State of Change: Five Industries Facing Continued Consumer-Driven Disruption

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– Hello everyone. I am Matt Britton. I am the CEO of Suzy. I hope everyone here can hear the audio. I just saw somebody ask if
they could hear the audio. I'm assuming you can, or
my team will let me know. Great. Thanks Abel. I'm Matt Brighton the CEO of Suzy. Welcome to today's webinar. State of change, five industries facing continued
consumer-driven disruption. I am joined today by a special guest and a good friend of mine, Jeff Colon. Jeff, why don't you pop in
from cyberspace or you are. That was a quick and easy. Head of Brand Studio, at
Microsoft advertising. Good to see you, Jeff. – Good to see you too, Matt. Thanks for having me. – And you are in Seattle right now. – I am in Seattle, yes. – Okay. And how's the weather in
Seattle this time of year? – It's getting better.

Let's just say that. Starting to be outside a little bit more. – Well, I certainly miss
all my time out there in the Pacific Northwest with you and all your colleagues. So it's good to see you again and really looking forward
to today's webinar. This webinar's a culmination of a pretty comprehensive research study that Suzy partnered on
with Microsoft advertising called state of the five. And the impetus behind state of the five is really to identify five key industries that were really facing
sort of disproportionate consumer-driven disruption. Obviously we've been through,
you know, quite a year. In fact, I think we're almost today to the date one year ago,
when all the craziness, started to hit the fan, so to speak. We all remember that night. I think it was March sixth or seventh. When you know, it was announced that Tom Hanks contacted COVID and the NBA started canceling games. And then all of a sudden we went from what is this going
to be, to oh my God this is gonna be something
like you'd never seen before.

And here we are a year
later, still on Zoom still talking to people remotely and still talking about disruption. Because I think disruption is something that we're really just starting to see the beginning of as a
result of this pandemic. We're certainly not at the end of it. Certainly some trends
that will come and go but many will be here for good. So today we're gonna be speaking about five categories that we think again disproportionately had been disrupted. And it's gonna be more of a discussion between Jeff and I, based upon
the insights and learnings from the study and really
what we're seeing in culture and business and society at large.

That we should look out for to really have us better prepared for what the future may look like. And those five categories are travel, who doesn't wanna travel right now, right? Retail, health and wellness,
technology, and finance. We're gonna go deep into all of these. And we are going to also have
room for Q and A at the end. So if you have questions,
please post them, on the window I believe it
should be to your right. And time permitting at the end, Jeff and I will dive into
them and we'll go from there. So let's dive in to our
first category, travel. Travel is obviously a
very hot topic right now. People are really, so yearning to switch from what I call a comfort state which they've been deep
in during the pandemic. And what I mean by comfort
state is everyone's wearing the Lululemon's sweatpants, right? Savings rates and the US on average, are at an all time high. People have never had this
much money in the bank. Obviously there are some sectors of the economy that are really struggling.

But overall the data shows that consumers have record savings right now. People have had more time than they've ever really
known what to do with. And entering this time was the one thing we couldn't capture enough of, right? And we spent time with
family and there's a lot that's kind of come from the comfort side but it's come at the expense
of adventure and excitement. People have not been going to dinners. They've not even been going to the office. They haven't been traveling. There's been those serendipity, lack of new romantic relationships. All of these things that consumers that they're facing. And the question is, once this
pandemic starts to clear up and we get to some semblance of normal.

How much of a whiplash
would there be from going from that comfort state
to an excitement state and travel is really the category where a lot of that question lies? Consumers have a fear of missing out. What we learned from our
study, which really conflicts with their feelings of
personal responsibility. People don't really know
when it's safe to travel. They don't really know
when they're gonna be able to be on an airplane
without the mask again. They don't know if it's okay for them that even being in an airport right now. So they have a fear of missing out. They wanna get out again,
but there's still this sort of fear kind of pulling them back. Nearly half of consumers agree that safety concerns are
making them more hesitant even if they're vaccinated. And again, it's gonna be kind of one of these wait and see things. There's not gonna be a
light switch that flips on in America where someone says, "okay, go back to normal again." We're already seeing states like Texas already removed mass mandates.

It's obviously not going to be uniformed in this divided nation we have right now in terms of direction for municipalities. A lot of consumers are gonna
be left to their own devices. And when it's safe to
do things, once again. This is a quote we uncovered
from our joint study "traveling in next year or
so isn't the top priority for me right now. Health and safety are my priorities and traveling can wait until
things start getting better." So again, you kind of
still have this mixed bag. And one overwhelming thing that popped up is that the consumers
that did wanna travel really are more focused
on domestic travel.

Because obviously the fear of the unknown of traveling overseas is
still quite prevalent. Despite the back that some
nations around the world or even further along in
the recovery than we are. I think there's a sense of
unease of being away from home and away from, consumers loved ones. And because of they're really veering towards more domestic travel. So, I mean, Jeff, I'm
gonna turn it over to you.

What are the implications of what we learned during the study in terms of how consumers are
thinking about travel overall? – Yeah. I think two things that
came from the study is a lot of people are planning travel. So, Matt, we know that they may not know when they actually get on a plane or go on a trip, but
they're planning travel. So I think for a lot of us that means that it's a good time to actually if you're
in the travel industry.

Or you sort of support the travel industry to figure out how to reach
a lot of those consumers. The other thing is what we found is people are yearning
for nostalgia again, based on that travel. Because as we've noted from the study, there may be fear of going somewhere new. They're probably looking at places they've gone in the
past as that first trip.

