A weekly podcast with the latest e-commerce news and events. Episode 302 is an interview with Kasey Lobaugh, Chief Futurist, Consumer Industry, Principal and Owner at Deloitte, as he discusses new research, Buying into Better: The future of the consumer industry.
Deloitte has published some new new research, Buying in to Better: The future of the consumer industry, in which they uncover dramatic change in the consumer industry that over the next decade will impact the markets, models, and mechanics of consumer industry companies in significant ways.
Also discussed The rise of digital goods and services: Opportunity over threat, and a monthly consumer tracker: Consumer behavior trends state of the consumer tracker | Deloitte Insights
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Episode 302 of the Jason & Scot show was recorded on Wednesday, January 25th, 2023.
[0:23] Welcome to the Jason and Scot show
this is episode 302 being recorded on Wednesday January 25th 2023 I’m your host Jason “Retailgeek” Goldberg and as usual I’m here with your co-host Scot Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason we have a very special guest today first of all this is a exclusive first look so some big
new industry Trend data were revealing on the show from one of our favorite guests for a long time lister’s I’m going to kind of tease you with a bit of a riddle he’s been here for episode 68 114 180
2:13 and now back 4302 that’s five episodes his title is interesting
principal and chief futurist consumer industry Deloitte Consulting LLP
and Jason I know you lured the length of your title over everyone in the industry but I’ve done the math your Chief Commerce strategy officer that’s four words this guest has principle I took and out because it doesn’t really count,
Chief futurist S3 consumer industry that’s five so he beats you in Tidal length as well
ladies and gentlemen welcome back to the show Kasey lobaugh.
[1:43] Hey Scott Jason how are you guys.
[1:46] We are awesome except for you dethroning me for most verbose title.
[1:51] Yeah actually before we created that title I went on LinkedIn and looked yours up and did the math so thank you for that.
[1:59] I need 25% More Than Jake.
[2:02] Well we normally don’t let Scott do public math on the show so I do have an intern fact-checking the titles but I had sounded right and then the other intern is on chat gbt right now writing a new title for me.
[2:13] That’s perfect that’s a good call.
[2:16] Yeah but speaking of unfair check things Casey I believe it is the case that five-time guest is a show record so congratulations on that.
[2:25] Great where do I pick up my parting gift.
[2:29] The interns will send that to.
[2:31] I’ll look for it.
[2:33] Yeah you have to part before you get.
[2:35] That’s right that’s right well thanks I appreciate you guys having me back on again you know after the first four times I thought maybe the fifth time maybe I’d get it right.
[2:45] Absolutely one I don’t know if I’ve ever mentioned this but the so one of your first visits you talked about the changing consumer and the great bifurcation and that played a big role in me starting spiffy so we
whenever I pitch spiffy I talk to potential investors and partners about
you know we are really focused on the convenience or any consumer and then they say do you have any research on that and I say well actually do and then I afford them the
the cherished copy of that that OG material you guys put out there on that that’s been a huge huge impact on me and starting a company so.
[3:23] Oh that’s amazing that’s very that’s amazing hopefully in our new work maybe you’ll discover some new opportunities maybe start two or three more companies guy.
[3:47] So Casey obviously most of our longtime listeners are going to be familiar with you but for the new listeners can you give us the the quick synopsis of your background and how you came into what I think is now a new role for you at Deloitte.
[4:04] Yeah it’s a new role but it’s also an evolution even Scott you know was mentioning the research we had done before and you’ll see that a lot of what we’ll talk about here Builds on the things we had done before but just just for background,
I think I’ve been at Deloitte now coming up on 27 years,
and and really the vast majority of the time that I’ve been at delete I’ve served in the retail industry.
First launching you know our e-commerce practice back in the early 2000s and then building our omni-channel strategy practice Within retailgeek.
And then most recently I’ve taken on this role on behalf of our firm knows it was somewhat reluctant and I’ll talk about that in a minute but the role is to think about the future of the industry.
And to think about the broader.
Collection of consumer sector so we will we talk a lot about retail but this includes Airlines consumer products Hospitality Auto you know the broad collection of the ways that consumers spend their discretionary
their discretionary cash.
[5:10] It’s fascinating and I think in the great tradition of corporate America you didn’t get to shed any of your old responsibilities as you took on the new ones is that true.
[5:18] That is true that it just just Stacks up.
[5:21] Other duties as assigned.
[5:23] Yeah I know I look I’ll talk a lot about the work that we’re doing here today but I do you know continue I have been serving clients and I continue to serve clients alongside that the duties the research the work that we’re going to talk about here today.
[5:36] But now that you have two jobs you make twice as much right.
[5:39] That’s right.
