The Hyper-Connected Consumer
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I'm Josh Christensen and you're listening to Most Innovative Companies. Today we have a special bonus episode for you. Last week Fast Company held our annual event at South by Southwest in Austin called the Fast Company Grill. And at that event Fast Company Editor-in-Chief Brendan Vaughn sat down with Verizon's Executive Vice President and CEO of Verizon's Consumer Group.

They discussed how today's CEOs need to be fully plugged in to consumer wants and needs, which change more quickly than ever as technology evolves. Enjoy!

Good afternoon, everyone. Good afternoon. Hello. Thanks for being here at the Fast Company Grill. Excited to see you all out there. I hope you're having a great day and a great South by in general. So my name is Brendan Vaughn. I'm the editor in chief of Fast Company. I am delighted today to be here with Sampath, who is the CEO of Verizon Consumer. Today we are going to be talking about connectedness to a consumer that is extremely connected.

and how you maintain that connectedness, how you stay on top of it, how you keep track with the unbelievably, the sort of unprecedented pace of change and the need to keep up with that change. So this is a special interest of Sam Path in his role as the CEO of Verizon Consumer. So I'm going to start out today, Sam Path, by asking you,

CEOs today are more than ever needing to stay in touch with the wants and desires and needs of consumers. So this is especially true in your case as mobile devices continue to become the center of our entertainment decisions. So digesting enormous quantities of data is, I assume, a part of your answer. But what other secrets do you have, especially ones that translate across industries, for consumers?

Keeping your finger on the pulse of consumer wants and needs. Yeah. Brandon, i think covid has done a number on brands. You know, from 2008, post the great financial crisis, all the Way to covid, brands had a very traditional role. They knew exactly where they fit, the segmentation was clear, The needs were clear. And then covid came and scrambled all the eggs.

And what does that mean? I think customers started trading up and trading down very aggressively. So they would go and save a few bucks on a store-bought cereal or a store-brand toilet paper or a store-brand dishwasher and then spend $14 on a hand-mixed matcha that afternoon. But

But that's a decision they made. You know, they made a decision. They spend more on eating out, spend less. That was one. Second is expectations on customer experience changed. Digital became a lot more important than pre-COVID. So COVID changed that. And many companies, especially the large, more established ones, didn't move that quickly to get there. So there's this new need to get back to understanding customer needs, customer desire, customer behavior. So there are four ways I do it.

The first one is talking. You got to go and talk to customers. Just talk in English, a little bit of Spanish, a little bit of Hindi in my case, but just talk to customers. What do they want? And they tell you pretty straight. So that's one. I travel to 25 to 30 cities a year.

So every time I do that, I try and reach out to customers, talk to them, and they're very open. They tell you what they like, they tell you what they don't like. You just have to have the thick skin to take it and do something with it. So that's one important thing. The second one tends to be data. I mean, look at Verizon, we have 70 billion data points we capture every single day. There's always some insight in it, needle in a haystack, but you've got to keep doing that. The third is social listening. That's become one of our most important approaches because

Social is a very interesting thing where people think they're anonymous. They go and share their deepest, darkest, good and bad online. So you take it, you mine it, it's become a big thing. You know which one's missing? Traditional market research. It doesn't seem to be doing much.

it's like polling you know elections around the corner these polls are never right so imagine a company like verizon people are going to say something the questions are not framed well so increasingly we rely less and less on that and more on some of the other ways to learn as with polling yes absolutely they're almost never right or at least they're almost never completely right and yet every single election cycle we still obsessively follow those polls do you find that in business

CEOs like yourself, your peers as CEOs, other people that used to rely heavily on traditional market research, are they doing the same thing, kind of tuning that out or is that unique to you? No, I think others have started because of the large data sets we have. We're probably a little ahead of the curve in that.

But people do spend so much money. I'm not even, I'm okay with the money. It's more the time and decision making on traditional market research. It doesn't get you to a great answer. And two is customers sometimes don't know what they want. They just know what problem needs to be solved. You know, it's like, can you tell me what packaging will look good for you?