I think later down the line, we'll go on bucket list trips to destinations we've always dreamed of. But I think those first initial trips will be to places that many
people have already gone before. So that means for again, if
you have a list of people who've already visited your location. It's probably a good time to hit them up just because we're on
sort of this nostalgia. – Your point with nostalgia,
its also gonna be about family. – Yes. – We're in a world right now where it's been so transient
over the last 20 years. So many people, I have two brothers that both live in California
and I haven't seen them in over a year and I
haven't seen their kids. They were my nieces and nephews. The first trip I'm gonna take
is to go see them, right? So I think a lot of people are going to be traveling domestically. Not necessarily to go
do something so amazing but they wanna see family. That's what people value and
what they think is important. I think people a lot of implications to a really refined
focus on domestic travel.

I think a company like Airbnb
is going to absolutely boom during this for a couple reasons. A, from a domestic
standpoint, they're everywhere that you would wanna be. B, some of them may be
health and safety concerns that consumers might have
with being in a lobby or being in an elevator, a hotel. Don't really exist with Airbnb.

And it's also for the
supplier or host side it's a great incremental
revenue opportunity. So I think as it's an established company more consumers are gonna be willing to let others stay in their home. So I think Airbnb is gonna be huge. The other thing I'm curious
to hear your thoughts on it is I think domestic travel in demand to me is a good
thing for the auto industry. So for a very long time, we were saying with urbanization, with
millennials living in cities. That them buying a car is not
really as important anymore because you have the ease new, Ubiquity something like Uber,
where you can go anywhere you wanna go. And while I think Uber
and Lyft are certainly gonna make a comeback. I think not as much so as
the auto manufacturers. I think many consumers are moving out of primary cities like
San Francisco in New York to maybe secondary cities
like Austin or Charlotte, where it's easier to have a car.

And if you're gonna be
traveling more domestic, I think that now becomes almost a mandate. So what are your thoughts on Airbnb, Jeff? And what are your thoughts be on sort of this Renaissance of the auto
industry coming out of this? – Yeah, I think Airbnb
will do very, very well. Just based on what you've said, the fact that some people
might just wanna stay in places for a longer period of time. We know Airbnb facilitates that sometimes a little bit better
than staying in a hotel. And also some of the safety reasons there's healthy hesitation here.

You know, Matt, when it comes to I think those initial trips. And then on the car side, I totally agree. I think if you have more people in secondary and tertiary cities, you need a car to get around. There isn't really the
public transportation that you find in some
of our primary cities around the world. So that is another thing that people will have to think
about as people continue to make those moves
into suburban locations. And probably will never move back to those primary locations
if their employer says, "hey you can work from
anywhere moving forward which many companies have already done." – It's gonna be really interesting.

And I think the other aspect of travel that definitely is up in the air right now is what is the future of business travel? I can tell you that, I'm thankful that our company Suzy has
performed incredibly well during this pandemic. Not only cause we have an amazing team, but because we pivoted very fast to being a remote organization. And really a company that
put digital marketing at its center we obviously knew
we couldn't visit customers. We couldn't go to big
conferences, et cetera. And because of it really pivoted to quite an efficient model
where coming out of this I'm gonna think twice
about sending 20 people to South by Southwest or to
consumer electronic show.

While I value the one-on-one
personal relationships that can be built. I'm just not quite so
sure that it's worth it, to send our employees there. So what are your thoughts on that, Jeff in terms of business
travel and the efficiency coming out of it. And what businesses should expect in terms of how that's gonna come back? – I think we'll move into
a period which was similar to the post recession of the dotcom bust in the early 2,000s. You had to have a reason for
getting on a plane to travel. So I think we will see that Matt where someone might say, you have to have a thorough
reason for actually traveling. Otherwise, you can rely on Teams or Zoom or other digital sort of methods to speak to clients and customers.

I do think though there will be big events that are earmarked for travel. Just because we know as
you mentioned, serendipity being able to bump into people who you can do business arrangements or business development
deals with that's important. I just think that companies
will send a lot smaller amounts of team to some of those events that were massive in the past. Also, I think those events
will keep a hybrid model meaning, moving forward
consumer electronic showcase. If you wanna go to Vegas, you can. But if you wanna sign
up for a digital ticket I think they'll still
continue to offer that. There's no way we're going back to, "hey you have to be there
in person" moving forward. – Looks like we're having some slight technical
difficulties here, Jeff. Jeff, I'm kind of curious
from your perspective are there certain events
that you're gonna prioritize having your team go to in-person versus maybe some of the other things? – Yeah, I think if you look
at what's on a calendar, for the events within my industry.

I think, down the line
when it comes to things in 2022 which might seem like, wait, that's another year from now. But probably when most events will allow for full registration,
I'll probably go back to consumer electronic showcase again. I thought the virtual event they hosted this year was good. One thing that's difficult
is you can't do demos. You can't see a lot of the technology or sort of like, use that technology as you would in a virtual space. I also think, going back to can lines is a good thing in terms
of being able to see, a lot of people that
business deals might happen. But that probably will be a shorter list than in years past or maybe
I would have attended, 15 possibly 20 events to
speak at or to meet people. That list might be closer to
three to four moving forward. And then also just asking a
lot of these in-person events can I present, virtually
rather than in person? Just so I don't have to go to an airport, fly somewhere to present.

And requires a lot of things
in terms of scheduling. So that's one I think good thing we may see from a result of this. – Yeah I mean, I think for me what's been the most
interesting is, you know the ability to just like see content from all over the world, right? So I'm not just stuck
watching things on the US but if there's a really
incredible speaker, that's speaking in the
UK or something like that like now we have this full
opportunity to see it.

