiences that technology provides is very, very important, rather than just the backroom aspects of running things. It’s just as important to focus on the consumer interface and how we’re experiencing things.

I was flying back on Delta, and I used miles to upgrade to first class, but by the time they got around to ask me what I wanted for lunch, they’d run out of what I wanted. And I’m an elite flyer with Delta. I think if this was Carnival running this airline, they would know what I wanted. They’d know who’s in their first class cabin, and they could get you the right lunches without disappointing you. I was thinking, wow, the airlines really have to get onboard with this as well.

Skift: Overall, how are brands at CES innovating their experiential marketing strategies?

Shapiro: We had almost 4,000 exhibitors and every one of them was trying to present their image to the world in new ways, including demos all over the show using video and audio, and listening rooms and visual rooms and theaters, and things like that. In terms of what the technology trends are in experiential marketing, it’s virtual and augmented reality, 3D printing, and all of the different platforms that were at C Space, like Facebook, Twitter, Google, and many others. Everyone’s focusing on how you market differently, and as one of the keynoters said, it’s not just a matter of targeting people with emails. The problem isn’t getting enough marketing out. It’s a matter of changing the experience that people have.

At CES, the face-to-face experience is what matters. You see these companies, how they market themselves to over 175,000 people, and it’s absolutely mind-blowing how people form perceptions of those companies in a live experience. Plus you have the advantage of serendipity and learning things you didn’t expect, because innovation is really the concept of converging disparate ideas in a new way.

The CEOs love to go to the show because they find it inspiring, and the companies who succeed there are no longer trying to do everything themselves. They’re partnering much more, so there are a lot of new technology partnerships. The auto area of the show, for example, has fundamentally changed because they’re collaborating with outside companies in all different ways to create an entire new auto ecosystem.

Skift: Last year, autonomous mobility seemed almost like science fiction, or at least it seemed like it was years away from practical implementation. This year, driverless is reality. Did that surprise you at all?

Shapiro: Honestly, no, because I’ve been dealing with these companies for years. This is a reality, like you said. The self-driving car is absolutely real. There were a lot of passive devices a few years ago in terms of if you’re departing lanes, the car vibrates or beeps you, but that keeps evolving. Like, if you’re falling asleep, the car will wake you up. I bought a new car a few months ago and that’s a feature. One time, I was looking down at something, and I came upon a car and my car took over; it braked for me. It’s not all or nothing today, though. There are many steps to the self-driving car, such as active collision avoidance, which is now standard in some cars.

To get to a fully self-driving car, there’s a lot of complexity there to resolve. There’s tough weather issues, and issues when something is in the road and you have to divert, but a lot of keynoters and speakers I heard addressed that. Yes, self-driving cars were definitely a major growth area at the show, and we had over 150 automobile tech companies there. There’s a battle for who will lead it, but our research shows that three out of four drivers are looking forward to having lower insurance premiums, having a way of dealing with aggressive and drunk drivers. The disabled and senior communities are totally jazzed about this.

Our goal, and the way we’re urging President-elect Trump to address it is to set a goal for the number of deaths that are avoided in a year. Right now there are 35,000 deaths per year in the United States due to car collisions. Let’s get that down by 20,000 or more to a specific measurable number.

Skift: How has C Space evolved since it launched?

Shapiro: We just started in 2013, and we called it Brand Matters. That drew over 5,000 attendees so we knew we were onto something. In 2015, we rebranded it as C Space and gave it a headquarters at Aria hotel where they attracted attendance at 20,000. For CES 2017, we estimate about 35,000 people were there from the advertising, marketing, and entertainment world. We had 155,000 square feet of exhibit space and a C Space studio, and all sorts of different things. There were a lot of celebrities there, and a lot of the cable industry was there. The cable industry show shut down so they’re going to C Space now. We had the women in cable event that had amazing participation, and Spotify, Facebook, and Turner did something big. AOL, Twitter, and Amazon keynoted.

In terms of 2018, I’d be lying if I said I knew what to expect, but C Space is definitely growing into a whole new kind of experience for CES. There are CMOs attending from all sorts of companies, like Proctor & Gamble and people like that, because it’s such a different world in marketing now.

Skift: Let’s talk about the long-term legacy impact of CES, above and beyond the immediate visitor spend. How is CES evolving as a business development accelerator and attracting outside investment and tech talent to Las Vegas?

