Driving the Evolution of Automotive Experience

by Axel Heyenga

Posted on 11-01-2017

Over the last few decades, auto­mo­tive tech­nol­o­gy has advanced along with man­u­fac­tur­ing and com­mu­ni­ca­tion tech­nolo­gies to realise some of the most sophis­ti­cat­ed and com­plex machines on the plan­et. Tech­nol­o­gy has also changed how peo­ple view, pur­chase, and use automobiles.

To cap­i­talise on the oppor­tu­ni­ties these new tech­nolo­gies make pos­si­ble, OEMs must under­stand how they are chang­ing both mar­kets and con­sumer expe­ri­ence and how busi­ness­es are evolv­ing to meet cus­tomer needs.

Deliv­er­ing Con­tent and Messaging

First, let’s take a look at con­nec­tiv­i­ty. Con­nec­tiv­i­ty is the foun­da­tion for almost all expe­ri­ences deliv­ered by OEMs into their prod­uct ecosys­tems. OEMs are com­modi­tis­ing the abil­i­ty to pair phones, utilise map­ping appli­ca­tions, and search for route and oth­er infor­ma­tion, gen­er­at­ing new rev­enue opportunities.

As con­nect­ed devices, auto­mo­biles can pro­vide cus­tomers with valu­able infor­ma­tion and serve as a medi­um for access­ing ser­vices and offers in real time. These ser­vices include noti­fi­ca­tions around car main­te­nance needs, real-time traf­fic and rout­ing sug­ges­tions, and on-demand rec­om­men­da­tions for ser­vices along the route. Accord­ing to a KPMG Auto­mo­tive Study, while 57 per­cent of car buy­ers have con­cerns relat­ed to use of their data, 82 per­cent would be will­ing to exchange their data for ben­e­fits. This mind­set is a clear call to action for OEMs to cre­ate real val­ue for their con­sumers. What’s more, OEMs are able to mea­sure those engage­ments to fur­ther tai­lor the cus­tomer expe­ri­ence based on the suc­cess of the mes­sag­ing and offers.

Free­ing Con­sumers to Browse

Autonomous vehi­cles are anoth­er emerg­ing tech­nol­o­gy dri­ving change in the auto­mo­tive indus­try. Tech­nol­o­gy advances are just begin­ning to make these vehi­cles pos­si­ble, espe­cial­ly with­in the con­fines of traf­fic laws and oth­er hur­dles asso­ci­at­ed with dri­ver­less cars becom­ing an accept­ed norm.

How­ev­er, by 2030 the busi­ness oppor­tu­ni­ty for busi­ness­es involved in autonomous vehi­cles is expect­ed to be around US$60 bil­lion. That’s quite an expan­sion in a rel­a­tive­ly short time and should be incen­tive enough for OEMs to explore autonomy.

What’s even more inter­est­ing is that this tech­nol­o­gy is chang­ing how con­sumers think about vehi­cles and vehi­cle own­er­ship. Where­as upward of 40 per­cent of con­sumers say they would not pur­chase a ful­ly autonomous car for them­selves, most of those sur­veyed would be will­ing to use autonomous vehi­cles as a trans­porta­tion option in the future. Thus, it’s like­ly that autonomous tech­nolo­gies will soon pow­er indus­tries such as taxis and pub­lic transportation.

What’s great for OEMs is that while autonomous cars take care of the dri­ving, cus­tomers will have plen­ty of time and free­dom to browse ser­vices or oth­er prod­uct col­lat­er­al that are deliv­ered to them in tran­sit. Yet, con­sumers are unlike­ly to engage with this mes­sag­ing unless OEMs use the data they col­lect to gain insights into their cus­tomers’ desires and needs and exploit auto­mo­bile con­nec­tiv­i­ty to deliv­er cus­tomised con­tent, ser­vices, and enhanced expe­ri­ences to enter­tain and edu­cate users. Only if OEMs deliv­er real val­ue to cus­tomers will they be able to occu­py this role with them. From there, they can build com­pre­hen­sive new rev­enue streams beyond sim­ple car sales and ser­vice fees.

Cre­at­ing New Ser­vice Needs

Propul­sion is a third tech­no­log­i­cal area mov­ing the auto­mo­tive indus­try for­ward. Where­as today’s com­bus­tion engines are set to dom­i­nate the indus­try for the com­ing decades, new propul­sion tech­nolo­gies will con­tin­ue to gain influ­ence as they become cheap­er and more effi­cient than combustion.

Over time, mar­kets will see large shifts in this regard. For exam­ple, auto­mo­tive fore­casts show that Tes­la will gain high­er mar­ket cap­i­tal­i­sa­tion than both Ford and Gen­er­al Motors, even though it pro­duces only a frac­tion of the cars these larg­er play­ers do. This is due to the company’s com­mit­ment to lever­ag­ing new tech­nolo­gies to pow­er both its cars and its cus­tomer expe­ri­ences, as shown by the Group XP Expe­ri­ence Report.

The increase in the num­ber of cars using propul­sion engines will dri­ve new demands from users that will evolve into new busi­ness mod­els and rev­enue streams. For exam­ple, if I want to dri­ve my Tes­la from Munich to Ham­burg, the bat­tery load will not be enough to dri­ve in one leg. The car will need to know this before­hand (by way of tech­nol­o­gy built in at the OEM), and can iden­ti­fy car-charg­ing sta­tions along the route or even sug­gest restau­rants, cin­e­mas, or oth­er enter­tain­ment activ­i­ties for me to do along the route or while the car is charging.

OEMs will be able to cre­ate and cap­i­talise on a com­plete­ly new ecosys­tem focused on these cus­tomer engage­ments. Look for more in my next blog on what new busi­ness­es are break­ing into the mar­kets and how they are chang­ing the way peo­ple buy their cars.

Topics: Digital Transformation, Automotive, customer journey, customer satisfaction, Lifecycle, personalisation, UK, UK Exclusive, Digital EMEA