So hopefully some of
the things that we see now in digital, continuing forward. What are the things that you hope really to stick around from
kind of digital events? – I mean, I think the big
thing is, as you noted there's the ability now to,
anybody could be a speaker at an event. There's no more I think worry about, or shouldn't be a worry about, "hey we're only gonna book people to talk at an event because of
the virtual capabilities." That means you get a larger mix of people that are speaking at these events, which is I think always good. You get a lot of sort of diversity that's at an event. I think the big thing, moving forward will just be for those who decide not to go to physical events. How do you make that
virtual experience good, in terms of networking? I think one of the
biggest things that we get from a physical event
is the networking side.

So I think if they can
marry those two together we'll probably be in a
good shape moving forward. And I think it's also good for event companies it's
good for travel companies basically can offer special deals there. So we'll see where it goes. – Hey Jeff, Abel didn't know this, but we're obviously grooming him to be the next webinar
star. (Jeff laughing) I called him. I said, at one point Abel
in one of these webinars I am just gonna vanish. And it's gonna be up to you to step in (Jeff laughing) like a backup star and just
take us through this all.

And Abel did it. – I learned from the very best, Matt. – So Abel I may need you
back. (Jeff and Abel laughing) Maybe Jeff can send me one of those new Microsoft surface computers.
(Jeff and Abel laughing) So I don't go into these issues again. So we're gonna go into retail, Jeff. And obviously retail is so very important to the fabric of American cities. Where our office Suzy's office
used to be, our lease ended. So we don't have an office right now, but Soho on Broadway used to be littered with thriving retailers,
specialty retailers. Now that we're seeing boarded up windows and that has not recovered. And I don't know if it will recover. And unfortunately, the demise
of retail that was driven during the pandemic
really disproportionately hit small businesses as well. Whether it be restaurants
or hardware stores, these businesses that
have been built for years, may never recover.

And many of them are
already out of business. So at the same time, you have companies like Shopify and Amazon and Wayfair and Etsy that have thrived
during the pandemic and in some levels at the
expense of these companies. So the question becomes what happens to retail coming out of this? I think one misconception
that you see a lot is wall street, grouping companies like Shopify and Amazon
is stay-at-home stocks. When the reality is that commerce before the pandemic hit was
largely on mobile devices. And the last time I checked you could shop on mobile devices away from home. So I don't think e-commerce
really is part and parcel with the pandemic so much as
a company like maybe Peloton whereas maybe their success
is directly tied with it. I think it's actually quite the opposite where you see categories like grocery and consumers have gotten used to ordering grocery over Instacart.

And they've gotten used to the convenience in a world where they're
gonna have a less time because I have more things to do. They're probably not gonna go back, right? So I think that a lot of
the changes on e-commerce during the pandemic are
likely here to stay. The question is what's gonna
change coming out of it. Is there a room for small businesses to comeback, et cetera. So consumers on that note are
torn between the convenience of digital and big box versus
supporting small businesses. They realize that small
businesses need support and there is a guilt for many consumers about ordering on Amazon. It's great, I can get this thing tomorrow by hitting a button but
I used to buy this thing from Joe's store downstairs.

And now he's not getting this business. And so consumers are
very much aware of that. Consumers love online shopping obviously, you can read reviews, you compare prices. There's not inventory issues. I entered a retail right
before the pandemic, I still remember. And the product was out of stock and I had to wait for them to tell me that then I had to wait in line. And when it got to the cash register they made me register
for a loyalty program. And then I couldn't take it back. Meanwhile, I have just on the way out just ordered it online and
gotten it and not have to worry. So again, convenience is a huge boost. And many consumers say, obviously that they're shopping
via established retailers like not just Amazon. But also more established
big box retailers have increased, companies
like Walmart and Target.

Costco have also benefited
because consumers know that they're gonna be able to get, first of all things like
buy online pickup in store which a lot of consumers like. So they have that
omni-channel based approach. They know they're gonna
probably get the best prices. They know they're gonna have the inventory that they want. So again, it was the big box retailers the e-commerce kings who
really took advantage of this again at the
expense of small businesses. Although again, so many
people say it's important to support local retailers. So let's talk about this, Jeff.

Let's talk about retail and how you see retail
playing out post pandemic. – Yeah, I think the big area, Matt is we can all shop online, but can we get necessarily
the deep expertise that we need when it comes
to a particular area. Now, granted, I know a lot of people say I can learn anything
that I want to online by watching particular videos. But I'll use an example of an area that I'm in with design. There's still a lot of people
who have trouble figuring out like what blank t-shirts
to print their designs on because there's not really
enough good information. So what happens if in the past you may have had a
storefront where you went to and you talked to that
particular proprietor. How that basically becomes
more of an experiential outpost for a lot of these companies.

That is needed in a post pandemic because of the fact that we can't always find everything that we want on line, and there's also not a trust factor. There's a lot of issues. – Or human connection. – Yes. – So, I mean, shopping something that was not just a chore but it was an activity. Especially, people love going shopping. It was something to do. I was at a mall in New
Jersey two weeks ago and it was actually more crowded than you'd ever expected to be
even in a non pandemic world.

So people are missing it. People love going to the mall. They love walking in city
streets and shopping. But I think you hit on an
important point there, Jeff. Which is, I think coming out of this again consumers are gonna
have more money relative than they've ever had before. And they're gonna have far less time than they had in 2020
because their pie chart of their day is now gonna be filled with leaving the house
and doing more things. So because of that, the demand
for shopping will be there but the demands on people's
time will be increased. And I think because of that
for a consumer to wanna go into a retailer, I think
the offering needs to span beyond just a product or
service that's being sold.

So I think it's gotta be
an experience to your point a point of emotional connection. It's gotta be something where a consumer leaves whether they
bought something or not. And they feel like that
they've been entertained or it was a worth a wastage of time. Cause if it's just about the transaction they're just gonna do it on Amazon. So I think now what I question
is can a small business afford to give consumers experiences. You know what I mean? Because I do think a lot
of these tech companies whether it be Netflix who I could see buying a chain of movie
theaters or Shopify. That could see buying a mall and having all their merchants
actually set up in the mall. You're gonna have these
rich tech companies coming out of this pandemic take advantage of the
press real estate costs and major metropolitan areas to have that omni-channel approach. Cause it's no doubt that it works.