[5:41] Cool let’s let’s jump into this new research so
you know it’s the the future of the consumer industry and you’ve got you know you’re you’re nice enough to share a draft with Jason died and we’ve read through all that and there’s there’s probably six hours of conversation we could have its kind of both deep and wide
so maybe for listeners talk a little bit about the origin of the research the purpose and maybe a high level and then we can kind of pick where we want to dig in.
[6:12] Yeah sure thing
sure thing well first of all we like to think that we as a firm a really good with our clients you know helping them to navigate the next two three four years
but we also were sensing that there are a series of things going on happening in the environment and questions coming at us from our clients that were a bit longer,
you know in time Horizon sort of recognizing that there’s a series of things that perhaps are happening that may sort of radically impact
the next decade of our industry and so you know our leaders sort of convened and said you know we should,
dedicate some amount of time to throw thinking across a longer time Horizon and so for us we picked a 10 year time Horizon
and so we started to talk about doing some work about the future now you guys know me I’m somewhat of a contrarian.
[7:02] And Frank they look back in history of you know reports that are titled the future of by the way you can go Google,
the word the future of in you’ll find literally you know Millions if not billions of hits on Google with those words,
and historically what I found was that many of those you know efforts those research they tended to be prophecy based or prediction based and honestly if you go back in time and a lot of them really are not that good
and therefore I was contrarian saying look I don’t want to do that I don’t want to be part of,
of making a set of predictions and yeah I can go back in 1999 I remember report in 1999 that said RFID is the future of the retail industry.
[7:42] And here we are you know still not a material part of the industry,
ten years ago you remember this magic mirrors of the future of the department store anyway so you know over time you see a lot of those things and so as we talked about it I was the contrary instead I don’t think we should do this and Leadership said great,
you get to do it,
so I get the assignment but I actually think there’s a reason behind that the reason was is because I was a contrarian P because I was pessimistic about the idea of doing it and they are leadership thought maybe we would take a different approach.
[8:16] And honestly that’s where I started I asked myself how would we go about this in a way that would be different than predictions and prophecies,
you know how would we go about it in a way that I could actually be proud of what we what we’ve come up with and what you’ll hear when we talk about this is that what we haven’t done.
Is made predictions what we haven’t done is made prophecies what we have done is research deeply,
the things that are happening in our environment I’ll say environment very broadly that we believe are converging forces that will shape the next decade,
of our industry and so part of that also was how are we going to go about it,
you know previously like even Scott the research that you referred to earlier the great retail bifurcation it was myself and a few other practitioners we got together and we thought through and did the work this time I said I want to do it differently.
And so we went about convening a group of professionals experts,
that would be informative to the process in fact as we sit here today we’ve now involved over 800 professionals industry experts luminaries academics major industry trade groups,
you know have all participated either through workshops or a series of interviews and our ability to convene this kind of group,
as input and helping us to shape this was really I’d say is differentiated from anything that we’ve done in the past.
[9:44] And then of course we also have our deloitte’s Global state of the consumer tracker.
Where we post consumers on a monthly basis across 24 countries to better understand behaviors and intentions and that was part of this as well.
And so the whole intention of this process was broad inclusive thorough wide and differentiating a differentiating perspectives in really generational input.
And out of that came what we call the six forces shaping the future of the industry,
no there were literally hundred or more individual things that were happening that the group raised
instead this is important now what’s interesting is there’s no no one person
had the complete view you know the art The Economist wanted to talk about the things that they knew we had people who are sociologists they talked about the things they knew people in Auto talk about the things they knew but what we were able to do is really.
Collect this information organized it will organize those hundred or so things under what we call the six forces and then we went about doing the research to deeply understand those things,
so the first component is really the six horses and then we proceeded to think about the implications of those forces along three dimensions.
The First Dimension is markets and that’s what’s being sold who’s it being sold to how are we creating value.
[11:11] The second component of that was models what are the new business models how will business models change over the next decade and finally mechanics.
They really is operating model how are how are we changing in terms of how we.
Deploy labor how we think about operational decisions and really just the execution of the business,
so that’s really the two primary assets that come out six forces research and then what we call the 3m’s or the implications upon the industry.
[11:41] Cool why don’t you take us through the 64 forces at kind of a high level and maybe a little blurb on each just so we kind of know you know mentally where they fit in in the world.
[11:52] Yeah perfect so as I mentioned like,
100 or so things roll up to these six forces the first of which is really the changing consumer now you mentioned that Scott we had done some research in that previously around how is the consumer really changing well we were able to take that one and go much deeper.
Of course changes you know the changing consumer you know includes things like increased racial and ethnic diversity.
Changing sexuality and gender identity aging longevity shifting geographies it wealth inequality and generational wealth inequality.
Those are the kinds of things that begin to make up the changing consumer and each one of those we’ve done deep research on but that consumer also operates Within,
a shifting society and culture and so under society and culture you see things like delayed or declining marriage.
