 Good afternoon. Thank you all for returning. We have the post-lunch need for sugar. I can't deliver that, but we have a session that's going to be sweet for you to enjoy, and hopefully will juice you up. Our session is on connecting with the consumer and understanding that experience. And we've already had two great sessions this morning, one on the automation of everything and the other on data, data, data. And there's a lot of connections to what I think we'll end up talking about today. Our session is going to be kicked off by Dr. Joe Coughlin. He is the creator and the leader, the executive director of the MIT Aged Lab. And now Joe is going to talk. He'll only give you a slice of some of the research that he's done in understanding the consumer and the trends. Now, understanding his work, he's understanding the dynamics for the aging community and living in our world. So he's going to share some of that that will serve as a foundation for our session. Then I'll invite up Julie Vargas and Wes Duquette, and I'll introduce them afterwards. But for now, I'm going to turn things over to my colleague, Dr. Joe Coughlin. Please give him a nice hand. Thank you, Jim. Great to be here. Good afternoon. I saw you wolfing down lunch. I'm the guy here. It's going to keep your blood sugar up. How's that? So I want to talk to you about something that's kind of different in the field. Think about this. CTL is really good at what we do because we go from dirt to dirt. We know everything from how you manufacture, distribution, all the great algorithms and automation in between. We also deal with that very, shall we say, crazy variable that's really hard to even call a variable and even hard to model called the consumer. And I heard from this morning, and I'm going to reinforce it as well, is that the consumer is driving innovation in a way that we've never seen before. So I'm going to try the next 20 or so minutes to give you a glimpse of who that consumer is, what she wants. Did you notice the pronoun? What she wants and maybe how it's playing out in a variety of areas. So let's get this going. You should know class participation is 10% of your grades today. I will call on you. By the way, if you like what I have to say, give my team credit. They're the ones doing the research. They're the ones doing the work. I get the lucky one to be the microphone. If you don't like what I say, blame me. So look, we all have done at some point or another a strategy class, a SWOT analysis, or something like that. And generally speaking, some of the variables we look at, of course, are economics, technological change, a big theme today, and demographics. I know when you hear demographics, you think that's a lot like going to the dentist, but not nearly as fun. But let's be honest. Technology, if we're honest, I'm going to say this at the address that we're sitting in right now, is essentially what? One part science and two parts hope. Economics, one part bad math and two parts witchcraft. But demography is destiny. Your consumers are already here. Your future consumers and workforce are either here or in the making. And their behaviors don't change nearly as quickly as you want. But in fact, unlike previous decades, they are driving what they want. And by the way, you're not going to excite them. Most companies think they want to respond to the customer. I'm here to tell you that today's consumer is disruptive in the way that we used to talk about technology. She is now waiting to be excited and delighted, but is demanding that. The new gap, if you will, between industry and consumers is expectations. She's got greater expectations than industry is delivering. So I'm going to, by the way, I mentioned class participation. How many of you remember something called Cliff Notes? Raise your hands. Geez, Jim, this is an old crew, isn't it? Yeah, so Cliff Notes. Remember those usual ones like, I don't want to really read Macbeth, but I'll read the Cliff Notes to find out who Duncan is, whatever it is. So here's the Cliff Notes to global demography. The future is gray. It is delayed. It is small. And guys, if you want to go out and hit the lunch bucket again, it is distinctly female. So let's just get this started. Again, how many of you remember a guy named Willard Scott? Remember the today show, The Weatherman? It was out there? Every day, he would open up the show going, so-and-so turned 100. It was barred to you by smuckers, whatever. And I never knew who the family was that would provide those photos, because this poor woman's picture would usually show up. Yes, I just turned 100 years old. Well, guess what? Do you know that they no longer do that, not just because Willard Scott's moved on, but also Queen Elizabeth used to write birthday cards to everyone in the kingdom that turned 100. Even before she passed away, she stopped doing it. You know why? Not a big deal. In fact, these are birthday cards from a local CVS. Imagine not too many years ago, finding one happy birthday for 100 would be a big deal. Now having multiple is a big deal. I want you to start thinking about the life stages and opportunities and things that are going to be done, not over an aging lifetime, but