So does that even leave
room for small businesses? So I think it's gonna be incumbent on any retail order to kind of rethink what does an experience look like if I expect somebody to spend their time their precious time in my establishment? – Yeah, I mean you bring up a good point with the fact that you
have a lot of companies that have been sitting
on a lot of capital. They could probably go out and get a lot of commercial retail space. – Oh my God. – And do some interesting things with it.

I mean, I think the
way the world will look in the retail space in the next year, it's gonna probably surprise a lot of us. I have no idea what some
areas might look like but it's gonna be interest. – I mean, you have also companies
like Starbucks now, right? That have built their whole experience on people on laptops, sitting around in their hip cafes,
spending their time there. And now what they've realized
is they can build a far more efficient model. Chipotle has done the same thing. McDonald's has done the same thing building this very sophisticated
digital infrastructure that stresses convenience,
the ease of use for consumers. Where basically you pre-order,
you show up, you grab it and you go, and it doesn't
impact Starbucks margins at all. In fact it's actually a positive boom in their margins because
now they don't have to pay as many people, right.

They don't need people
sitting in their store. So I think QSR it's not traditional retail but I think that's gonna change as well. So I think you're gonna see a sea change in the way that retail is constructed. But going back to Netflix,
buying, a movie theater like I honestly think that
you're gonna see companies like Lululemon, who obviously broke ground with purchasing of an in-home
fitness company mirror which is a physical hardware device. I wouldn't be surprised
to them purchase Equinox.

Why, wouldn't they do that, right? So I think they could take
advantage of these companies. Equinox has obviously
struggled during this people aren't going to their
gyms, Lululemons thrive. I think you're gonna start to see some of those acquisitions occur for true Omnichannel
from these larger brands. – Yeah, I would agree with that. I also think, and you
know Peloton made a move during this pandemic actually. I think they acquired a company that allows them to get more of their equipment into
physical infrastructure.

So this might be a case
where we hear every person saying the gym is dead. But we might actually see
gyms wear a Peloton devices so that you actually can use that. Cause some people do like the serendipity. That's what it is. – They bought Precore
for a couple of reasons one of which is that the demand on their company was so
strong that it was taking, 90 days or longer to get your equipment. And now they have domestic
manufacturing capabilities but yes, they're gonna try
to expand their business. So yeah, the businesses that won during this are gonna be
ones that are gonna step on the gas and they're
gonna take advantage of it. And so again, small businesses, it's incumbent on companies that have kind of as a byproduct thrived off of small businesses.

Whether it be sort of like a financial services company, right. They should support small businesses like Amex small business Saturdays, right? The perfect example. I think you need more big
companies doing things like that to support small businesses. Cause otherwise main
street is going to look like corporate America one-on-one and it's already starting to happen. Even before the pandemic,
somebody went out of business in New York city, you saw a Starbucks, a Chase or CBS open. That's basically all you saw because those are the only
companies that can afford it. On one hand now that the real
estate costs are depressed. So maybe local businesses can afford it. But the other hand is
the demand gonna be there on the other side. – I mean, we'll see. I know that, when it
comes to rental property that's not commercial. It's so depressed that
I think you're starting to see a lot of artists
move back into cities. They had been priced out. The same thing could happen
on the commercial spaces.

– So true. – Where a small business takes advantage of
depressed real estate costs. And we have a thriving
sort of culture, again in some cities that have become
a little bit homogeneous. – Oh my God yeah. I talked about it in my book, YouthNation how 560 state street is a rhyme by Jay Z. And one of the songs he had to sell drugs out of there to support his family right. Now if 560 state street
is across the street from the multi-billion
dollar Barclay center where the Brooklyn nets play, which Jay Z was a part owner of. And if you wanted a condo there now it's in the millions of dollars. So that's gentrification, right? That happened.

But there was a process to get there. And the process to get
there is New York city was too expensive. The artists and the kind
of cultural influencers and people who wanted to come up with cool cupcake concepts
moved to Brooklyn, they moved to Williamsburg, right. And they started to create
these cool businesses. And then what happened? The youth followed. And then next thing you know you see an Apple store and
a Starbucks pop up there and the cycle just keeps spreading out and the livable boundaries
get pushed out further. This could be a reset for that in New York city, for example. And I think in other markets it's like Austin it's
gonna facilitate Austin to look like New York.

Cause a lot of people are moving there. So there, there's no depressed costs. It's just the demand in Miami
it's out of control, right. So I think this recovery and especially when it comes to retail it's gonna take different
shapes city by city. – Yeah, really great. – Really interesting. So health and wellness
obviously has been front and center for consumers
during the pandemic. Because every day they're reading about people getting
hospitalized and they're reading about vaccines and are
reading about respirators and all these things that we never really wanted to hear about. And now it's in our face that, we are all mere mortals, right? And we need to take care of ourselves. And you see companies
that are in supplements or vitamins just explode
during the pandemic. And we talked about Peloton. So health and wellness
is front and center now. In a way that it wasn't you see companies like oat milk exploding. And it's a big deal. The question is what's the form factor of health and wellness coming out of it. And the last part of it obviously is doctors and medicine
and pharmaceuticals which is just a massive space.

pexels photo 185576

One of the last major
spaces to kind of hold out from digital disruption, which
we'll talk about in a bit. So kind of what does that all mean coming out of this with what we see? Obviously the rise in virtual wellbeing has been explosive. You see companies like Teladoc
allow people to see doctors, companies like Calm that allow you to do, online therapy and
meditation have exploded. And obviously companies like GoodRx where you no longer have to go a pharmacy to get your medications. It gets sent to you. This whole world has been transformed really out of these companies
having no choice, right.

