Market Trends October 2017
Prefab and Offsite Construction
One of the industries that enjoyed growth during the last recession was the prefabricated construction business. Many skilled laborers left the construction industry during the recession and did not return, and developers began looking for ways to be more efficient. This combination made prefabricated buildings more appealing. Offsite construction allows various building elements to be built in a factory and transported to a construction site. Prefabrication makes on-site changes more difficult, thus is better suited to some types of industries. There has been increasing interest in prefab from healthcare, commercial retail and institutional buildings such as prisons and police stations. Marriott International recently announced plans to modularly construct 13% of their North American developments.
Housing Affordability Moves Lower
Housing Affordability moved lower in the second quarter of 2017, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. The booming job market is boosting housing demand and inventory is very tight, which is helping to inflate prices. Just over 59% of new and existing homes sold between April 1 and June 30 were affordable to families earning the U.S. median income of $68,000, down from 60.3% of homes sold in the first quarter. The top five most affordable markets are in Ohio, Indiana, Pennsylvania and upstate New York. All five least affordable housing markets are in the California. Housing prices are now higher than their previous peak at the end of the housing boom in 2008, and have risen an average of just over 6% since the market bottom in 2012. Meanwhile, per capita income has increased just 2.4% on average per year. Housing starts bottomed out at 550,000 in 2009, a little more than one-third of the historical average of about 1.5 million starts per year. Just under 1.3 million starts are forecast for this year. Residential construction currently has more than 150,000 open jobs, which is helping suppress starts, along with shortages of buildable lots and rising prices for building materials, particularly lumber.
Robots and Drones Are The Next Industrial Revolution
Amazon already has more than 100,000 robots shuttling products to human pickers in more than 25 of their highly robotized fulfillment centers. Next will come picking bots and finally delivery drones, according to a recent analysis in American City Business Journals. Analysts expect the FAA to drop one of the biggest obstacle to drone development sometime in the next two years and allow some commercial drones to fly beyond the sight of their human pilots. Amazon Prime Air already has coders, engineers and program managers at its headquarters in Seattle and is reportedly looking for new hires, including a flight safety manager who will work on regulatory and compliance matters. Amazon Robotics has hired more than 900 people in two years. Forrester estimates that warehouse robotics could create 15 million jobs in the U.S. over the next decade, helping to offset some of the
25 million jobs expected to be lost to automation over that same time period. According to a recent patent filed by Amazon, the company is investing in video cameras, microphones and sensors for their drone fleet, in order to capture data on customer’s homes and make recommendations based on that data. A news story that went into more detail said that Amazon’s delivery drones will be able to tell someone it’s time to fix the roof or trim the trees.
Artificial Intelligence Patents
More than 1,200 patents have been filed globally since 2012 that focus on artificial intelligence in the retail and ecommerce segments, according to global market intelligence and content management firm Netscribes. Firms such as Robert Bosch, Amazon, eBay, IBM, Google, Facebook and Microsoft are big players in this arena. Some of the key application areas Amazon is focused on include customer surveillance and recommendation systems for offline retailers.
Brand Breakthroughs from Understanding Barriers
A Forbes survey of 15,000 U.S. customers showed that Amazon had jumped into second place when customers were asked to name three brands they could not live without. Apple took the number one spot. Analysts say it is Amazon’s single-minded focus on understanding and meeting customer needs that moved them into second place. MediaPost termed it “empathy-driven brands” that uncover both what customers need and want and what barriers and friction points keep them from buying. An example cited was upstart mattress company Casper, which saw sales grow from $1 million when they opened their virtual doors in April 2014 to $200 million by the end of 2016. Casper’s success came from a deep understanding of all the friction points that keep people from buying a new mattress: too many confusing choices, how do I get it into my room, what do I do if I don’t like it? Casper introduced a mattress in a mini-fridge sized box, and gives the customer 100 days to return it. And they only offer one model, so no decisions are necessary. Shoe brand Toms started carving out a unique and powerful niche in the shoe business by promising to donate a pair of shoes for every pair sold. Toms’ charitable goal requires collaborating with over 100 NGOs and other nonprofit partners in more than 70 countries, but has created a powerfully loyal customer base and a unique position in a crowded market.
Hijacking Voice Assistants
Voice assistants connected to smartphones and other devices have been hijacked by a university team using sounds above the range of human hearing. Once hackers gain access, they have been able to make phone calls, post on social media and disconnect wireless services, among other things. The attack works by converting the usual wake-up commands into high-pitch analogues that the voice assistant recognizes as legitimate commands, even though they are imperceptible to human ears. Currently the attacker needs to be close by the target device to hack it. Now that voice assistants are connected to a increasing number of services, including home security, automotive commands and internet banking, security breaches can be serious. To secure voice assistants, the team recommended that patches be developed that block sounds outside the range of the human voice or possibly learning algorithms that would blunt attacks. The hack was created by Guoming Zhang, Chen Yan and colleagues at Zhejiang University in China using ultrasound.
Target has adopted several new technologies aimed at making it easier for customers to do business with them. They recently rolled out locator technology on their smartphone app built around in-store Bluetooth links that connect with smartphone receivers and show a user’s location on a store map as they move through the aisles. Shoppers make a digital list on the app and then click on the item they are looking for. The app then indicates on a store map the precise aisle where you can find your item. The technology will be live in about half of Target’s stores in time for holiday shopping. The app also alerts shoppers to nearby sales. Target also streamlined their savings program, Cartwheel, and incorporated it into their app. Now they are getting ready to debut smartphone payments.
Amazon is working on a pair of smart glasses powered by Alexa. The glasses reportedly feature a bone conduction audio system that would allow the wearer to hear Alexa without wires or earbuds. This would allow Alexa to be summoned from anywhere instead of just the Echo smart speakers or other Alexa-enabled devices. The glasses reportedly look like a real pair of glasses and would connect to the user’s smartphone for outside connectivity.
© Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.