They don't care. They want to know what's in the package. They want to know what it tastes like and what it does for them. So I think there's this big shift away. And the good marketers, we think we are one of them, will get there faster than the others. I want to follow up on one other thing that you said in your previous answer, which was that when you travel to these 30 to 35 cities a year and you ask customers what they want,

And you get a lot of answers. Are those answers generally all the same or do they vary widely across geographies, ages, et cetera? So two things. They vary across ages a fair bit. And two, big one they tend to aid is technology. The older generation, the 55 plus, they like what technology can do, but they don't want to deal with it.

On the younger side, the younger generation, they're more happy dealing with it, making trade-offs, understanding what it does. So in our marketing, we've got to get more person to that. Second is also determine one of the things we at Verizon have historically not done well is go after the Latino segment. You know, it's not a segment we've done well on. So there's a lot of push in us earning the right to go and serve them much better. So it does vary a fair bit by segments, by age and others. And but

The product we have is kind of sort of the same. So how do you market it differently? That's where the magic is. So Verizon recently published the study, the Consumer Connections Report, that looks at how consumers spend their time. It's a fascinating piece of research. So just tell us why you guys commissioned this study. What is its purpose? Look, what we find is we are so central to people's lives.

I mean, think about it. If I go and ask you, what is the one thing you won't give me? And it'll be your phone. Back in the days, it used to be the car keys.

You know, now as we all drive less, it's more the phone. It's so integral to people's lives. So we want to understand what connectivity does to people, how it enriches people's lives, how we can get better. That was the core. Second is we have so much data in an anonymized, privacy-safe way. We track, we monitor things. So it was a good way for us to get deeper understanding of our customers. What results surprised you the most?

There's a little bit, you know, this was NFL season, so we had some fun stats around which team talks more, which team trash talks more, which team uses more data. There's some pretty interesting things. Let's hear some of those. Oh, no, no, no. I'm going to create a security incident here on that. Yeah, no, no. But the second piece for us was how much data people use. So I'll get to that. Second is how they spend their time.

For us, it was fascinating. The overall network grew 130% over a five-year period, which is a crazy amount of data. But more than half your data is video. People spend so much time on video, and then probably another one-fourth of that is a combination of social and gaming that takes. So when your kids tell you, oh, I'm doing homework, that's nonsense because the data does not prove that.

Most of the time they're either gaming or they're playing videos. And we know that. And then, of course, you know, the rise of TikTok and Roblox, which I suspect we'll get into. So the other 25 percent, they're reading Fast Company. Yes, that's exactly. Thank you. We are going to get right into TikTok and YouTube and Facebook. So I was pretty fascinated by some of these trend lines. So you look at the amount of time people spend on these platforms, the three I just mentioned, weekly time spent on TikTok.

has more than tripled in the last five years. That is impressive, but not particularly surprising, I would say, given the popularity and the rapid rise of that app. YouTube and Facebook have stayed relatively flat, a little bit of fluctuation in there, but more or less flat.

Where is all this extra time for TikTok coming from if it's not coming from those other very popular platforms? - Yeah, look, Facebook and YouTube and the others, the time has kind of sort of been the same over the last couple of years. They are more focused on monetization. How do you take that eyeball, that time and monetize better? TikTok's very interesting. You guys should read the report. An average person spends an hour and 45 minutes a day on TikTok. Just think about it. I know, I know, I had the same reaction.

an hour and 45 minutes every single day on TikTok across the country. It's mind numbing. So there's so much scrolling other than their thumb. I don't know what else is getting exercise there when that thing happens for them. But where are they taking time away from? It's coming away from exercise, from social, doing things in real life. You see that every day. I mean, 25% of our customers, almost 30% spend more than six hours a day on their phones. It's a lot of homework, I know.

There's a lot of emails, but there's a lot of other things happening as well. So people do spend a lot more time, and it's coming away from social activities largely, Brandon. You said exercise. Do you know that? That's in the data, that people are exercising less because I'm not surprised to hear it. I'm curious to know that it's in the data. But some of it is.

the math, right? The 24 hours a day, you sleep certain hours, you do other things certain hours, and then you spend six hours on the phone, then you watch TV for eight hours on average. So when you just do the math, something's coming down, you know? What about just being on multi screens at the same time? Is that in the data? Like, do you see how much people are doing a few of these things at the same time?