All of a sudden you see
the Walgreens and CVSs of the world really
accelerate their digital go to market because they
had no other choice, right. Because all of a sudden, if they didn't, they wouldn't be in business. And it really has accelerated
digital disruption in this space. A third of people
prioritizing their own health and wellness over work
or personal demands. It makes sense. I mean, also again, people have more time. So now a lot of people
have the luxury to do both. They can spend more time
taking care of themselves and work just as much. Cause they're not commuting. You're not traveling for work. Of course, I think the remote
work has taken its toll on mental health in a big way. Which is a whole different subject. But consumers know that health is now the most important thing. They feel comfortable now
interacting with their doctor or healthcare services
through video conferencing.

It's something that, again in the past was seen as something
that was very alternative. And now with platforms like Teladoc, many instances where
somebody will visit a doctor they don't have to do anymore. They're doing it from their home. And a doctor is able to
diagnose them remotely. And it had a transformative
effect on the medical space. So, obviously things
are going more digital in health and wellness. Things are coming with more of an expectation of personalization. I think with all this becomes a new realm of privacy concerns for consumers. Cause when you're talking about the health and wellness space, I
think personal privacy and data privacy is
incredibly important as well. So Jeff, what do you
think some of the most, I guess pivotal trends that
came out of the last year in the health and wellness space or that will have implications
towards the future? – I mean, I think the term we saw in that one slide is a
big one, personalization.

I mean, that's really been where I think the healthcare spaces wanted to move for a very long period of time. But maybe it has been
slower to move there Matt regulation the need to adopt
a lot of digital technology. Maybe they didn't think
they would get the scale that they can get now from people saying, "hey I don't necessarily want to go and schedule a physical
appointment with the doctor. I just have questions for the doctor. Could we do that virtually?" I think if people are more
comfortable with that, knowing that there's, privacy rules that are set in place there. I mean why wouldn't someone
wanna take advantage of that? I think that's like an important way that we get into a mode
of monitoring ourselves and taking care of ourselves. Rather than going to a
doctor when we're sick which is unfortunately how much of, our society has operated.

So this is I think, a welcome area that could be really, really interesting that has a lot of
implications moving forward. In terms of growth in this area of how to personalize health
care a little bit more. – Absolutely. I know Jeff we were talking
about this yesterday, but the medical space has
been one of the less spaces to really face digital disruption. You had industries like
the music industry, where one day you saw CDs at
Walmart when you walked in and the next day after you saw all these new music streaming startups. And then which morphed into platforms like iTunes and Spotify,
CDs no longer, right. Digital disruption hit
the music industry hard. Then it did the same
with the movie industry. And, you saw us go from DVDs being in the front of Walmart, to Netflix. And everything streaming
and on and on and on is industry by industry got
kind of completely reinvented from the inside out through digital.

And I think going into this pandemic there were still some holdouts. There are still some huge industries and they're usually industries that first of all are protected by sort of sleepy legacy incumbents. Or industries that are
highly regulated, right? But mostly there are
industries where disruption hurts the people who are running it. Because if the disruption happened it'd be a transfer of wealth
from the old establishment to the new establishment
so people are holding on.

And some of those industries obviously are financial services for example. And there's tremendous deregulation by the Trump administration
in financial services and you saw a rise of FinTech. And now you're seeing a whole new world as it comes to crypto
and it comes to NFTs. And all these things that are happening in a really exciting in a financial space. And the medical space is no different. Doctors would never do an online visit because it would impact
maybe what they can bill or what's the implication on healthcare and all of these things. And now you're seeing that be transformed. You're seeing the same
thing with real estate where everything is done online in terms of applying for
mortgages and seeing houses. So all these legacy industries, they're gonna be the next ones to fall, not fall, but be transformed. And I think there's gonna
be massive opportunities coming on, on the other side of that.

– I mean, I think one of the
things you point out there Matt is interesting to look at. Which is also, most of the
industries you talked about used crowd sourcing in
terms of new models. I mean the big area
that needs to be really looked at is and will
be difficult to change is the area of insurance. That's been an old area
that doesn't wanna change. But what happens if you basically start to have new models that sort
of bypass those systems? I don't know if the health
industry is really ready for what might be coming to
it, but we'll see what happens.

– Right. But the question is, is
it about what the industry is ready for? Or is about what the consumers demand? – Yeah, it's what the
consumers obviously want. It's what people really want. And I think we've had
this sentiment out there for quite a long time now. In terms of more options
that are available to people when it comes
to health and wellness. I think the pandemic
definitely brought that out because even people were
looking for more options on mental health and other things that they could utilize that
really weren't front and center before the pandemic. I mean people didn't really like to talk a lot about mental health. They thought it was a stigma. I think that's an area now
that we talk much more about because there's much more burnout. And it's just like having
physical health issues. So these things I think will change how we basically provide
services moving forward. – Yeah, you know what's interesting, Jeff. It's interesting how
fast things can change when change is the only option.

So for example, when COVID first hit, it was vaccines take five
to seven years to develop. And here we are a year later, and the President said
this week, that by May there's gonna be enough
vaccines that have been tested to be safe and effective for
the entire US population. But a year ago it was five to seven years.

And now it's one year. So it just shows that where
there's a will, there's a way cause the technological
advancements are there. So there's no reason why
accelerated disruption shouldn't happen in
these legacy industries. The only reason they haven't is again it's being held back and now it's gonna be moving forward. The automotive sector's another one where you're gonna see I
think the electric vehicle space explode coming out of this as well.