Delayed or declining homeownership certainly declining birth rates here in the US as well as most major developed economies.
[12:54] There’s things that have to do with education and the education gaps are declining,
subscription to religion those sorts of things live under society and culture and of course many of those things I just mentioned Define us as who we are as consumers as people and win
and what sort of purchase do we make when do we make those purchases Etc but what you begin to see already is,
I’ll say a theme of increased diversity that starting to really show up and we can come back to that idea but I use diversity here along multiple,
Dimensions to sort of talk about this Mosaic of consumers and behaviors that are starting to really become clear but then we move on to what we call exponential,
extech now what do I mean by extech well most of us in the industry you know when we think about technology likely think about infotech.
[13:45] But the reality is there’s a broad set of technologies that are all moving,
you know and maturing it very rapid rates and converging so not only is it infotech but it’s biotech,
it’s Material Science its Sciences it relates to space you know and other Technologies as well that are advancing that usually fall outside of what you know our purview might normally be for,
infotech then the fourth category is what we call radical industry upheaval.
[14:17] And really if you begin to dig in there you see real declining Financial Health.
You know at the Top Line the consumer spending has been growing at about 3.6 percent kegger.
Over a 10-year period the vast majority of traditional clients would love to have a 3.6% kegger growth over 10 years so the consumer appears to be healthier than many of the players in the industry.
We also see declining barriers to entry a shift from products to services and a whole collection of other things that really begin to impact the industry the health of the industry Etc.
[14:53] And of course all of this operates within extreme climate and planet.
Three you know we’d be remiss if we didn’t talk about global warming rising sea levels DeForest deforestation natural disasters things like that that certainly have us on a dire trajectory.
But there’s also some signs of Hope here too as that you know natural green energy is now cheaper per kilowatt hour.
Then petroleum-based energy or coal-based energy and that’s actually a good Tipping Point so there’s some there’s some good news on that front too now.
The issue for our industry though is that we’re going to be we’re about 3.5 billion consumers globally we’re going to be adding another 2 billion.
Another two billion in the next decade.
So we’re already on a dire trajectory Yad 22 billion additional consumers by the way over 80% of those will be in Asia and you have to begin to look at what,
you know how that slope of that line increases and what do we do differently our industry produces 60%.
Of the greenhouse gases that are produced by any industry and so adding additional 2 billion consumers really amplifies that dire trajectory.
[16:05] And finally shifting economics policy and Power,
because the whole industry operates within those dimensions of geopolitics and local politics changing monetary policy you know power and and power structures and there’s some real,
there’s some real changes happening there we’re we see you know our aversion to nationalism we see these things like reshoring happening for production work
political extremism polarization,
there’s some issues around immigration the difference between how important it is for us as a country versus some of the political positions in trends that we see around resistance to immigration within the country anyway all of these things matter.
And all of these six forces you know are converging colliding coming together and so you sort of have to have this broad understanding of the forces in order to begin to ask okay what happens when you bring these forces together.
[17:04] So for listeners that are that’s a lot to chew on so.
So you know and we as I mentioned there’s no way we’re going to cover even you know like more than one or two of the six and then the underlying pieces our listeners are largely in the retailgeek
e-commerce world if you were to kind of cherry pick you know a couple of these to dive into and you know with a
a mind towards some action ability and you know where where would you start.
[17:36] Yeah so I started on this word diversity,
and I’m going to I’m going to pause there for a minute because the way I’m using the word has multiple Dimensions to it and sometimes that when we talk about diversity sometimes people think about racial or ethnic diversity which certainly is a component here and it matters,
you know for example if you looked at the data and if you got out to The Cutting Edge and it just let’s just compare for a minute the baby boomer generation was 75 percent White.
[18:03] Meanwhile the Gen Z is 52 percent white with 25% identifying as Hispanic so just there just between those two generations there’s a stark difference in terms of the diversity on that one dimension,
Now by 2044 is projected that most of the US population will be non-white and meanwhile those identifying as 2 plus races we’re will nearly double.
Now when you couple with that another dimension of diversity,
you know aging and Longevity let’s talk about that for a second because there’s a real change that’s happening over the next decade on that front as well.
So if you go back in time and you look at the Aging of the population what you see is a real dramatic increase from the 70s until
until today there’s already been a dramatic increase you know moving from the 20s into into the late 30s as the average age of a citizen in the United States
soon we’ll be at place where we’ve got more people over 60 then we have under 18 to real Tipping Point in addition to that we’ve got.
[19:07] Real scientific breakthroughs that are happening daily it seems like that have the potential to really increase longevity.
And so when you put those things together we’re talking about increased diversity needs wants,
desires along a lot of different dimensions you couple with that wealth inequality the great retail bifurcation Scott that we mentioned before and it just means that there’s a broader Mosaic one of the things I like to talk about often is that our industry,
was built for Mass not for a mosaic.