a 100-year lifetime. What are the new life stages that are gonna have new demands, new work outlooks, new institutions and services that aren't here today, but are going to demand services tomorrow? Look at these kids. Aren't they cute? Okay, yeah. See, this side's awake. I don't know what you're doing over here. Yes, they're cute. You know why they're cute? They're not teenagers. That's why. But I want you to think about this. Studies have been showing that kids born in the 1990s and 2000s, nearly one half of them in the so-called industrialized world will live 100 years. Start thinking about what that might look like in terms of a 100-year life. Ask yourself, how many jobs will you have? How many careers will you have given the change of knowledge, the change of technology overall? How many places will you live? How many times will you move? Do you genuinely believe getting an education from someone, some geek that looks like me, is going to last you from 21 years of graduation or midlife and last you for 30, 40, 50, and Wall Street Journal now says 60 years of work? Well, my wife of over 35 years want to hear me tell the same jokes over and over again. These are all big questions for a 100-year life. Now, this one is going to burn into your brain for the rest of the conference. In Japan, I don't know if there's anybody here from like Kimberly Clark or Proctor and Gamble Light, but in Japan, there are more adult diapers being sold than there are child diapers. And by the way, I want you to keep this as a theme. Countries that are our number one manufacturers, consumers, wealth and the like, they're not just getting older, they're going away. The Japanese were celebrating the fact that their population is only going to go down maybe by 15 to 20 million by mid-century. And mid-century is coming a lot faster than we think. How about China? None of us ever imagined most of us in our lifetime that China would issue a workforce shortage. Yes, I know the one-child, one-family policy has been replaced, but so far, the idea of having more children, the answer is no. And also, look at these median ages that are going up. Whole new definition of, shall we say, of mid-life crisis is now the, shall we say, new prime age worker. To put an idea in your head, though, the entire population in the United States by 2050 is estimated to be roughly 400 million. There will be over 400 million people in China over the age of 60. This changes demand, it changes who's going to do the work, who's going to provide the care, what are the services we will need? And the bank and the manufacturing engine of Europe. Yes, even Germany is aging. By the way, I love working with German companies because when they see a problem, they see a chance for innovation. They're coming up with an anti-aging beer, so you're going to be older, but you'll be happy about it. But the fact of the matter is even they are looking to lose 15 to maybe 18 million people by mid-century. And entire parts of Germany, particularly in Barbaria, are just plain emptying out. So you could say, well, Joe, that's Europe, that's North America, yeah, it's true. But the entire world is aging. Even Africa, which I won't cover today, is getting older, but they're going to be young for a long time. But if we look to the South, South America, we are seeing it doubling at a faster rate. In fact, most countries that are not in the industrialized world are concerned that they will get old before they get rich. Here's the number I want you to think about. 2047, yes, I know it's not in your planning horizon. 2047 is the year that will be more people on the planet over 60 than there will be people under age 18. Never happened before, unprecedented. No supply chains designed for it, no policies designed for it, families are not designed for it. So you say, well, 2047 is a way off. Well, let's look at the US market. I had to change the slide two weeks ago. You know why? It used to be 2035. The numbers are coming in, it is now 2034 when that will happen in the United States. It happened in Canada in 2013. It already happened in Europe in the 1990s. You see, demography is destiny, but it's one of those not so exciting things that people pay attention to. We all suffer from change blindness. It's slow, it's sure, but ever so powerful. But as I write in my book, The Longevity Economy, it's not just about more older people and the aging society, folks, this is where the money is. The fact of the matter is the 60 plus worldwide make up the third largest economy in the world. And by the way, in the United States, the 50 plus make up nearly 70% of the discretionary spend and yet only get 2 to 3% of the advertising dollars. So one of the things you might wanna say is, well, older people, they don't buy anything or they're loyal to brand and whatnot, have we ever thought about designing something that excites and delights them to be worth, shall we say, their time, their trouble, their hassle, and eventually their dollars? So this future is gray, that's the cliff notes to that. But this one is gonna be a little strange for you. It is also delayed. I would like to tell you that you're gonna be living longer and perhaps that means