So yeah. So keeping it moving to our
next category, technology. Which really is more of
a I think a horizontal versus a vertical. Because as we just
mentioned, technology really has seeped into every
part of the business world and every part of culture
and every part of society. But there certainly were
technological disruptions galore during the pandemic
that are gonna have lasting implications on the consumer coming out of it. Tech adoption excitement's growing rapidly people are also more
concerned about privacy, social interaction, connection. The government is getting
involved with a lot of big tech in terms of a regulation
anti-competitive practices. It did feel like in 2020
things came to a head with big tech and its impact
on business, on society. Whether it's what happened with Twitter and the former president
Trump during the election where they basically
took his account away. And all of a sudden, now
Twitter is seen as a company that's an arbiter of censorship, or maybe they're not depending
upon what side you fall on.

Tech has been front and center now. We relied on it for our
wellbeing and our livelihood during the pandemic. And it's had massive shifts in the way that our entire world operates in the world that none
of us probably really saw 20 years ago. Obviously technology is amazing cause it makes people's lives easier. People feel cut off from the world if they don't have their
smartphone devices. It's really an appendage especially when talking about gen Z. People ask all the time
what's the difference between millennials and Gen Z. And the answer is millennials
are the first generation that grew up with the
internet in household. Gen Z is the first generation who grew up with a mobile in the household. And for Gen Z, the
smartphone is an appendage to their body, right? They can't survive without it. So it really has become so important. A third of people who
believe they've been spending far too much time in
front of their screens. I surprised it might
be even more than that, maybe some people like it.

But I can tell you it's exhausting being in front of a screen,
not when I'm talking to you, of course, Jeff. But in a busy day, it's pretty hard. And people I think in a lot
of ways they're screened out so to speak they've spent so much time inside staring at screens this year. The question is, are
tech companies gonna try to facilitate that
rebalancing coming out of it? Because the last thing we
need coming out of this is more screen time we've been inside probably more than we wanted to. And Jeff tell me about cyber sickness? It a sign that we
uncovered during the study that I thought was interesting. Describe what that is. – So this is a term that we'll
probably hear about more. It's actually from just
being in front of your screen all the time, constantly
having to rely on technology to do your day to day. And we know that the past year that's really been the case for all of us. We're more tired probably because we are on video a lot more. We're more tired because we're constantly having to use sort of
digital devices to do a lot of the things.

That maybe there was a
little bit more of a balance that was there in the past. So this is an interesting area that we have to look at
especially when it comes to not just what technology offers. But also any customer
experience in any vertical and how they're using technology. Just because it exists doesn't necessarily mean we should design it that
way for people to use it. So I think back to a couple of years ago, they're still in existence
and they're used Matt when it comes to like Chatbots. But sometimes people
don't wanna be, you know disturbed by something that
pops up on their screen. They just wanna be able
to get the right answer. And we have to think about that in terms of customer
experience, moving forward. Like, "hey do people
really wanna be interrupted by another pop-up or do we just give them the contact information so
they can solve the problem that they're looking to solve?" – And I think you had
a great point yesterday when were chatting just about you see something like Clubhouse exploding. And Clubhouse doesn't
involve screens, right? Like you can participate it's audio you're not looking at each other.

Clubhouse could just as well
be video chats, et cetera, but it's not. So tell me about why you
think that's occurring with Clubhouse and how
it's kind of, I guess counterculture in some ways in a world where everything
seems to be video now. – I mean, people are sort of trying to figure out how to do things. They're demanded with
multitasking during the day. So they're trying to do a
lot of different things. You may be on a video call
and they're still trying to like design a document and
meet deadlines here and there. And there's something just about audio which allows for better
I think multitasking. It's sort of reminiscent
of having music on, in the background or the radio
playing in the background.

But instead maybe you're
listening to someone talk about some particular subject matter and you're just listening in. It's interesting rather than having to sort of follow along that conversation via text or videos. So I think these are just
things that have always existed but now there's companies
moving into these areas. Because they realize the
demands on people's time and the fact that they
have to fixate on a screen. It's like, how do we lessen that so that it actually makes people, be able to do things that they need to do and not get so tired all the time. I think that's one thing
that is unfortunate about this past years. We realize how tiring
technology may make us. – Yeah, absolutely. And in that regard we kind
of touched on this earlier. Many believe that the office
will forever be changed and again our company has
been so incredibly efficient. When people ask me what's going on in Suzy in the last year it's gone, great. We've been so incredibly efficient. You can go from one meeting to the next you never have to leave, et cetera.

That comes at a cost, right? It comes at a cost of mental health. It comes at a cost of diminished
trust and relationships because, most of our employees
had never met each other. 70% of our employees never
stepped foot in our office. They don't even know what
each other look like. And we have trust because
we've spent a lot of time in person together. And if we haven't my relationship with you would be completely different, right? And I think that trust breeds, culture and culture is the secret
weapon for companies.

And it's much harder to be formed online. So in my opinion, I
think that offices need some type of physical presence
to basically breed culture. Because as culture is so very important but it's a balancing act because
it's much more efficient. Some people do like working from home. I read this morning that JP Morgan Chase one of the biggest commercial
real estate tenants in New York city is
putting some of its space up on the market. I was surprised by that because, JP Morgan and Goldman Sachs and American Express they're the biggest tenants. If that they start to
move out of New York, you really start to question
commercial real estate. So what are your thoughts
and what's going on at Microsoft with remote work? Are you guys planning
on going to the office? – I mean, I think like one of the things is we're planning for,
I think a lot of this is still being mapped out.