And there’s this movement afoot from Mass to micro and what the changing consumer and changing society and culture tell me is that that movement will only accelerate in the coming decade.
So how do you think about that shift from Mass to micro how do you build.
Your business to be able to execute from Mass to micro and of course in the e-commerce world that’s probably not that.
You know it’s not that advanced to sort of think about things like personalization but I think it goes much deeper than that when you really think about Mass to micro we’re actually talking about you know how do you create an assortment That Matters to.
[20:20] You know to the right group of people how do you build a brand so the explosion of Brands channels formats all of that is happening around us.
And what we’ve got to do is we’ve got to figure out how do you compete and how do you get ahead of that you know if you look at some of the data just around.
Gender identity there’s data that says.
In the coming decade and I think this was a Gallup poll they said that one in four gyms ears globally.
Believe that they’ll change their gender identity once in their lifetime.
[20:54] Okay so now if you play that out you think about the coming decade think about the traditional department store that organizes themselves by here’s the men’s department and here’s the women’s Department.
What we’re seeing is this Mosaic of how you identify Mosaic of this diversity and how we have to think about appealing to smaller and smaller you know audiences is really going to be Amplified if you really look at the data around the consumer and society and culture,
and I actually think that’s really actionable today in a mass.
Environment we have a value chain where we make big at scale decisions and most of those decisions are made by humans.
As you move down into more and more granular execution.
It becomes very difficult to execute in the same way so we actually have to begin to lean on new ways to operate that’s where Predictive Analytics comes in automation comes in and all of those I believe are very actionable
as we sit here today so hopefully Scott that was at least a highlight of one of the things that jumps out at me.
[21:56] Wow you know it’s funny because that mask to micro thing
comes up in a number of our shows we talk about it sometimes in the context of like she in that there’s sort of you know this old model where you know Mickey Drexler at the Gap would you no tell everyone what the cool clothes to wear is and GAP would sell a ton of that.
That outfit and that the you know the interesting part of Sheehan is that they don’t sell a ton of anything that they you know,
identify that Mosaic of consumer bases and make a you know small batches of a lot of different stuff to sell the all those different people.
And it is funny I was doing an interview with a fashion reporter earlier today and she was asking me about the future of a.
A athleisure company she was interested in and I sort of talked about that that trend from Mass to micro and she she thought I was from Mars.
[22:50] Um and that brings up like one of my first questions about the research because you know I read the research I have a couple macro questions I want to ask but the.
One of the things I always struggle with when I think about the future is trying to get the timing right and.
Like I distinctly remember early in my career I worked at Blockbuster entertainment and we were trying to do video on demand like.
Ten years before Netflix was invented and we had all these technical problems and we partnered with IBM IBM brought in this Chief scientist and he’s like
don’t worry about any of those storage problems because there’s this new technology called the Blue laser in the blue laser is going to solve all these storage problems and.
Like the only problem was the blue laser was 10 years away from being invented and so it,
it did and other inventions solve solve that storage problem but not in the time Horizon we had right and and so there was part of me that felt bad like you know I’m talking to this reporter about that mask to micro-trend but like,
is that really going to happen to athleisure fast enough that is relevant to her article.
Seems really hard to predict like did you guys when you were doing all these interviews.
Did you did you try to think about the dimension of time or how did you think about the dimension of of time in some of these transformations.
[24:11] You know I love that question I want to answer it in two different ways the first is you know when we talk about Mass to micro I want to separate the idea that the market.
[24:20] Is already moving Mass to micro whether or not you know individual companies are okay so if you took that athleisure wear and you said okay let me go find the niche brands that are already appealing to you know,
Niche micro segments on you know on whatever their favorite social media platform is you’re going to discover some I could tell you I’ve got a 16 to 17 year old in my house and I’ve discovered,
new in particular athleisure wear brands that are appealing to them you know my son goes to the gym and there’s there’s these gym brands that have come up so I what I like to say is whether or not
you do you think Master micro is viable for your company I would say the market is already moving that late second of all I’d say actually if you looked at the vast majority of the big,
is look at the big retailers they’re already moving down this path they may just not know it.
You know I talked about the explosion of Brands channels formats service models that’s already happening you know pick your favorite you know large retailer and recognize that the word omni-channel you know inherently means optionality,
picking up curbside is optionally all of that is optionality now the problem for most of those companies have been there pursuing Mass to micro but they’re still trying to use a mass operating model,
to execute micro and some of that you know it begins to show up in the financials pretty significantly now let me go to another another.
[25:45] Mention here are another way to respond to your question because it definitely came up and it really the conversation about the metaverse
this is the this is the one that I try and avoid but I’m actually going to put it on the table and tell you how I think about it because this very reason of like is it real when we’ll be Regal will we all wear goggles you know I don’t believe it I do believe it whatever that you know,
that position is.
