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3 things to watch, coming out of SXSW Interactive

by Neal Larkin

Reporting live from Austin

South by Southwest (SXSW) is a contradiction in many ways — it’s been around for 30 years, yet remains forward-looking and innovative; it’s set in Texas, yet attracts talent from all over the world; and it describes itself as “interactive” and tech-specific but spans topics as broad as government and health. What remains the same every March in Austin is that SXSW is a popular destination for those working in design and digital (along with film and music) to discuss the latest trends in emerging technology.

I’ve been attending SXSW for more than a decade, first as member of frog and later as part of Carbon12, which joined McKinsey Digital Labs’ Experience Design team last fall. But this was the first year I attended as part of McKinsey — helping introduce Digital McKinsey to the SXSW crowd, at our invitation-only event in our Austin studio. There is always buzz coming out of the event — launching Foursquare! debuting the Oculus Rift! — and this year was no exception. Here are the three design themes that had people talking at SXSW 2017:

(1) The Smart Home
Our Experience Design team has already cited the ‘smart home’ as a top trend, but we’re seeing that it’s still anyone’s game — big brands and small startups are all vying to be allowed entry into people’s houses. It used to be just TVs, and later kitchen appliances, but now we have “assistants” like Google Home and Amazon Alexa. The biggest barrier to these companies winning the battle to become the center of your Smart Home is they are all going for gold. Most of these companies are trying to create closed ecosystems to their suite of products in the hopes of replicating Apple’s success in the past.

Time will show if any one large brand “owns” the home or if consumers will opt for a portfolio of brands.. The victor of this competition for our hearts and homes will be the player that can thread the needle through a narrow hole: tastefully design a conversational hub accessible throughout the home that’s open for developers and 3rd party manufacturers to contribute while ALSO managing privacy and security effectively. Being the go-to gadget in the home carries great benefits, but also significant risks since it will bear the brunt of consumer anger when things go wrong (whether it’s the hub gadget’s fault or not).

(2) Voice and chat user experience design
Related to the connected home, a new design discipline is starting to emerge in chat and voice experience design. With Alexa and Apple’s Siri, the experience has shifted from industrial to digital and now basic verbal and gesture commands. The question remains, how to create a user interface that mimics natural human communication and feels like a real conversation? For products like these to become widely adopted, this is a critical question to answer. The current awkward experiences of talking to a robot, being misunderstood and having to repeat yourself (especially in a loud, crowded room of people) needs to be resolved. This has far reaching impacts for products in industries ranging from Smart Connected Homes to Automobiles and advanced robotics.

(3) Virtual Reality (VR) and Augmented Reality (AR)
While VR has been around for decades now, no one has managed identify a breakthrough consumer use case for the technology. The biggest roadblock for VR is its limitations to a single user or solo activity; for example, a husband and wife don’t typically sit down on their sofa and each plug into a headset to watch TV. However just looking at the news it seems there are growing investments in this area, from Google (its Daydream product), Facebook, Sony, eBay and HTC to list a few.

AR has been making strides and seems to be overcoming the use case and solo activity issues. AR is an immersive technology that overlays a computer generated image on a user’s view of the real world; for example, in 2016 Nintendo launched what became a smash hit, Pokemon Go. AR is already making strides in education, workplace on-the-job training, retail industry — and perhaps best of all many industries love it because of how its advertising opportunities being tied to the real world. Many are rushing to the market, with Apple possibly being the poised to be biggest leader with the iPhone 8 [reportedly later this year] being the first AR hardware with mass adoption. Amazon is working to enter the AR space through Alexa and other devices that are predicted to eventually have cameras.

What can I do with these trends?

Working with designers keen to experiment with these emerging trends is necessary but not sufficient. In his 2017 Design in Tech Report, industry luminary John Maeda cited the importance of inclusion among the people and processes of any organization. Having a diverse array of backgrounds and perspectives is a critical part of the creative process, not only the users but also the designers themselves.

If your organization is keen to invest in this space, make sure there is a measurable business outcome tied to it. Big name companies are gambling and investing in technologies like AR and VR, but the winner will be the one that can tie the technology back to a clear-cut brand or business objective. Whichever wins the [VHS vs Betamax] battle, will have far reaching effects in the future of design for consumer products, connected homes, enterprise / business and education. This is also perhaps the next big exciting area for digital design to conquer.

Another driver for winning this battle will be when design has finally created a set of accepted standards and design principles that ultimately drives mass adoption of the user experience. At Digital Labs’ Austin studio, we’ll continue to dive into these trends as we learn more about our clients’ needs, and their consumers’ journeys. While this wasn’t my first SXSW, it certainly was the most exciting — with Digital McKinsey now being one of the forces shaping the conversation around interactive design.