more days in whatever it is you want to do in that thing we call retirement. But in fact, what we seem to be looking at is that people are taking longer to do what they used to do in short order. That is, and this is changing where we live, what we buy, and the like. So I'd like to say that 27 has become the new 17. Now, what do you mean by that? Well, think about this. Now getting the driver's license was, well, I'll give you an example. I grew up in New Jersey. If I had not gotten my driver's license at exactly 16 and a half, I would have had my head shoved into a locker. Today, the average male in the United States gets the driver's license at well over 19. By the way, there's gonna be a theme here. When do women typically get their license if they get it? Closer to 17 or 18. There's just the theme going on here. But one of the things we're seeing is that people are taking longer to do, so we say natural activities. I love this particular one. Any millennial grown man in his 30s, I keep my important documents at my mother's house. They're not leaving, they're taking longer. In fact, there's an entire literature out there called Emerging Adulthood. I'll give an example. Young adulthood in the 50s and 60s used to be you were an adult at what age? 18? And at 18, your parents, they loved you very much, but at 18 it was, get a job, join the military, go to college, get married, but what? Get out! But then the 60s, 70s came and we said, ah, you know, heck, you're in your 20s. If your parents had money, they gave you a URL pass and a backpack and said, go discover yourself. Okay, that's 20s. Does anyone wanna know what the Emerging Adulthood literature says about when adulthood begins? Ty, you just shout out, 25, 30, you wish it was 30. 36 years old is one of the age points they're giving. I was bald, had a daughter and a marriage, all of that, I was just a baby, I didn't know it. But the fact is these people, that kid that's in the basement, that's your son. You should know that your daughter is now more likely to move out of the home at a faster rate than boys are, but look at this, and by the way, I intentionally used 2019 numbers because COVID messes things up. 18 and 29, look at this, 52% of them are still with you. And there's something else. We're also not finding significant others. This data is not about a partner or marriage or even a friend with benefits, it's about being, shall we say, alone. And so we're seeing a very, shall we say, siloed, like lifestyle emergent. We're putting things off. So if you don't have a significant other, I suggest, look, my background's not in biology, but that probably is going to hurt, shall we say, fertility. Fertility is well as being postponed. In fact, the only group of women showing an increase in having children are women over 35 or over the age of 40. So think of all those business models about, oh, they're gonna buy a house now, now they're gonna get a pet, now they're gonna have a kid, they're gonna buy this, buy that, tell your marketing department to take their head out of the data and go outside and look at actually what's happening. Because this is what's driving supply chain. The people that are developing new households overwhelmingly are older. People are taking longer to not just buy a house and I know you can talk about finances and the like, but they're not putting together households or families to drive that consumption. That is the blithe blood of supply chain overall. So the future is gray, it is delayed, it is also small. What do I mean by small? Well, guess what? Remember those kids I showed you that we thought were cute? Apparently they're not cute enough. We've stopped having children. Just plain no is the answer. I'll get a little geeky with you for a moment. You need 2.1 children per female just to keep a population even. No industrialized country is at replacement level. In fact, you probably should not listen to anything I have to say because when COVID happened and we went to quarantine, I thought to myself, 24-7 gonna be at home? Nothing to do. There's gonna be a baby boom. Not only did the baby boom not happen, but the fertility rate even went lower than it was before. So apparently living 24-7 with your significant other does not show you say engender love. But the fact of the matter is this has been happening long before COVID. We are looking at birth rates that have been plummeting over the last seven decades. And in fact, this is the household I want you to pay attention to. Look at this in Europe. These amazing cities, more than 50% of those cities are households of one. How does that change everything from packaging to retail, the demand to what we're looking for? And you don't have to memorize this chart, but this will just show you that around the world the slope lines of going towards solo living is a worldwide phenomena, not just something in the US or Europe. So you and your cat will be living alone. I love this chart because this is empirical evidence, by the way, that no one wants to live with anyone in Washington DC. 48% of the metropolitan area are living alone. And by the way, there's some, they're not on here, but for instance, even St. Louis is upwards