We do see some form of multitasking that happens, but it's kind of not that much. I mean, just think if you're going on TikTok, you're not doing TikTok and Facebook. You know, the human mind can only process that much. So you do see there's some passive activities like video watching, then people will use a secondary screen. So they'll watch a Netflix and then they'll text or they'll watch Netflix and they'll use TikTok or Twitter or X to follow that piece. But

Some activities are very primary activities. TikTok kind of is in that bucket. There was also some really interesting data in the study about geography, and a lot of that was pandemic related. People moved around a lot then. What can you tell us about the big trends there? It's fascinating just to kind of state the obvious, I suppose, but cell phone data is maybe our most reliable source of that information.

because the customer doesn't change their plan. They just move and you see that. So tell us what you observe there. - It's really accurate data in terms of where people move to things. When you move, the first thing you do is change your billing address. So you knew you moved from A to B. The second thing is you just use your phone differently. Texas is hot. You don't need me to tell you that, you're all here, but Texas is hot in more ways than one. It is doing so well in terms of population. But the big shifts, you know, people have moved from New York, New Jersey, Connecticut,

to Florida, there's a lot of movement to Florida. People from the West Coast, California have moved to Texas, Arizona, and it's pretty consistent. I mean, Florida saw 1.8 million more people post-COVID than pre-COVID, and the trend continues. Now, it's a problem for us because when you move, you take your bag,

you put your stuff in a u-haul and you're there in two days from now but i can't move network capacity that fast so i have to build and it takes me two to three years to build network capacity so we've been working so hard to catch up with the trends in terms of population movement what are the next trends do you see i mean one other state if i remember correctly correct me if i'm wrong here but yeah it was california to texas and arizona it was new york to new

New Jersey, that actually seemed weird to me. It's like, isn't that always the case, New York to New Jersey? But New York to New Jersey, Florida, and North Carolina, right? That was the other state. What little increases, little telling bumps do you see that might lead to bigger trends down the line? I think the Nashville, Tennessee area is doing really well. I don't know if it has anything to do with Taylor Swift. It probably doesn't. But it's doing really well in terms of movements, people coming in.

Also, a lot of educated people are moving into Tennessee, Nashville in general. North Carolina, the Research Triangle is seeing a resurgence one more time. It kind of stopped a couple of years ago. It's kind of picking up one again and doing that piece. Look, as a New Jersey resident, I don't know why you're so surprised people from New York are moving in there. I'm not surprised that they're doing it. I'm just surprised that there's anything new about it. It's a garden state. You're going to love it. Yeah.

I'm a huge Jersey fan. I have families from Jersey. There's no shade to New Jersey at all. I just didn't. I was surprised that it was new. That's all. So do you see any signs? You know, anecdotally, this is totally anecdotal, just my observation.

lots of people move during the pandemic and then we're like, I'm actually not loving this. I'm going back. You know, I was in a state of mind as we all were. Radical change is good. I want to just upend everything and completely change my life and then realize for whatever reason that maybe that was not the best thing for them and their family. Do you see signs of that? Look, you know, one of the things a lot of New Yorkers, a lot of my friends and family who moved to Florida, you know, I remind them to move to Florida. You have to live in Florida.

And it's a thing, you know, there's no Met and then you can't go and grab a drink at three in the morning. You can't get pizza at three in the morning. So there's some things that, you know, they got to get used to. We haven't seen people make the shift back. What has happened is back to return to office. A lot of people ended up moving because the office was a little fluid in terms of show up to work, not show up to work. So I ended up moving. A lot of offices are kind of coming back to the center, which is three days a week.

