Ask any automotive executive the following question: “Which part of your car generates the most power?” Their answer will likely influence your purchase decision significantly. If that person answers, “the engine” or “the powertrain,” you’ll know you are dealing with someone at least ten years behind the times.
The part of a car that generates the most power is the smartphone. It is the centerpiece of everything that happens between the car, its owner, and its manufacturer. It is its intelligence, its security system, its entertainment, communications, and commerce hub. Increasingly, as car-hailing apps like Lyft and Uber have shown, it is also the device that gets cars and people together, in innovative and versatile ways.
This is a revolution for the automotive industry. It is an age unlike any that has come before. For the past one hundred years, improvements have been made to all the physical components of a vehicle, from tires to roof, and from fuel economy to safety. But throughout all of this, a consumer’s vehicle has remained a mechanical possession, generally owned by one person at a time, remaining parked and idle for most of its life, and generating revenue for the manufacturer through sales, maintenance, and repair.
The advent of the smartphone, with its app for everything and its universal accessibility, has changed the relationship on all three sides of the consumer-vehicle-manufacturer triangle. This is now the “post-ownership future.” The commercial tenure of a vehicle has grown exponentially and has crossed borders into other areas of consumers’ lives. Automotive companies are recognizing this, but it remains to be seen just how well their reactions can keep pace.
The Mobility Ecosystem
In the post-ownership future, consumers, dealers, and manufacturers alike are learning how to exist in a mobility ecosystem. Those are powerful words. Mobility connotes far more than mere car ownership. It includes ride sharing, car sharing, usage by the hour, and using alternate forms of transport as needed. It can also include not moving at all, but arriving virtually through tools like Skype and FaceTime from the front seat of your parked vehicle.
Ecosystem brings to mind a remarkably connected and symbiotic existence, where a driver’s music or podcast collection hands off effortlessly to the onboard entertainment system, where turn by turn directions and real-time parking space information arrives just when it is needed, where car and owner communicate via smartphone, and where car and manufacturer communicate via the house WiFi.
The Mobility Ecosystem Demands an Experience
The twentieth century model of ownership is fading away in all areas of commerce, not just automotive. Consumers are now looking for experiences. They expect to rent and consume products based on their preferences. They arrive well prepared and turn to their smartphone for reviews, comparative data, and options. This means automotive companies, as well as all other types of vendors, must evolve from product sellers to purveyors of value and experience.
This transition towards experience extends beyond the smartphone, of course, but still orbits around it. While the customer uses her smartphone to learn and decide, so, too, the vendor can use the same medium to contact individual consumers, build a direct, personalized relationship, and collect vital data along the way. Some examples of this new automotive marketplace include:
- Ford’s spin-off company, Ford Smart Mobility LLC, dedicated to including innovations like advance booking of parking spaces in cities and at airports. This provides an added service to the car usage experience, while allowing Ford to expand into, and monetize hitherto untapped aftermarkets, in this case, the $7 billion/year parking industry.
- GM and Toyota, who are each offering car sharing programs based on the Zipcar model.
- Ford, which is testing an Airbnb-style car sharing program, leasing a single vehicle to a group of people rather than to one person.
- Cadillac, offering a $1500 per month subscription service, giving members access to a variety of models to fit their daily needs. They have seen just how big a bite ride sharing has taken out of the market, and they want it back.
This transition is the reason why dealerships are being retooled to become the face of the brand experience. Since shoppers can now go online to do all the research they need about models and warranties, they are cutting back on dealership visits substantially, turning instead to online brokers, many of whom represent more than one brand. This demands more tailored relationships, proactive customer service, and improved financing options, to win back trust and convert visits to sales.
In the Mobility Ecosystem, automotive manufacturers may not ever have to provide every service themselves, but from now on they will be the proactive hub where industry partners, distributors, and consumers mingle and coexist. Manufacturers must move to the front lines, rather than residing as the anchor at the back. They can and must deliver the immediacy and interactivity demanded by their customers. By doing so, they will own and control the customer data and the end to end customer experience, which in turn will fuel their future prosperity.
Own your automotive marketplace
In the automotive industry, a vehicle is becoming just one part of a new marketplace for mobility – one that focuses on service, personalized shopping experiences and realtime communication.
With the help of SAP Hybris solutions, automotive companies can:
- Interact directly with customers and own the experience
- Harness customer data
- Fulfil orders through channel partners, avoiding channel conflict
- Meet customer expectations for B2C-style experiences
Want to learn more about selling directly and creating a bigger value pie for all? Check out the latest Forrester Custom Technology Adoption Profile, commissioned by Mirakl and SAP Hybris.