Shapiro: CES is the largest innovation event in the world, and it’s the largest trade show in the world, but it’s really at the CXO level where people come from every different industry to see the intersection between their worlds with the future of technology. Technology affects everyone, from agriculture to broadcasting to automotive to content to travel to leisure to everything, so we’re seeing an incredible array of CEOs from every different industry. I mean, people like Rupert Murdoch and others have been coming for years, but now it’s all the auto company CEOs, and so many of the Fortune 500 are there.

Obviously that’s a huge impact on Las Vegas. I think the city is now a place where people go to learn, to be inspired, and develop relationships, and it’s truly the centerpiece of innovation for the year. Las Vegas is about seeing the future and helping people start the year right, but also to plan and think of things that they’ve never thought about, which is what innovation is all about. It’s a huge opportunity for thinking outside traditional boundaries, and we try to design it that way where it inspires people to create business relationships they would not otherwise have had.

Skift: We attended the event where you and Rossi Ralenkotter, CEO of the Las Vegas Convention & Visitors Authority, spoke about the Las Vegas Convention Center expansion. Afterward, he told us that CES is helping Las Vegas attract tech companies to relocate and invest, such as Tesla, Hyperloop, and Faraday. How involved are you in terms of introducing your network to the local business community and elected leaders in Las Vegas and Nevada? Is that part of your role?

Shapiro: I would not have defined my job that way, but as a matter of reality, it is. But it’s not only us. There’s the National Association of Broadcasters Convention and there are other major shows that drive that as well. Then there are companies like Zappos, for example. They moved to Las Vegas from California because they were in San Francisco, which is a very high-cost labor and housing market. In Las Vegas, there’s no greater workforce, and there’s no greater value in terms of so many other things. So, in terms of getting tech companies to the city, the CEOs have exposure to all this learning and talent, so the city becomes a natural option for them.

Skift: Regarding the CES user experience, especially for first-time attendees, the show is overwhelming, and it’s difficult to navigate and understand where everything is because there are so many different venues. What are some of the successes and challenges when it comes to providing the necessary way-finding and content to help people navigate the show?

Shapiro: To navigate CES, we spend a lot of time and money on that, and we feel an obligation to push the envelope. The challenge is you don’t want to introduce a new technology that has not been tested on 175,000 people, so it’s not something that you can do easily. Not only is it expensive, but the risk is so high. We did a huge investment in beacons at C Space, and actually all around the show, but with C Space we actually took it up a level where we used a badge that people could communicate with to find out who they knew around them.

The biggest barrier right now is transportation, and part of that this year was because we were all there over a weekend. Las Vegas doesn’t need us on the weekend. They have all this weekend traffic that comes in, and all these hotel rooms that are filled. Now the next time that happens in 2023, we’re begging the city to move us away because the hotel rooms go up to over $1,000 a night, and we lost a lot of people that we wanted there because it was just too expensive for them. We don’t want Las Vegas to have a reputation as a high-cost city because you have so much demand on the peak nights for hotel rooms. We have to get away from the weekend.

In terms of moving people around, that’s a huge issue for us. There were some traffic issues that we faced and we have to get better at fixing that. We didn’t have any live police presence at major intersections directing traffic, so people were just relying on the lights, so we had some gridlock situations moving people around frankly, going back and forth between facilities. But generally we invest so much in “You are here” signs; we have an app that’s pretty sophisticated; we encourage people to plan ahead and set up their meetings in one location. We’re doing everything we can because we don’t know what the limits of the show are, but right now the limiting factor is definitely transportation and hotel rooms.

Skift: Speaking of limits, at the event with Ralenkotter, you said that CES will eventually top 200,000 attendees. That’s almost scary. Is there anything driving that growth besides the general evolution of technology and its growing impact on our lives?

Shapiro: It used to be that the show responded to both the economy and to the innovation cycle, and there was a time in the 1990s when there was a general lag in innovation. Now we have at least 25 different product categories, the pace of innovation is accelerating, and a lot of smaller shows have gone away. People are coming to CES because of its centralized focus on innovation, and we’re continuing to expand into other areas like hospitality and smart cities, so I guess I don’t lose too much sleep over the future success of the show.