So you're seeing a little bit of that shift, but almost all driven by corporate shifts back to the office, which is a pretty interesting trend where in the Northeast, folks have not come back to the office. If you strip out the banking community largely where they have come back because their bosses have told them to come back,

Others haven't come back. Look, in Verizon, I'm sure we'll have an answer saying it's hybrid, but largely people don't come back to work in the Northeast. Whereas we've seen the South, if you see all the way down to Florida, in the Midwest, there's a pretty big resurgence. 75% of people have come back to work. That number is less in the Northeast. Yeah, the Times actually just published a story a couple days ago that had a pretty surprising story.

overall conclusion which was that 80 percent of working Americans are back at their workplace whatever that may be that could be a store where you need to be there to do the job or it can be an office if you're a knowledge worker where you don't necessarily need to be able to do the job 10 hybrid 10 fully remote but when you started to dice it in different ways

by education level, for example, changed significantly. I'm sure that when you start to dice it by geography, like you're just saying, would have also changed significantly. Nevertheless, I was surprised. Maybe I'm in a bubble of, you know, sort of media knowledge type work in New York City where lots of people are either remote or hybrid. But I was pretty shocked at that 80% number. It doesn't feel like that's the case, but it is actually the case. I mean, I think you just have to go to your chopped...

You know, the chopped salad line in Bryant Park, that's a great indicator of how many people have come back to work. Lines are not as hot as it used to be. But I think it's the de-averaging effect. Because if you strip out people who have no choice, like in our stores, you know, we run one of the largest retailers in the country. You can't go to work in a store if you don't go to work in a store. Same with the technicians who go home and install stuff. So when you strip...

that out, when you strip the banking sector out, when you strip Southern and Midwest out, it's pretty stark in the Northeast in terms of people not coming back. So there's some de-averaging. I think it has long-term implications for commercial real estate and what happens, but the networks are ready. We've also invested so much in network connectivity in people's homes over the last five years that it actually works well.

Perfect segue to my next question, which actually has to do with home internet. We talked mostly about mobile, home internet also growing rapidly. Some of that must be due to cord cutting. I recently proudly finally got around to cutting the cord, streaming only. Now, the average of but one data point from the trend report, the consumer report that kind of blew my mind, although maybe it shouldn't, but I was nevertheless pretty surprised to read this. The average of devices per household is 10. Yeah.

Yeah. 10 connected devices per household. That is a lot of devices in one house. Obviously, some households are much bigger than others. That number isn't surprising. When you average that out, that's a lot. What can you tell us about the growth there? Give us some context for what that was, say, three years ago, five years ago, versus what it is now. Yeah. Look, I mean, 10 is a big number, but let's break it down. An average household has two and a half people. And each one, on average, tends to have two devices. You have a phone, you have a watch, you have a tablet, and then you have one connected TV in the house.

That adds up to 10. But I think that number is going to go to 50 and 60 over the next couple of years. So think about it. Every plug, every switch, every thermostat in your house, your leak detection. So I think you're going to see a quantum jump in the number of connected devices. So what happens is two things important for the internet, folks like us. One is you want high bandwidth coming into the house.

So when you're streaming, you're playing Fortnite, your kid doesn't complain that the ping is too high. So that's kind of the first step thing that we have going on. The second is Wi-Fi coverage in the home. There's nothing, nothing more annoying than having poor Wi-Fi coverage in the home. And we just a couple of years ago knew we always had good bandwidth coming into the house because of fiber, because of the 5G network. But it's the

in-home coverage that became the big thing. So we decided that we want to be the best in-home coverage in the country. So, you know, we just launched the Wi-Fi 7 thing. Our antenna, our boxes are a little bigger. We build for performance, not for good looks always. So our boxes are a little bigger sometimes so we can put more antennas, we can have more facing out there. But

in-home Wi-Fi tends to be the biggest issue right now that most of our folks complain about. I'm going to change gears here a little bit, go back to platforms conversation, picking up on what we talked about with Facebook and TikTok and YouTube. Let's talk about Roblox for a second. There was some pretty interesting data around Roblox. Roblox, I feel like, is still an enormous platform, but it is not a platform

It's a platform that's specific to a particular demographic, age group. If you're a parent or a kid, you might be a lot more familiar with Roblox than if you are neither one of those things. 46 million active users a week. That's quite a few. It's less than some of the other platforms we've talked about. Tell me about what you learned about Roblox in the report and sort of what jumped out to you.

