Consumer Electronics Show

CES 2021: Pandemic Spurs Innovation in Consumer Electronics

January 19, 2021: The four-day, all-virtual Consumer Electronics Show 2021, while smaller than a typical physical CES show, still featured close to 2,000 exhibitors and more than 100 conference sessions. Presentation topics, along with the products on display, reflected an industry that has faced challenges over the past year, like any other. But consumer electronics firms have also innovated to help drive and support many of the critical changes implemented at record speed across industries.

“Everybody has been flying by the seat of their pants,” said Rick Webb, COO of Timehop, a nostalgia app, in a presentation. “It’s been radical improvisation as opposed to experimentation.”

Licensing had a relatively small presence at this edition of the show, although there were a number of licensors (e.g., Blaupunkt, AT&T via Equity Brands) and licensees (Spectra, Skoog) exhibiting. But a number of the trends highlighted at CES are having an impact on the licensing business. Following are our observations about some of them.

Staying Safe

The pandemic has, as expected, given rise to a number of tech products that support safety, notably sanitizing devices and next-gen masks.

On the mask front, exhibitors were offering high-tech versions that allow increased comfort and airflow, as well as connectivity. AirPop launched a line of consumer face masks that boast a better fit for all face shapes and improved filtration, airflow, and breathability, while Nexvoo was touting its clear smart mask, which provides UV light disinfection and integrates quiet, three-speed, brushless micro-fans.

Hubble Connected introduced the MaskFone, a medical-grade N95 mask with a built-in microphone and earbuds, as well as connectivity with the wearer’s smartphone. Even gaming peripherals maker Razer got into the act, introducing a mask concept design called Project Hazel, which has detachable active ventilators, smart ports that regulate airflow and filter out 95% of particles, a built-in microphone, and a clear design (along with lights for nighttime use).

A number of companies introduced products for sanitizing and disinfecting. Panasonic showed a NanoE air-purification device to make flying safe. Seoul Semiconductor exhibited Violeds, a UV LED light technology that disinfects within a second. Ubtech and LG were touting disinfecting robots. And a device called Blue uses electrolysis to produce 350 milliliters of disinfecting and detergent cleaning solution from 98% tap water and 2% natural ingredients in 10 minutes.

For public health, Clean Motion offered a self-disinfecting door handle, while Smart Sanitizer offered a kiosk that distributes hand sanitizer and also offers a screen for advertising messages. Steri-Write is a touchless sanitizing and distribution device for shared pens and styluses.

Some exhibitors were spotlighting products that are not COVID-related per se but meet needs that have arisen from a mostly at-home lifestyle. These included smart lockers for contactless order pickup, devices to protect packages from porch pirates, mobile production studios for high-quality remote streaming and broadcasting, and all-in-one desktop home offices that support working at home and help reduce distractions.

A Smarter World

Connected “Internet of Things” (IoT) technologies permeated more categories, use cases, and multifunctional devices than ever, and were often combined with robotics, machine learning/artificial intelligence (AI), voice communication, and the like. The marriage of AI and IoT, sometimes called AIoT, had a particularly high profile.

The Consumer Technologies Association (CTA), which owns and operates CES, reported that smart home products experienced growth of 17% in shipments and an 8% increase in revenues in 2020. Hot categories in the past year included smart speakers, displays, and lighting.

One area of wide interest, given the ongoing COVID-19 crisis as well as pre-existing trends, was digital wellness. The value of shipments of connected health-monitoring devices increased from $365 million in 2019 to $632 million in 2020 (up 73%), according to the CTA, which predicts the market will grow further to $845 million (up 24%) in 2021. Meanwhile, U.S. consumer spend on digital fitness increased by 30% to 35% from the start of the pandemic to September 2020, also per CTA.

Digital wellness devices take many forms. Just a handful of the many examples at this year’s show:

  • The Oura ring, which has been used by the NBA and UFC to help prevent the spread of COVID among their athletes.
  • Taison Digital’s Upmood, an emotion-tracking and self-awareness wearable.
  • Brightday, which fosters healthy posture and movement practices by monitoring the user through a camera.
  • Lify’s wellness drink brewer, which makes formula recommendations (with and without CBD) based on the user’s body conditions and the weather.
  • Bisu’s Body Coach home health lab, which allows users to precisely analyze their urine and saliva and receive personalized advice on diet and lifestyle.

A wide variety of exhibitors and presenters, from and Ultrahuman to WW (formerly Weight Watchers), were touting wellness-tracking apps, which increasingly monitor not just exercise and calories, but sleep, stress, and emotional wellness. Many also foster relationships between the user and live coaches, nutritionists, psychologists, and the like, as well as providing AI-driven recommendations based on self-reported and/or biofeedback data.