What we did is we said well let’s look at this and you guys will appreciate this from our days back you know together on the board of directors that shot dot-org I always tell the stories about this because,
whether or not you know we’re going to wear goggles I’m not going to talk about I’m not going to predict it I don’t know when it might happen but I do know and we just released a report this week.
From our future of the consumer industry work around the growth of digital goods and services.
[26:33] So we assess already that digital goods and services by this by the way I don’t mean digital access to physical goods and services actual digital goods and services now you know equates for about 3%.
Of the consumers wallets,
day three percent that may not seem like that much until you realize that apparel is around 3% and consumer electronics is around 3% now if you look at it that way it’s actually a significant number already.
And you know if when or where a RV are any of those things really began to take off that number will only accelerate.
So what I try and do the say hey let’s not argue about the form factor let’s not argue about let’s focus on what’s real and what’s real today is revenue,
real Revenue that’s already flowing now the issue today is that the vast majority of that revenue flowing to digital goods and services,
is not flowing to any of our you know what I would call traditional consumer industry companies so consumer spending beginning to fragment way flowing to new goods and services it will only accelerate.
You know once my equation back when I equate it back to our shop that org days was you remember when most people were offline.
And then when their office had high speed internet they’d show up in the show up at their office and they suddenly be online and that’s that was the.
[27:58] The Genesis of cyber monday right and so I use that to say look there was a period of time where most people weren’t online and then suddenly they were and,
and that accelerated sales and the same things true today most of us spend most of our time not you know wearing a headset,
you know at the point in time where that actually becomes real that number will only accelerate so anyway so I try and have a different conversation.
And try and demonstrate where and how you can track what is real about it.
[28:29] Yeah the digital grids example was great and it’s funny because I
as soon as I read that like I jumped into my Department of Commerce data I’m saying like what other categories are like
similar order of magnitude and yeah it’s a it’s a bunch of giant industries that we spent a lot of time and and it is it is interesting because,
digital Goods to me is this new label you don’t hear people talking about it that much but there are lots of other labels that have like digital in front of them.
[28:57] Sort of feels like the label is expiring because the distinction no longer matters right so you know we all started in an e-commerce and today it’s really more.
Commerce the in the industrial revolution they used to call factories electric factories to differentiate them from the ones that ran on Steam right and today it’s just factories like I wonder if we’re going to go through this whole evolution,
where there’s this this new product called digital goods and eventually we’re not going to care about the distinction between the physical Goods in the digital ones and you know will be,
3D printing digital goods and all this other stuff it’s fascinating to think about the future which of course your,
your report like instantly took my mind to but one of my big questions reading the whole report in aggregate is there’s some really positive optimistic things about the future in here but there’s also a lot of.
Negative things and I’m curious like in the aggregate did you I’ll confess I read it and I felt a little depressed like I.
And I like am I a typical in that regard like like is there is there a way in which this is a slightly Bleak future or am I just.
[30:08] No I think I.
No I think it’s a good good observation and actually it’s part of the question like here’s a really interesting thing we had this workshops where we had these professionals you know from our industry join in and there’d be two tables.
They’d all be presented with the same information in one table would would decide that the future is dystopian and dark and they’re very worried about where this is all heading.
The second table have the same exact information and decide that there’s a utopian future.
And within this you know actually as a ton of possibility and and you know great progress right now the question you know if I was to predict I’d have to say okay which one of those Futures is the right one and the reality is they’re both,
possible they’re both pot like when you dig into the state of you realize both the YouTube utopian future and dystopian future are possible so then the real question is.
What’s the difference.
And that’s really where I love you know we’ve headed to say the difference has to do with the choices that we will make in the coming years that guide us one direction or another.
In fact we refer to our report in our whole effort as what we call buying into better because there’s a lot of change in fact there’s.
There’s more change that I see that it’s going to hit us in the next decade I’ll make the last decade pale in comparison.
[31:28] And those changes are up against some real challenges with trust and planet and privacy that we have to Grapple with.
And we actually have to buy into better meaning as consumers we have to be smart and make the right choices but also as Executives as owners of capital you know as Citizens we have to play a part,
and we actually have to you know help,
ensure that we’re making the right decisions as we’re navigating through to take us to the right utopian future you know I believe there is a utopian future I believe that we collectively just think about the audience here,
on your podcast the agency that we collectively have Deloitte is a massive firm where a massive firm with a lot of influence and we look at buying into better as our own North Star as well what role will we play.
So I think it’s the right question is it utopian or dystopian but really what’s more important are what are the choices and what role are we all going to play,
in making sure that we’re navigating that future.