Yeah, look, you know, I have two young kids and I think if I ever go broke, it'll be because of Robux. I don't know where it goes. There seems to be this endless pot of things Robux goes into and they do it for 99 at a time. So there's a certain thing about it. It's called drip pricing. I think it works. But look, it's an incredibly powerful platform, 45 odd million users. But

But give an interesting stat. In 2023, the total engagement on Roblox was 60 billion hours. Okay, 60 billion hours. You know what other platform was 60 billion hours? The PlayStation. So you have something that just came up a few years ago that's only played by kids. You and I don't have a Roblox account. At least publicly, I can't say I have a Roblox account. But if you think about it, 60 billion hours, which is what PlayStation has...

Of course, they monetize much less. PlayStation's a $20 billion monetization. This is a $2.5, $3 billion monetization. But an active user spends two hours a day on Roblox. I think it's an incredible platform. It's also the early start of the metaverse.

and what it can do. They're finally making money, they're making a thing out of it. But I think they're going to have to monetize a little better. I mean, you can't spend 60 billion hours and only monetize two and a half, three billion dollars. So there's a monetization piece there. The second is age groups. I suspect most of you in the room don't have a Roblox account. You probably do, and then you have to give it up. So how do they manage the age transition properly for them? But

Look, for us as building networks, we are excited. We think the next growth of networks, for the last 10 years, it's been video. Video, 4K, ultra high def, you know, all the Netflix and Macs that you guys watch plays. I think the next 10 years is going to be driven a lot by the metaverse.

And I want to talk a little bit about that. And the second is AI. Because, you know, you have all these chips producing all the data. You've got to move that stuff around. If you don't move it, it ain't worth much. So we are excited. It could be the growth of the next tsunami of data that's happening. Keep going on the metaverse. I would love to hear a little bit more about, and actually before we get into that, my version of your Roblox story.

the monetization that it may only be, would you say $3 billion on 60 billion hours? Yeah, that's nowhere near PlayStation. My version of that is, of course, Fortnite, where the amount of times skins are purchased on my card and I wake up and see more skins being bought. I'm like, what the hell? It's a skin. I know what a skin is. I don't really understand the value.

But Roblox maybe needs to find its version of that, which costs a lot more than some of the things that are available on there. So back to the metaverse. I would love to hear just a little bit more, whether it's from the report or just your own observations as somebody who pays a lot of attention to

these kinds of digital trends and where they're going. The metaverse sort of took a backseat to AI in 2023, at the end of 2022. But it has been bubbling beneath the surface. Development continues. Are we poised for a big comeback, a big cultural moment or not?

You know, metaverse started off strong, but there wasn't much to do in the metaverse. You know, it's like the dog who chased the car. I've never seen a dog that actually drives the car. You know, so metaverse, I think, a little bit like that. A lot of people got onto it and then they stalled in terms. But I think you need vertical use cases to make it work.

You know, Roblox was a perfect one, which is gaming for young kids between A and B, which is a thing. Quest is another interesting one, certain age group to do things. The Apple Vision Pro is another piece. So I think technology is really picking up. I think the combination of the metaverse and AI is what's going to unlock it. If you look at the smartphone, the form factor hasn't changed in 15 odd years. It's gotten better. The chips are better. The camera is better. The form factor kind of sort of stays the same.

The problem you have with a glass or a lens is the user interface is very difficult. You can't type, but with very good quality voice recognition and AI, that problem goes away. So instead of going, logging into your bank account and finding what your balance is, you can say,

Hey, X, what's my bank account in this? And it goes, it logs in for you, tells you. So I think the user interface problem will go away. I think that's the most powerful thing about AI that I see right now. It's a great way to access the world of information in a much easier format. Maybe that's what unlocks the metaverse in the next era that we have.

So I want to ask you a question about always-on connectivity, which is, a lot of numbers have been thrown around in this conversation. I mean, I think the summary of that is that people are spending more time than ever connected to their devices. That's not going anywhere. You know, even like we talked about, it's taking people away from exercise, for example. Not a great thing. Good for your business, but maybe not necessarily great for society. So there is such a thing as too much connectivity.

