This year’s CES was no different than the last few: we saw again that any product — anything at all, really — can and will become “smart”. But “smart” is not always the same as “wise.”

The last great wave in Tech, Mobile First, was a chase response to where consumers were clearly heading. The current wave, AI First, is largely the inverse; brands are hoping to pull the public toward AI as a product feature, without always making a compelling case. The good news is that brands are learning by doing, real value is beginning to appear, and the seeds of a transformed, enhanced relationship between consumer and company are being planted.

The State of the Art
Even buttoned-down companies such as Kohler rolled out elegant Smart sinks and showers this week at CES. “Hey sink, can I get 8 ounces of water, hot?” A company called Vivint unveiled “Streety,” a system that lets an entire neighborhood share all video from their homes’ security cameras in real-time. The Myant clothing line turns fabric into a sensor surface, continuously sending heart and breathing rate, temperature, and other biometrics to an app.

Is this stuff cool? Without question. Is a self-aware fridge, suggesting recipes based on its contents, more useful than one without such capability? Hell yes — marketing intelligence company IDC says that 20% of folks are happy to pay more for that feature alone. Do these options cross the threshold into “must have” territory, answering a burning consumer need? Not yet.

IDC predicts consumer IoT spending is on track to hit $62bn in 2018, the fastest growing segment in the industry, but being able to play music or set a timer on your Amazon Echo is simply not a killer app, and the fact that Alexa can speak to me from my toilet does not move the needle much further. Voice control does make technology less visible, and speaking aloud is the simplest way to interact with a machine (language requires zero learning curve, after all), but there has to be more to it than dimming smart bulbs and talking to the thermostat. Computer speech is going mainstream, yet the “mind” on the other end of the line is still primitive and narrow. This is shaping consumer expectations.

IoT Advantage: Brands
Brands, on the other hand, stand to reap from the explosion of connectivity.

Making every product an Internet-enabled satellite opens up communication channels that never existed.  Previously, manufacturers lost track of their products as soon as consumers took them home. Now, the products themselves can stay in constant contact with the mothership, sending back usage data, signaling when they need service, or automatically ordering another round of consumables. Crucially, brands can understand how their products are being used in the wild, allowing them to refine future iterations, and to do more accurate and more granular customer segmentation.

It’s not just hardware. Banks, for example, can be present and involved at decision moments throughout a customer’s day, with or without a dedicated app. Insurance companies are already starting to calibrate auto policies in real-time, based on observed driving habits.

Laying the groundwork for future magic
The real potential of AI and IoT is in automated customer service interactions that carry a brand’s DNA forward, ultimately in the form of visual or verbal avatars that feel like friends. Signs of this are already appearing, with CES booths featuring real-time facial animation and sophisticated voice cloning. The fun really begins when these artificial brand reps respond to your current mood, gauge your desires, or act meaningfully on any number of other signals flowing out of biometric and behavioral data. Enhancing life through understanding, anticipating, and acting on a user’s needs, with almost brutal simplicity and ease — THAT is the killer app promised by AI.

The raw, unrefined ingredients of the next major tech wave are here. The race to own the connected future begins.

Author: Adam Buhler, SVP Technology, DigitasLBi