What the hybrid workplaces look like. But the thing is, you know,
Matt, before the pandemic, I worked from anywhere. I've been with the company for eight years and you name it. I worked from it, whether
it was an airport lounge. – That's been you. You've always been on the bidding edge. – I guess but those are things that I think we've gotten used to now is our office on a sort of device. Where we're able to do that work where it's necessary. I think the hybrid model
is really important. I think this also straddles something that we talked about in retail. Which will there be a
demand on physical meeting, collaborative spaces moving forward where people can do business in person.

As you said trust is an important factor we get most when we actually
are meeting with other people. But it's not like a place
that, people have to rent all the time and pay
like a 30 year rent on. Those models may change as well moving forward because of technology. So these are all things
that we have to think about. The list continues to grow here in terms of all the changes that we have to consider moving forward. – Yeah I mean, you raise a great point. I mean, the real estate
industry is another industry that hasn't had much disruption. We start to see it with WeWork. They obviously had some of their stumbles. But the, WeWork pays you
go model was appealing for many startups. There's another great startup that was in the WeWork space called Knotel which went out of business basically. And it was just poor
timing on their behalf. I thought what they were
doing was great as well.

That model could very well be much more in demand coming out of this. Because I think it is the hybrid model that allows companies to
have an in-person presence but you're not tying
up millions of dollars in security deposits. You're not basically getting an office for 10,000 square feet
when you might need five. Or a hundred thousand
square feet the next year. There's so much disruption to space who would want to sign a
seven year lease right now. So I think the real estate industry is gonna need to be reactive, but also lean into their strengths.

Which is essentially they are a conduit to get people together, build
culture, build relationships. And if I were in commercial real estate I would be playing that up. It's not about the value of an office. It's about the value of trust and culture. That's why offices exist in my opinion. And that's why it's gonna be a big part of our future moving
forward to Suzy for sure. So let's talk about
financial services again. We mentioned it quickly earlier. Another industry that for
so long has been controlled by what we call fat happy
bankers on wall street. And, you know, it was always about the institutions
making all their money when the retail investor at main street got holding the bag. We saw a couple of years ago the whole occupy wall street movement, where people were sick
about the hedge fund billionaire as well. People were struggling
and over the last month or so we've seen the shift occur. Where the power dynamic
in the financial services and banking space has been shifting from big institutions, the big banks, the treasury, et cetera.

To individuals, people on
Reddit pumping up stocks to basically create short squeezes on multi-billion dollar hedge funds. And currencies like Bitcoin and Ethereum essentially being built from the bottom up not from the top down. And having hundreds of
billions of dollars of value to the extent where now
you have the treasury heads talking about and the
federal reserve talking about is crypto a real currency or not? So it's now the financial
services are being driven from the sidewalks, no
longer the boardroom. So you have this collision happening. And the same time, you have
incredible new startups like Square that are making it easier for small businesses
to accept credit cards. And Brexit that's making
it easier for companies to borrow money and on and on and on. Affirm that's a whole new financing model, that's a big partner of Peloton. So the disruption to
financial spaces is huge. And it's such a big opportunity for companies really in all industries.

Cause no matter what,
if you're in business you're selling things, how
are you selling things? How are consumers transferring currency from themselves to you for
your product or service? So this really matters for everyone. At the same time there's personal finance consumers are trying to gain
control of their finances. When to spend, as we mentioned savings are at an all time high, but consumers still find that
they don't have full control of their financial future.

I think when this first
started, the pandemic started people were saying, it's
the next great depression you know, do you have enough money? They was talking about, run on the banks and people stocking up on food. So that really kind of, I
think, impacted consumers in terms of thinking about
their financial future and wellbeing. 41% of respondents are putting money aside to save for things they
can't afford right now. I believe that coming out of this we are gonna see also a huge
boom of luxury purchases and big ticket purchases.

We've already seen it
with the housing market. The housing market has exploded. It hasn't been this hot since 2006 because interest rates
dropped to an all time low. It's not the case anymore but they were at an all time low which drove up a massive
boom in the housing market. I think we're gonna see in the auto space that we talked about. I think the luxury goods
space is also gonna take off coming out is cause consumers
have been saving up money. But getting a hold of them,
finances, financial literacy with all this disruption happening, it's incredibly important. And the last thing I'll say is everyone's getting the financial space. Now you see Walmart sharpening
their FinTech focus, and they're looking to figure out can Walmart create a bank? And obviously there's Apple
pay and there's PayPal. And all of these companies that are sort of entering the space. So tons of disruption, what
sticks out to you, Jeff? Is some of the big lasting trends that are gonna be coming
out of this crazy world. we've seen in the financial services and really the financial
markets space overall.

– I mean, I think the big one
is all of us do transactions of some type with whatever
business we're in. But the question is, especially
with consumer-facing models. What are those payments
that you offer people? It's great that you can
pay with credit card but now we're starting to
see payment plan options. We're starting to see much
more biometric payments the ability to Venmo. Those are the things that I
think we have to think about especially depending on
who our consumer base is. And what they're comfortable with. I'm still fascinated
with a lot of companies who are unwilling to add
different payment models and make it difficult for the consumer to pay for those services
or those materials.

And it just moves people
to look for alternatives. So I think that we're in an area now where payment models are front and center in terms of the financial
services industry. – Absolutely. And I also think obviously cryptocurrency is not going away anytime soon. It's just gonna be a thing
that doesn't go away. I think cryptocurrency
it's a classic example of the technology adoption curve. Five years ago it was almost like it was something that was hot and it spiked and everyone
was talking about it. And then it went away. People stopped hearing about
Bitcoin for a couple of years. And the reason why is
the initial hype wore off and the real work began. And people started to figure out what are the real applications of the blockchain and of cryptocurrency. And now here we are in 2021
and it's come roaring back because it's ready for
application society.