The smart beauty and fashion sector was also prominent among the exhibitors at the virtual show. Examples included technologies for virtual try-on (for jewelry from Deepixel and for makeup from Perfect Corp.’s YouCam); AI-powered perfume where each spray can be a different scent (Ninu); AI-based programs that analyze skin data, prescribe solutions, and supply personalized products (Art Lab, Lululab, Lillycover); and sensor-based measurement-capture programs (MySize).

As more consumers turned to home cooking in 2020, CES exhibitors offered a number of smart kitchen products, including several robotic cooking systems that can cook, clean up, and alert the customer when ingredients are running low. iWonderCook creates meals from fresh ingredients shipped to the user, meal kit-style; RoboEatz cooks more than 1,000 customizable dishes from up to 80 ingredients in as little as 30 seconds; and Moley Robotics’ robot chef can cook 5,000 company-provided recipes, or family recipes, emulating human skills using custom cooking implements, rather than cooking like a machine. Celebrity chef Tim Anderson was 3D recorded to develop RoboEatz’ algorithms.

Smart indoor gardening systems were also in evidence. Rise Gardens is a modular, app-guided, and WiFi-connected hydroponic garden for home use, including a new countertop-size model and an Alexa skill to allow system control via voice commands. The company says it has seen a 750% increase in sales since March, thanks to pandemic-fueled interest in indoor gardening. Similarly, Gardyn is a fully automated vertical produce-growing system complete with an AI-based assistant.

In the children’s space, exhibitor Skoog announced a deal with Sesame Workshop for an educational platform for young kids that combines interactive content and a tactile experience. It was just one of several exhibitors offering a variety of products combining learning and play, often with a focus on pairing interactivity with touch.

A few examples: Hancom and Roybi were promoting educational robots; Tonies showed its Toniebox, a listening device for kids 3 and up that is paired with collectible characters and has signed several content licenses in recent months; LudoTech was selling a board game enabled by OLEM, a robot that plays a different role in each game; and Dipongo offered an interactive storytelling application that also integrates manual activities.

Other smart products on virtual display included intelligent baby cribs, cameras, toilet paper holders, chessboards, earrings, a smart alarm to prevent drivers from accidentally leaving their child in the car; wearables with gesture control and fingerprint authentication; and a pet monitor that distributes treats.

Changing World of Entertainment and Sports

How consumers are enjoying sports and entertainment has changed during the pandemic, and that was a topic of conversation in several of the educational panels at CES 2021.

Responding to these transformations is a challenge, of course, but also necessary. WarnerMedia has attracted pushback from theater owners for its decision to release its 2021 films day-and-date on both its streaming platform HBO Max and in theaters. “It’s about adjusting to the pandemic environment,” explained Ann Sarnoff, chair and CEO, WarnerMedia Studios and Networks Group. “I have amazing films I would like the fans to see, and 60% of theaters around the world are closed right now.”

A number of speakers reported positive results from new strategies undertaken in the face of pandemic challenges. Stephanie McMahon, chief brand officer at WWE, for example, discussed how her company’s expanded content, which is distributed through linear television, paid and advertising-supported streaming (both DTC and third-party), and on social media platforms such as TikTok, has seen a spike in viewership. That includes an increase of 55% on the WWE Network and 70% on YouTube.

CES panelists noted that, with the COVID-fueled uptick in viewing, consumers are now spending more time streaming than on linear TV. Older demographic groups in particular have embraced the technology for the first time and are expected to continue viewing now that they have the infrastructure. Consumers are also using streaming for an ever-wider assortment of content, from cooking information and news to traditional entertainment. And viewers are looking for a balance of new, appointment viewing, bingeable library content, and recommendations.

Like TV, gaming also saw a surge in usage in the past year. According to Nielsen, 82% of consumers globally played or watched video games in 2020, as the increasingly community-oriented activity allowed people to safely socialize as well as pass the time. And esports also experienced a landmark year, even though live events, a core part of its model, were not possible.

In sports, the lack of live fans at games has made the second screen ever more important. The WNBA invested in creating a real second-screen experience throughout the season, leading to an 85% increase in engagement. “The second screen is changing everything,” said Cathy Engelbert, WNBA commissioner. She pointed out that not only does real-time gamification and data integration, fan competitions, trivia, polling, behind-the-scenes content, and the like increase fan engagement, but “everything you do is a sponsorable asset.”

Augmented reality is increasingly used effectively as a part of the second-screen experience, and on social media and other digital platforms generally. The WNBA integrated AR on Snapchat, as well as during its Draft Day broadcast on ESPN, for example.

Kenny Mitchell, CMO of Snap Inc., said a lot of brands were using AR on Snapchat. One effective tactic is to allow consumers to try on goods, from Gucci’s or Footlocker’s shoes to Sally Hansen’s nail polish, and then purchase directly through an AR shopping environment that emulates a physical store. He noted that AR, which is core to Snapchat’s business, generates 2.5 times the level of engagement and purchase intent as a typical video ad.