of 49% of the households are living alone, at least the metro area. And I just thought I'd throw this in there. Odessa, Texas is the only town of the United States that reports actually having a family of two or 2.1 was what they had growing across the United States. So finally, guys, I warned you, the future indeed is female. So I know that earlier we were talking about how the consumer is driving activity and demand and whatnot. And we know that from a supply chain standpoint, whether it's transportation or delivery or anything else, convenience, the whole online demand is a big deal. Ladies and gentlemen, it's being demanded largely by women. Now let me show you why. First off, women are more educated than all fields by engineering and likely to eclipse that very soon, not just the United States, but in Europe. Now, as we all know, the education is not just for it, what it gives you in terms of certificate, but it also gives you, shall we say, the power to do research, the power to be more discerning, if you will. But more importantly, she controls the money. She is the chief consumer officer of the home, not just the United States, but much of Europe. And by the way, even in countries developing economies where you have people that will know it's a very male, don't worry, anti-culture, the male makes the money. We all know what often happens when you shut that door. It's like, remember the movie, My Fat Greek Wedding? The man is the head of the house, but we turn the neck. And the whole online revolution. Ask yourself, who is online? She's not only doing the research, but she's doing the shopping as well. So start thinking about what is it to her? What does convenience mean to her? What does on time mean to her? And in fact, if you wanna look at specific areas, look at this, 89% of consumer electronics, go into Best Buy, a man and a woman together, go into Best Buy and watch who they go to to talk to. Because over the years, they realize that I'm boring, but she wants to buy a refrigerator. I'm boring, but she's the one interested in computer more often than not. How many of you remember Lowe's and Home Depot when they first started open? Do you remember they had the, went nationwide. They'd have the forklift racing down the street and they had the guy greeting at the door, hey, may I help you with the tool belt, the whole nonsense? Well, was that their lawyers that said, get rid of the forklifts, make a little safer and show the guy out in front? You know why? The three-quarter ton pickup trucks that were out front were not the people buying the stuff in the store. It was a middle-aged woman redoing her kitchen or bathroom and the like and the guy with a three-quarter ton pickup, he was there to pick up what she had bought. 65% of automobiles. I was on Daimler's advisory board for a number of years. That's 65% of automobile purchases or direct influence, except when it's a leisure car or shall we say a more high-priced car and guess what? Then it goes up to 86%. Home improvement overall, but also think about this in healthcare, 90 cents on the dollar of healthcare. So whether you're selling toothpaste, Blue Cross Blue Shield, choosing a doctor, whatever it might be, she's the one that is making that decision. But here's the thing I want you to think about. My career started in logistics, particularly military logistics. And that's when Justin Time became a thing. Now it's an old news. But she has to do Justin Time every time. So when you start thinking about convenience, keep in mind she's not just responsible for her household. Millennials and Gen Z say that she is the, tends to be the most trusted person in their life for advice. And she is likely to have more parents to care for than she ever planned on having children. So as a result, and I get a lot of people rolling their eyes, particularly my wife when I say this, I have a lot of interest in middle-aged women. Because if I can understand her, I get three generations of households for the price of one. So let's just very quickly kind of give you, shall we say a forecast or future cast of what being gray, delayed, small and female might be. Let's rethink work. Let's talk about how demographics is changing work. You know, there was a time, and I'm looking at a few people that actually knew who Willard Scott and Cliff Notes were, there was a time when you were in the workforce, there were younger workers, and there were older workers. It was nice and simple. Now, basically you could argue you have six generations of workers under one roof. And remember, a generation's not about age. That's, shall we say, New York Times level thinking. It's about experience. What are these people experienced that framed their idea of how we think about authority, how we think about technology, how we think about the idea of careers, whether it's a career ladder or is it a Pogo stick? Very different way to have to manage all of this. We're gonna be seeing older workers in places we never thought before. Even in Europe where they have some pretty rigid standards around retirement, we are seeing a very big move of older workers, and in this case, 75 year old woman working in the docks. Speaking of women, we