[32:28] That that is totally fair I’ll be excited to hear your answer on that the
the other thing that really jumped out at me like we’ve known each other for a while and I’m sort of a fan of your thought process and I like the fact that you tend to be a little cynical and I,
I suspect I probably am to the I don’t suspect I know but the.
I’ll confess I do this this presentation quite a bit where I debunked disruption where I talked about how I everybody always thinks like that whatever they’re working on is the biggest disruption in the history of mankind and that you know every little thing is some,
when unique inflection point in human history and how like.
Most of them aren’t that relevant in the in the overall scheme of things and so and so then you know I read your study in there we’re talking about all these things that are sort of,
exponential change all these things changing faster than Moore’s Law and you know it made me wonder huh like.
[33:31] Is this a unique Confluence of factors.
You know is there something special about this time that there’s more of these interdependent factors that are changing so quickly that you know the world really is.
Getting disrupted in some unusual way or like.
You know has this been how we made progress like throughout all history and I guess I was sort of curious if you had a.
POV how unique our current moment in time is.
[34:02] So I you’re right I start off as I said I’m a contrary I’m somewhat cynical as I start out but it has we’ve researched across these hundred some topics I realized.
That I while on the headline I thought I understood some of these topics I thought I understood but only when we got out on The Cutting Edge really understood what was happening did did it really change my point of view I mean look if you you mentioned,
you know chat GPT earlier in the call if you’ve paid attention to where that was six months ago to where it is today,
where you know the the other generative AI things are you can actually see this idea in fact Stanford University through their AI index says,
AI is now it’s not going at Moore’s Law it’s actually doubling every three months.
[34:48] And if you and I assume that you’ve been playing with these tools and this generative AI That’s now available to us if you’ve been paying attention over the six months you can actually really see.
The degree and the speed that that’s changing now meanwhile if you go into and spend some time like I spent a lot of time with our Healthcare practice because of the
the convergence of healthcare and consumer which is a whole nother topic we could go into but if you begin to look at the breakthroughs that have happened just in the last 12 months,
you know at the intersection of artificial intelligence and health if you look at it the advances that have happened with crispr which is Gene editing in the last year.
You begin to see like there really is some inflection point that’s happening and it’s really happening at the convergence of these forces,
you know I think too often we try and pick one and say oh here’s here’s one like drone delivery,
okay let’s figure out what the implication of that one might be but the reality is it’s the it’s the convergence of these topics that actually begin to.
At least for me brought me to a different place than I was when I started this this work.
[35:59] Yeah and side note in preparation for the show I did ask Chad gbt what the the future of the consumer industry was and it came back with a one-word answer which is metaverse.
[36:10] I thought it was going to say hey there’s six forces and I said oh my gosh I’m out of a job.
[36:15] Yeah we’ll see the thing is it’s chat gbt you know is this this model 3 engine is only trained on,
like you know a bunch of material from 20/20 I want to,
9:21 maybe yeah and so so it was kind of impressive that it picked the metaverse and and of course next year it will it will have all your the the version for the engine will be much better and have your stuff in it.
[36:40] Hey I don’t know if you picked up on this on the report we within the report we’ve got the icons of the six forces.
Those icons were developed by generative AI so we typed in text and were able to get the icons that represented 06 forces so when you look at the report you know there’s a little bit of an Easter egg hunt for you.
[36:58] Cool it lets a double click on a i a little bit so you mentioned generative so there’s the the graphic generative side and the verbal or textual
these are all cool but what’s something practical listeners can take away so you know I’m I’m sitting at a you know
a retailer e-commerce shop and I am director of something you know what’s their take away from this there’s diversity of of all flavors there’s a lot coming at you 100 things how do they How do they
pull this into something in their day job.
[37:35] Yeah well there’s there’s a lot of use cases that I’ve seen that have been posted on Twitter,
you know relative to hey how can I do my day job today differently and some of those have to do with creating copy some of those have to do with I’ve seen SEO optimization.
[37:54] I’ve seen even complex things like taking a podcast like this and giving me a summary so I think there’s some real practical things that exist today but actually when I look forward what’s more becomes more interesting to me are,
the built for use cases,
and we’re starting to see those like there’s one of the Technologies is open source you know a lot of this is done through an organization where there’s a lot of control around it but there’s also Alternatives that are open source one of which have generative Ai and it you know
went open source I think about six months ago and is already spawned something like 2000 you know built for use startups.
So for example in e-commerce one of my clients who said once you know creating the content for e-commerce was like feeding the Beast.
We have this big assortment we’re constantly changing,
the assortment you know next spring we’re going to have a whole different assortment we need images we need copy we need attribution and that is just a huge Beast to keep up with.
And in my mind I can very easily see that being a tremendous use case,
for a built for use application that would allow us to and I expect that that will be coming soon that will allow us to move very quickly you know in that feeding the Beast scenario.