Several presenters addressed the need to create an ecosystem where all aspects of franchise management complement and enhance each other. Sarnoff cited WarnerMedia’s DC FanDome digital experience in August, which involved 500 creators, celebrated the diverse properties and products—movies, TV shows, consumer products, games, streaming content, etc.—tied to the DC universe, and generated more than 22 million fan interactions. She says WarnerMedia has weekly meetings to discuss how to collaborate on big franchises and present a unified front rather than siloing the different businesses. “You don’t want your fans to be able to see your org chart,” she says.

The coming together of different forms of entertainment can occur across companies and industries as well. “Music and sports have come into our world,” said Darren Yan, head of talent management for the esports organization FaZe Clan. Music festivals on game-centric streaming channel Twitch and inside of games such as Fortnite have popped up as alternatives to live concerts during the crisis, for example. “Even post-pandemic there is going to be a world where some of these things will continue,” Yan noted.

Live events, which were growing by leaps and bounds as a means of fan engagement, have not been possible during the pandemic. That has led to the launch of a number of digital options, but they have not compensated for the decline of that business. “We lost a brand’s primary way of making a real connection,” said Webb of Timehop. “Losing the events category is devastating and I don’t think we should ignore that fact.”

A number of exhibitors at CES were showing technologies to support COVID-friendly digital or drive-through experiences, as well as to foster tech-driven live experiences involving projection or VR, once those are possible again.

Retail Insights

Several key retailers spoke in keynotes or on panels about the challenges they faced during COVID, the role of the bricks-and-mortar store, and a number of other topics faced by store chains and other marketers.

One theme was the important role physical stores can continue to play even as e-commerce and contactless service remain critical. “Our stores became the hub of the omnichannel experience,” said Lauren Hobart, president of Dick’s Sporting Goods, who noted that 70% or more of purchases are passing through the stores in some form, whether through an in-store purchase, curbside pick-up, or ship-from-store. “We feel the store is a critical part of our future.”

Similarly, at Best Buy, even as online sales ramped up by more than 175% by the third quarter, compared to before the pandemic, 40% of the purchases are still being picked up in-store or curbside, according to Corie Barry, CEO. “The store will have a massive role in fulfillment,” she said, adding that there is also an experiential need for support that is best filled by a physical store. “When we re-opened, customers gravitated to the stores for more complex sales where they needed interaction and consultation.”

Alibaba Group’s Tony Shan, head of Tmall Global in the Americas, talked about the ability of a marketplace like Tmall to give brands data about who is shopping, where they buy and how often, micro and macro category trends, and the like, all of which help analyze and guide future planning.

Not surprisingly, the use of data was a topic that came up often throughout the show. “We have to understand real-time data to know where our customers are in their journey and deliver up content that is interactive and informative,” said Adrienne Lofton, vice president of North America marketing at Nike.

“We can utilize data to create intimacy in so many different ways,” said Mindy Grossman, president and CEO of WW International. “Technology also enables you to be more agile and nimble and learn in real time so the investments you’re making are as strategic as they can be.”

The retailers at the show also talked about purpose, a hot topic among all marketers today, ranging from staying true to a company’s core—enriching lives through technology, in the case of Best Buy—to making progress toward diversity and sustainability goals. “If companies went into the pandemic with a strong sense of purpose, they were able to double down on it in a time of crisis,” Barry said.

Mitchell reported that 82% of U.S. Snapchat users believe they have a personal responsibility to create change. As a result, the company has developed content, such as shows highlighting the unique experiences of Black citizens, and tools, such as a big push for voter registration. Data shows both efforts have performed well in reach and engagement.

“To be purpose-driven, you can’t be afraid of making mistakes. You have to take risks,” stressed Lofton of Nike, which took a leadership role on diversity and inclusion by partnering with Colin Kaepernick at a time when other companies were running away. “Nike wanted to begin the conversation and let others follow,” she said.

Doug McMillon, president and CEO of Walmart, noted that purpose-driven initiatives encompass both internal and external elements. Walmart has augmented its internal efforts on sustainability and social responsibility by bringing its partners throughout the supply chain into the process (e.g. by requiring them to meet certain milestones). “We can apply that model to racial equity,” he says.

Coresight Research found that 56% of global consumers are willing to pay 35% more on average for sustainably made goods, and such products not surprisingly had a notable presence at the show. The eco-initiatives took a variety of forms: Samsung announced eco-packaging for all TV products and a Galaxy Upcycling at Home program where, the company says, users can decide how to repurpose their Galaxy phones as other home devices. Ecojoko touted an AI-powered home energy monitoring device that it said could reduce electricity consumption by 25%. Woodoo makes high-tech products such as smart surfaces from wood rather than plastics. And Hydraloop added to its line of water recycling products.

The pandemic spurred innovation, not just in sustainability but in business models, the supply chain, marketing, and other components of the consumer electronics industry. Observers expect that to continue. “The pace we’ve been moving is a different pace and I think it’s sustainable without too much fatigue,” said McMillon of Walmart. “I think the run rate going forward will be faster because of what’s happened.”