You know, there are companies out there that have tried to do things about this. You get the alerts on your, you know, your iPhone that says you're using this too much, essentially. I'd love to just hear from you how you think about this, how you see it. I don't want to assume you see it as a problem, how you see it as an issue and what Verizon is doing to address it. Our job as network providers is to provide a connection when you want it.

I get paid literally, it's in my objectives for the year. When you want the network, the network's ready and we want to provide the best network. Now people all have to make choices in terms of how they want to spend their time. So in my house, I have two kids. We have very strict rules.

a dinner table or anything around food, they can't use their device. It's a non-negotiable. Before they go to their bed, they have to drop off their device in the kitchen. There's a little thing that charges their phone. They can come back the next day and they can pick it up. And then, you know, internet does get cut off at some point when they go on there. So we are quite strict about it. I do think people are all going to have to find their balance.

On the other hand, you know, if you go back and look at history, I spent a lot of time in history. 100 years ago, people were like, oh, people are reading too much. Kids are reading too much. It's not good.

And then our parents kept telling us about television. You know, you're watching too much television, you're going to go blind, you're not going to be able to make it to college. It turned out fine for most of us here. So I think there's a balance here that we have. But I do think having some boundaries around social, having boundaries on how much time is important. In fact, recently in March, we had the Global Day of Unplugging, where we encourage people to unplug.

And what's interesting is 30, almost a third of people don't ever unplug. They are on all the time. So I highly recommend people to unplug, set your own boundaries, do what's right for you. It's not in our interest for people to use the Internet all the time. We want people to have a balance, have relationships in real time, have a meal, go for a walk, take your dog for a walk, go grocery shopping. It's very therapeutic. So we want people to do fun things as well.

Here's me contradicting my own question that I just asked you. And AI could be part of this, you know, with the research that I'm sure your teams are doing to figure out how AI can enable a better and more compelling experience

while using what you refer to as like the same form factor as has been around for 15 years, the smartphone. What can you tell us about what you've got in the product pipeline that will enhance that experience for all of us? Look, AI is a very buzzy word right now. I mean, you can't walk a block without someone telling you something great about AI. So I will not be the 2000th person preaching about AI this week, but

We've been in this AI thing for the last almost a decade right now. For me, it is about taking the cognitive workload of my frontline teams. I have hundreds of thousands of people who sell, who go to people's home and do things and set up their router. When you call into customer care, they take care of that. There's a

fair amount of cognitive workload for them. They have to remember the plans, they have to remember how to change things, they have to remember how to qualify addresses. Imagine if all that went away and they could just chat with customers, empathize with customers, sympathize with customers, maybe even sell a little more. It's a great use of time. So that's where we are spending significant amount of time on that.

Second, in a more societal piece, over the last 20 years in America, outsourcing, offshoring has literally been the only deflationary thing that has worked.

if you take the last couple of years out because of COVID, prices have kind of remained flat to low over almost two decades. And most of that is offshoring some productivity from automation, but mostly offshoring and stuff. That has kind of come to an end right now. So the next 20, 30 years of productivity in America, a lot of that is going to be driven by both better networks, better compute, but

AI making that happen. So I think it's pretty important for our society to get it right. It's going to require some massive reskilling. Think about it, the hottest job right now is a prompt engineer. In fact, if any prompt engineers here, let me know. I would love for you to join my team. But it's going to take some reskilling, both for my frontline teams as well as my technology teams. But it's got 20 years of growth in front of us. There will be a little bit of a hype cycle. It's difficult. You know, large companies like ours, I'll give you a sense, we ingest...

70 billion data points every single day, but it is spread over 29,000 different data sources.

So just the amount of data engineering and putting that together, getting it right and doing that. So it's a long journey. It's a marathon. I want to win the marathon. For me, I want to be the best AI applied company in the world. I don't want to sell AI. I want to be the best AI applied company. I want our frontline teams to be the happiest. So that's the lens I'm taking into AI. I'm pretty bullish. It's a tough and long slog from here. So come to the Fast Company Grill.

have a beer, have a taco, get a job, maybe. I mean, if you're a prompt engineer, that's a pretty good deal. Sampath, thank you. We are out of time. That was great. I feel smarter. I hope all you do too. Thanks for coming. Thanks so much.