[39:13] Tell it any other so we’ve talked a bit about the consumer and extech with a i any of the other six buckets you want to dive into that you think listeners would find interesting or actionable.
[39:27] Let me talk about one that that really stood out for me now yeah you have to back up a minute just think about the consumer industry for a minute but if you think about the convergence of Industries,
and in particular the convergence of the traditional consumer industry retail even and Healthcare,
you know really driven by the convergence of infotech and biotech.
You can begin to see the starting to take shape today and our deloitte’s Healthcare practice looks at this shift that’s occurring so we’re there’s a shift happening with.
You know from treating sick people to Wellness.
And as that shift occurs what’s interesting is the money that’s spent you know today treating sick people is largely Insurance driven Wellness though is a consumer category.
And in 2019 we estimated that that market in the u.s. to be a 700 billion dollar market.
[40:22] And our Healthcare practice is estimated by 2040 it’ll be a five trillion dollar market.
I just by way of comparison you know retail in the u.s. is roughly a five trillion dollar market so it shows the explosive growth
and certainly if you look at some of the major retailers you can see the recognition of the importance of healthcare converging with traditional retail or Healthcare becoming a bigger and bigger consumer category now depends on you know.
Yeah whoever The Listener is how they want to interpret that but what it tells me is with the Aging population longevity growth
or even wealth inequality and who has money to spend on you know Wellness that it will be a significant growth Market in the consumer and I think there’s,
real opportunity for many traditional e-commerce companies to think about you know how they’ll play as part of that you know growth opportunity.
[41:19] Got it
um how about you know your colleagues in the auto segment published a lot of really cool things and you kind of healthcare agree with you it’s gonna go through it needs to right it’s like so painfully obvious whenever you touch that system that’s,
broken all over the place,
so I’m excited that that one’s going to get disrupted and then selfishly how does your framework fold into the Auto industry.
[41:47] Yeah it actually works I spent some time recently with one of the major.
Auto company with their CEO direct reports working through what we’ve discovered and what the implications are you know the things like Mass to micro,
also apply their you know of course the Auto industry is going to go through a major transformation,
where they’re moving from combustion engines to Electric but it’s not just like hey same car take out this engine put you know a new,
electric one in actually is a radical change in manufacturing and what the platform is but there’s also this digital goods and services thing I mentioned before,
because if you really look at where margin will come from and where Revenue will come from into the future you could begin to see you know you’ll buy the,
the platform which will be the car you’ll have software which will be the digital goods and services that you subscribe to and you can see that today with certainly with the leading electronic or electric
car company today is being able to subscribe to capability and you could begin to see that shift from,
you know traditional Revenue to new Revenue models so there’s major transformation that’s happening there
for sure in fact it may be one of the industries that that’s undergoing the most radical transformation within consumer but all of the same sorts of things that I’ve highlighted here,
actually apply there as well.
[43:11] I’m asking for a friend do you see any specific disruptions in how automobiles are cleaned coming down the.
[43:17] Yeah I’m thinking that most people will be getting us a spiffy subscription.
[43:24] I think subscription is the way to go.
[43:26] The good news is all you knowledge workers thought you were safe and it was the people out doing stuff but it’s going to invert on you so,
AI is going to take the office worker jobs first a mill will still need people to clean things and move them around Force.
[43:41] Good point.
[43:43] I don’t know we’ve talked about this on the show before but like you know whenever you get a CES and they show all these clever automations there’s always a robot making coffee.
And what’s hysterical about that is the robot is always doing the good job the robot is always like.
Pulling the shot and making the beautiful latte art on top of the coffee and then a poor human comes in behind the robot and empties all the coffee grinds out of the machine and I’m I’m like yeah it seems like we’re automating the.
The wrong wrong side of a lot of these equations.
[44:16] Do you hit on Automation and that’s a topic I could go to if that’s.
Well here because when you begin to look at the move for master micro I said earlier that the only way you can really make that move,
efficiently effectively is to move from making,
Mass decisions to making more granular decisions that are data-driven and then frankly our automated in their execution and so there’s you know there’s a good.
Shift of automation that will happen in this next decade but some people predict that between 50 and 60 million jobs United States could be automated away in the next decade.
Now keep that in mind that that’s in a that’s not a base of about 190 million jobs that’s a big significant number and on one hand there’s efficiency Effectiveness there’s granularity there’s you know.
This master micro shift that’s all good.
But on the other side there’s what we call Workforce extremes because we have to care about the people who will be you know automated out of their jobs.
If that number is even close you know then we have to think actively about how do we ensure that.
[45:27] You know that those employees find their ways to the new jobs and by the way some people can argue and I get this argument all the time hey in history every time we ever.
Automated away jobs we create a new jobs and that may be that may be true.
However a lot of this automation that’s occurring it’s I mean it’s occurring across manual work cognitive work and even creative work.