So I think it's definitely
a lesson learned. The same thing happened
with e-commerce in 2000. There was and all
these e-commerce companies that got over-valued really
didn't have the infrastructure or demand but it was almost
like a genetic marker for things to come. They imploded and then out came Amazon and all their other,
you know, counterparts which have basically
redefined the commerce space. So I think it's definitely,
there's themes there that I think are applicable to almost every industry. Where you'll see these
new trends they'll go away cause their real work begins
and they come pouring back. So this has been great. So we're gonna go to questions. But before we do if anybody
wants the full report which is the Microsoft advertising state of the five consumer report in partnership with Suzy,
you can download it. There is a link on the handout
section of your screen. So if you click that, you
can download the report. And of course you can reach out to us if you have any questions. And if you wanna learn more
about Microsoft advertising we're happy to connect you with Jeff and his colleagues there.

But I think we're gonna see Abel now, again at who saved me today. And we're gonna go into some questions. – Awesome. All right. So first question for you a
lot of people are curious, we talked about this need that people wanna
support small businesses. And kind of how most people were actually going to big box. So for some of those smaller businesses who just don't have that
digital infrastructure, they don't have the capital
to create experiences. Like what advice do you
have for them, Matt? About how they can really kind of navigate through these difficult waters? – In terms of just having
the right infrastructure be able to go digital? – To go digital or create experiences within their kind of in person places. – Yeah I mean, I think ultimately it all rests with what is the unmet need of your consumer right? So every business service is a consumer.

And depending upon what category you are, that consumer difference
and their needs different, but regardless they all have unmet needs. So for example, if I was selling pet food, an unmet need right now. I would think is a place for people to be able to bring their
pets coming out of this, to allow their pets, to
play with other pets. And kind of reignite that social dialogue between pet owners that we didn't have. So I would invest in
some type of experience, like a dog track where
dogs can run around. And subsidize it and
you'll sell more pet food and you're bringing owners together. So that's a high level example but you're identifying an unmet need that's accelerate during the pandemic. And you're coming in and
you're helping to solve that. So I think ultimately
wins about experiences and content and things that are really about the consumer first. You have to focus on the unmet needs where do you have a right to play and then try to come in and
solve some of those unmet needs.

– Definitely. Next question here is really for Jeff. So obviously we talked a lot
about the fact that offices and kind of working remotely
or working in person is gonna look dramatically different. So kind of curious from
your perspective, Jeff obviously Microsoft having
a very big footprint in kind of office environments. How are you guys talking
about it internally and where do you guys
really see that going? – Yeah, I think the
best thing or the things that have been discussed is how do you get the most.

And what the pandemic has opened is this discussion around how do you get the most out of a person? In the past it was one role. You had to be at the
office at a certain time. You had to stay till a certain time. You had to basically use
whatever the company provided. But if you think about it,
that's also cause technology sort of required you to be there.

There was a physical phone on the desk. There may have been a computer that you couldn't take anywhere with you because it was basically a desktop. Mobility has allowed people
to do their best work, really from anywhere. That said there's always discussions too on how do you get
groups of people together so that you can bond as Matt said. How do you build a culture? You have to sort of build in things that aren't always about work but about understanding the
people that you work with. So I think there's a lot of practices that we're doing where it's like, "hey how do we understand
the people that we work with? How do we empathize with them?" And that way we can sort
of figure out the best way that we can work moving forward.

Whether that's, you know in the office a few days, a week talking to others. Or somewhere else where
we can do deep work. I think one of the things missing from the office environment
is the idea of deep work. Everyone thinks that you're
just supposed to scramble around and do little things here and there. And that's not how you get
to any big development. Deep work is actually
fixating on something and working on it for a
very long period of time. And that means less distraction. And I think that's where
we're sort of moving when it comes to the future
of work post pandemic. – Absolutely. – And maybe just one final
question for both of you all.

Kind of going through this report, what's probably the most surprising thing that you guys each found? – I can go first there. I think the biggest one
is, there's been a lot of discussions in the past. Pre pandemic on how purpose
is a really big part of business culture. But, we tend to forget that humans, when they need things they
can sort of be selfish and selfishly motivated. And what we've is even though people say they support small business they're really using
what's convenient to them. And that shouldn't have
surprised me, but it did.

– I was gonna say that.(Matt
and Jeff laughing) But I think the one thing
that definitely surprised me is just how conscious consumers seem to be about the impact of technology
on their mental wellbeing. Where it's just front and center right now where consumers need a shift. They need to shift away from the screens. They need to be in the real world. They need personal
connection, human interaction. They need to get out and
travel and do things.

And that just came up loud and clear in so many of the individual industries that we dove deep into. – Definitely. I actually, may have one
final question for you, Matt. Can you tell me a little bit about Suzy and kinda where that panel audience came from those responding
to some of the research? – Sure. Yep, so for those of
you who are new to Suzy. Suzy is a market research software tool that enables brands to be able to conduct on demand market research from whatever audience
that matters the most. We have our own proprietary
US consumer panel that's census weighted amongst
key census based criteria. So companies can get
nationally representative feedback to help them make better more informed decisions. Of course, driven by the consumer which as you know, is more
important than ever before. Given all the changes that
we talked about today. – Awesome. Well, that's really all the
questions that we have here.

But thank you both for
coming out this discussion. – Thank you, it was great. Thank you to everyone,
Abel, thanks as always to you and your team. Katie and the whole team
for putting this together. Jeff, can't thank you
enough for your partnership. It's been great working
with you on the study. Let's make it an annual thing. If you're down with that. Always so many other
things that we can uncover and I always enjoy my time with you. And everyone who takes
the time to join today out of your busy schedules. We really appreciate it. So on behalf of myself and Jeff and the team at Suzy thanks, everyone. Stay safe and hope to see
everyone in the person real soon. Take care, everyone..

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