are so sure of workers around the world. You're about to see women go into roles that you never saw before. New Holland tractor, John Deere and Peter Bill and the like are rethinking cab design to ensure that they can also afford not just the average male driver, but to have a woman driver who may be of smaller frame be able to work in those jobs. And yes, automation, as you heard earlier today, automation everywhere, but co-botics to keep people working on the line. This is why China is the biggest buyer of robotics. It's not just because they're a manufacturing engine, they're running out of people to do the work. They need the robots. Germany doing the same thing in auto. And yes, certainly in logistics, far more automation, not just because it's efficient, but you don't have the bodies to put on the floor. How about that retail experience? Let's get on the trope that retail is dead, it's all online, it's done, it's over, the mall is dead. Well, I'm gonna use a really highly technical term about retail, crappy retail is dead. That's the technical term. What we're finding is that even the most online, digital oriented companies, guess what? They're pouring brick and mortar. Go figure, makes no sense. Now, this is a busy slide. I'm gonna apologize for that. But remember, we're now buying as consumers different things for different purposes. Is it bricks and clicks? No, it's both. It's omnichannel. It's what they need at the point of what they need. So if you're going online, absolutely. People are going online for value shopping. I'm looking for something that's cheap. I know what I want, I'm gone. It's a commodity purchase. I don't need to go to the store to buy a stack of bounty towels. I don't need to learn about it. I don't care about it, just get it delivered. Transactional convenience, I have no relationship to the brand, I could care less, just get it brought to me. And by the way, it's a job, it's a task. And I'm gonna go back to the woman needing just in time all the time. She's trapped between kids work and probably a significant other who can't make a peanut butter and jelly sandwich. She needs to get the job done. But in store, we're finding that the retailers that do well, it's about curating a new inspiration, a new way of living, a new product. It's not about selling you the same thing you know about. It's about novelty and education. We're looking at brand engagement. No, you wanna come here because this is part of an overall experience. And believe it or not, shopping is still social. Going with somebody or going to see others. And by the way, Gen Z and millennials are showing that they are more likely to wanna go to the store to socialize and to experience and look in touch. And then once they learn and once they know the brand, then they go online. So it's not an either or. I'll give you an example. As many of us know, go to Apple, it's an education experience. It's a fun experience. It's always mobbed. They encourage you to learn and teach and play. They will never kick you out of the store. Go to a Microsoft store that is all about the product. It's always empty. And their shirts are boring, but I'm sorry about that. Sephora. Now I get a lot of strange looks on this one. I have been known, you can don't arrest me on the way out, been known to go to Sephora to watch women shop. Now luckily, and try on makeup. Luckily I have two daughters that kinda keep me from being arrested and they go in there and buy. But Sephora has a strategy called TIP. Teach, inspire and play. The idea is how do you engage people to do things differently in place? And Pet Village teaching you how to treat your dog, your cat, whatever it might be. How about this? How many of you remember when the small carts came out on the market not too long ago? Any guesses as to why? Was it the obesity crisis? Were you trying to limit how much people were eating? Any guesses? Demographics. Why? All of these stores and more are going down to what they call the new urban format store. And at the top level kinda headline thinking on a newspaper level, well it's a urban format because they're all moving into the urban areas, they need to be smaller, real estate's pricey. Yeah, that's true to a point. Walmart got to be Walmart, not just because of an amazing supply chain strategy and payment strategy, but they also got to be Walmart and I know you're here, because you had station wagons and vans showing up with two parents and five kids and six dogs in the back of the car. But you know what the problem is now with these stores? No one wants to go into five acres of parking lot into three acres of store to buy one can of tuna fish because you live in a household of one. Think about how packaging has changed and what we're buying. I love this, this is poor father's meals from Korea because guess what? The wife and if they had a daughter are out on the town, dad's at home using the microwave. That's not a half eaten loaf of bread, that's a full loaf of bread. And by the way, when did we start selling bananas one at a time? But the one I really like is Duncan Hines, a birthday cake for a party of one because we're living solo, imagine how that song goes. So we gotta