So there’s significant you know there’s significant change on that front coming the thing that was as a retail you know,
lover of the retail industry I think about those that those workers are also our consumers,
you know we need we need a healthy middle class right we need a healthy consumer.
Category you know in order for our industry to thrive so on one hand there’s a lot coming on the other hand there’s implications of that that we ought to be ahead of thinking about you know and worried about because there’s big implications that come down,
from from that drastic of a move.
[46:27] Yeah I mean to be honest Casey when I read your the whole research in whole that was my biggest takeaway is like hey two billion more people they’re all going to live live live way longer we have an opportunity to sell a lot more stuff
, the those consumers just have to be in a condition in which they can buy.
Um so I’ll certainly be rooting for that,
I am curious though like what the future of this report is for you I do you envision,
redoing it every year is this something you will revisit periodically and would you expect it to change very much from year to year have you thought about that yet.
[47:09] Yeah we have in fact I’m glad you asked that question because while we may seem like we’re here talking about a report we’re actually talking about a program
what I mean by a program is
for Deloitte in our consumer industry we’ve actually launched the future of the consumer industry not as a report but an ongoing program you know a center and office that will be continually,
looking at the forces keeping this up to date,
but also you know it’s a collection of research is collection of insights it’s collection of tools we’re actively serving clients bringing this content to bear
and we’ve got all sorts of as workshops and application that comes along with it so that’s this is the beginning,
of that as an ongoing program so you’ll be able to find Us online you’ll be able to stay up to speed,
on the different reports that we’re going to continue to put out that that build upon
this work that we’re starting with even I mentioned before the digital goods and services report that we just launched earlier in the week is one of the offshoots that come out of this research and there will be more.
[48:16] Brickell so you’ve this is called job security it sounds like you’ve planted a flag and now you’ll be able to kind of keep growing from here.
[48:23] Yeah it’s look for me it’s cool like this is energizing is interesting
yeah I love to be able to think about this in the context of the kind of work that you guys do the kind of work that I get an opportunity to do
so you know I’m thrilled that Deloitte has given me the opportunity to do this energize the people that I have the opportunity to work from and learn from are just phenomenal,
you know so I couldn’t ask for more rather than hey understand and help us make a difference.
[48:51] To zoom back out you kind of at the top you said you know there was two tables and some ended up with the dystopian kind of view of things kind of a Hunger Games scenario and then the others were were utopian what do you think that Utopia looks like if we kind of pull all the levers towards the
best possible outcome.
[49:10] Yeah I mean you can see a path in some of these forces that actually say Humanity will be you know much better you know the ability to address.
Illness sickness the ability to you know create the kind of value that actually allows.
You know the additional two billion consumers the two billion people that to live and thrive.
Those things exist the ability to address
education gaps you know every one of these things that you look at today in my saves – you go look there’s possibilities that are coming that both have to do with technology but they also have to do with changing values
you know of of younger generations and their desire to address some of these issues.
So there is real utopian possibility that lives in you know within these forces that’s right we really do call it buying it a better because we believe better,
is an absolute possible outcome but we have to be active we have to understand the choices that are before us and then as Executives of companies we have to participate not just as,
you know you know in service of.
Shareholder value but we have to serve you know a broader stakeholder and make sure that we’re thinking about that.
[50:33] I love that note of optimism and that is actually going to be a great place to leave it because we have
Perfectly Used up our allotted time but I want to assure listeners we’re going to put a link in the show notes to the Delight landing page so you can get a copy of this first,
report and dive into it yourself and I assume we’ll find all the following reports there is well
so Casey thank you so much for taking time out of your schedule and sharing some new knowledge bombs with us.
[51:03] Thank you guys for having me again I always love getting together with you guys and talking.
[51:08] Yeah and if listeners want to follow your socials where you most active.
[51:13] Well so I’m on Twitter at KL Oba ughh.
I’m also on LinkedIn you’ll find the Casey low bar and and we will be continuing this conversation there and Publishing you know an ongoing thread of conversation and information if this is what’s you know interesting to you.
[51:33] Very cool as Jason said we really appreciate it I sidebar with a couple of teenagers I thought you were gonna throw out your Tick-Tock but I guess I guess you haven’t really super like like Jason are you a little too shy for that platform I.
[51:45] I referenced I reference my daughter earlier as as being on the tick tube.
[51:50] Yes absolutely well we really appreciate it and you know this early look for the Pod we appreciate you and welcome to the been on the podcast five times Hall of Fame.
[52:02] Well I guess I’ll see you the six-time sometime soon.
[52:06] We look forward to that and as always in people got value out of this show you know the best way to repay us is
to write that five star review on iTunes if you can log on the chat gbt you can actually get it to write the review for you and just paste it right in into iTunes and until next time. Happy commercing.