Opinions And Ramblings By Adam Kmiec On All Things

2017 SXSW Recap – A Marketer’s Point of View

SXSW March 10 - 19, 2017. Credit SXSW.com

Earlier this month, the annual SXSW Interactive Festival, took place in Austin, TX. I attended, along with my colleague. We divided and conquered the massive amount of content, sessions, trade floors and vendors, over 5-days. The following is a recap of key themes and implications.

SXSW @ Macro Level

  1. SXSW was once the place for major announcement and releases. For example, foursquare was launched at SXSW is 2009 and twitter in 2007. This year’s SXSW followed a theme from the past 5 years or so: it’s less about major launches, more about iterative improvements. You could see this on the trade floor, where magic mirrors are no longer large, heavy and expensive, but smaller, lighter, thinner and nearing a price point for the average consumer.
  2. SXSW was founded on the idea of bringing people closer to “tech.” 10 years ago, brands/non-tech companies realized there was value in descending on SXSW to connect with tech companies. 5 years ago, brands started to have a sizable presence. It was only 2 years ago that McDonald’s spent more than $10MM+ to “own” SXSW and connect with millennials. This year, there was a notable shift. There were very few brand activations. Filling their spots were media, entertainment and marketing platforms.
  3. The “main stage” and the official conference schedule were once the big draws. This year, there were certainly some major headliners. Former VP, Joe Biden discussed fighting cancer and Cheryl Boone Isaacs, the President of the Academy of Motion Picture Arts and Sciences, tackled, among many things, diversity and inclusion. As important as the main stage was, this year was all about the rise of the small stage. Seemingly every tech and media company hosted their own 1 to 2 day event of content. For example, my colleague and I, took in a great day of content, hosted by our partner, Bazaar Voice. The day ended with a panel featuring Ja Rule. Yes, that Ja Rule. He owns a media company now and is disintermediating the business of connecting artists with brands. Basically, you don’t need a SXSW pass to get great content.

Connected Consumer and Retail

  1. Wearables are moving from bracelets and watches that track things, to “fabric” that connects you to the world. After initially being announced at Google I/O, summit attendees could try on the Levi’s/Google smart jacket. There were smart socks, smart shirts and smart sunglasses. Wareable.com has a great recap on all things wearable at SXSW 2017. Also, this session did a great job of saying what must be said; consumers now expect their tech to be fashionable. If it’s not, they won’t wear it.
  2. Last mile delivery is killing every industry. At least that was the prevailing theme from restaurants, clothing retailers and big box stores. I watched more than one panel express the fact that business models like GrubHub are simply not sustainable. Restaurants are paying GrubHub 30% on the value of the order, potentially eating the delivery cost and then losing ~18% on each order. Traditional Brick and Mortar retailers are feeling the same squeeze. The name on everyone’s lips was Amazon. And how could it not be when you could check out their delivery drones?
  3. Politics aside, the clear universally agreed to pro of the new White House, was the focus on deregulation. As a SXSW attendee, we saw the problems of over-regulation, up close. Uber and Lyft, both pulled out of Austin due to increased regulation. Austin is a city with virtually no public transportation and a limited taxi service. When you have 100K+ people ascend on your city, transportation is a big deal. With Uber and Lyft gone, several new startups came in to fill the void. Under normal demand, they’ve done just fine. But, the increased demand of SXSW crushed them and exposed several weaknesses. I suspect we’ll see Uber and Lyft back. It’s not just ride-sharing where deregulation was prominent. The business of legalized recreational or medicinal marijuana was everywhere. There were sessions devoted to everything from supply chain to its positive benefits on pro sports athletes. If there’s a supply chain rife for disruption and innovation, this is it.

Losing Steam

  1. Snapchat: every panel lambasted the platform and indicated it was an example of a new bubble.
  2. VR: as the head of ecommerce for a major retailer and brand said, “I want to make real money, not virtual money.”
  3. Wearables: as mentioned above, there’s less interest in the traditional wearable, which looks like a watch, bracelet, wristband, etc.

Health, Beauty and Bots

  1. Health topics were at the forefront of panels, sessions. Even the interactive badges promoted health thanks to the sponsorship by Austin-based tele-health startup, Medici who had street teams around town promoting text with a doctor services in their app. The overall theme is something we’ve known for years, technology and health go hand in hand. From AI capturing data to predict early signs of disease or health problems to blood tests that will identify the foods that work best for your body, there is no shortage of improved ways of monitoring consumer health.
  2. Decoded Fashion hosted the best beauty panels for brands and influencers outside of the main conference sessions. Panelists stressed the importance of using data to tell the story. This allows brands to understand the needs and patterns of the customer to provide the best beauty recommendations and experience. The use of the influencer can help the success of the brand but it’s important to note that this doesn’t have to be the person with millions of followers. E.L.F. Cosmetics is taking the approach of engaging their best customers on Instagram as “micro-influencers.” These influencers who have a thousand or less followers on Instagram have an 8% engagement rate compared to the 1.7% on average when the base grows to a million followers. Beyond panels, the expo floor showcased the updated technology for the beauty customer. The Hi-Mirror scanned your face to alert you of any current issues or upcoming risks like sun spots or wrinkles and provide recommendations of the best products for your skin.
  3. Rise of the bots was not only the name of one of the many panels but it seemed to be the catchphrase of SXSW. Many sessions made some mention of using chatbots as a means for intelligent conversation with a customer. When considering a chatbot implementation, there should be a clear use case for a problem you are trying to solve for the customer. To avoid falling into the trap of the latest gimmick, companies need to keep the conversation simple and know the audience. As the usage of the bot grows, so does the intelligence making it more predictive and better for customers. SXSW introduced their own chatbot Abby who answered over 56,000 questions during the conference. The top users of the bot became more active each day which alludes to the stickiness of bot. Even though chatbots took over SXSW, it was still to be determined if consumers will be as receptive.

Other Good Recaps to Read

  1. Bazaar Voice has 2 great recaps. Check out this one and this one.
  2. HuffPo discusses retail, women in power and the hype around VR/AR.
  3. Fortune talks empathy and AI.
  4. Mobile Business Insights covers everything from autonomous cars to health tech.

If you made it this far, thank you. We know it’s a lot to digest. Please pass on feedback and/or questions.