rethink that just retail experience, but what do we think about packaging? I want you to bring together the idea of millennials and Gen Z being very concerned about the environment, but also the older consumer who's got the economic muscle but maybe not the physical muscle anymore. Heavy products on the bottom of the shelf, top of the shelf, things that are easy to read without your glasses, be honest. Now look at the guys, I guess women have the same challenge. How many of you cuss every time you have to open up your razor blade packs? Or grab a sub-hairs scissors or pliers. By the way, the most popular tool for older wood people to open up their pill bottle, it's not their grandchild because by the way, if you ever watch a kid they lean on the thing to open it so that idea of press and turn is kind of a waste, but one of the number one tools, a nutcracker to be able to open it up. So we gotta rethink packaging overall and I defy any of you to tell me that you actually know how to open up a shampoo bottle while you're in the shower, push and turn, push and turn. By that time, you're out of hot water. Lastly, I want you to start imagining the home no longer is a place to live but is a platform of services if not a health platform overall. Now I want you to ask yourselves and be honest, where were you March of 2020? You know where you were? You were in a big box store buying toilet paper by the pallet load, which by the way was profoundly rational in many ways, but we also found my team at the lab did some studies during COVID and we also found that people were buying technology maybe not by the pallet load but I would suggest to you that we've advanced technology and demand for technology related services to the home probably four to five, maybe as many as seven years faster than it would have naturally evolved. We're also seeing this store of companies like Samsung and the like developing not just internet connected systems but systems that will facilitate home delivery of goods and products before you even know them. So for instance, in my house, a major food group is Ben and Jerry's chocolate fudge ice cream. I want my fridge to know that I'm out of it before I go down at 10 o'clock and start cursing the fact that my girls ate it before I did. I want you to imagine this is work being done by my colleague Chowoo Lee on the idea of that the platform might be all that internet of things in the home that the sensor rich technology being blended with the sharing economy being brought together with robotic assistance and perhaps many platform brands that are the trusted people that will come into my home to deliver those things. And we already see this with Walmart and other companies they're not just dropping it off at the door they're coming in my house sort of thing about what the new characteristics of that end of the supply chain has got to be we'll come back to that in a moment. But we're also seeing a whole new movement called hospital at home. All the technology that we used to have in a hospital room hospitals like Cleveland Clinic, Mass General Brigham and whatnot are now providing care in the home by giving a complete instrumentation outfit dialysis in the home. This requires more than somebody just dropping stuff off this is to require somebody crossing the threshold installing and doing the mechanics and bringing supplies and like. And my favorite example, I know you just had lunch so I'll try to keep it clean. I want you to imagine a smart toilet. The best way to put it, let's see there must be a computer science here someplace we'll keep it clean. I want you to imagine a toilet that shall we say downloads from the user. Use your imagination. Your body weight, did you take your meds are you eating right? And then uploads those data to a call center whatever it might be or nutrition center but there was a pilot program being done by VIP toilets in the UK to facilitate home delivery of the foods that apparently your toilet deemed you're missing from your diet. But I want to leave you on this note. I want to go back to the end of the supply chain where you touch me, the consumer. That person that comes to my door is no longer going to be just in a trusted uniform. They've got to be trained, empathetic, educated in a way that understand what's going on when they go there. Cause here's the scenario. You are now looking at a world where we want people to go in our homes to get things done because we don't have the time or we want them there because we can't take care of our parents or our parents are doing it because they need an extra hand. Is your supply chain, do you have people on your team that are trained enough where you would say, gee, my mom's 85, 86 years old, kind of frail, cognitively little weaker than she used to be that you would trust to go into her home, pack the fridge or to change the dialysis equipment, whatever it might be. The future of supply chain is no longer getting it there and ready for the consumer. You're now a partner with the consumer and with the brand you represent. But on that note, if you're gonna live 100 years, I wish you to enjoy it. Jim, sorry I went over time. Thank you all for having me. Thank you.