Car data monetization will reach USD 450-750 billion by 2030, according to Mckinsey. How will tapping into unexplored data affect the future of businesses and their customers? Read on.
Smartphones, smartwatches and smart home devices have redefined consumer expectations and how they interact with the phygital (physical + digital) world. The automotive consumer is expecting similar or even better experiences from their vehicles; forcing enterprises to innovate accordingly. Emerging tools and technologies like sensors, edge computing, 5G, and Artificial Intelligence, voice interfaces are all helping enterprises access data and uncover insights; realizing the old cliché – “Data is the New Oil” (although they really want to be in the refining and distribution parts of the value chain and not just extraction).
Today, businesses are growing by monetizing the benefits from data in different ways including, subscription model, a one-time pay model or barter system with all the models being defined by the core idea of offering added value experiences to the end customer as an inducement for them to opt-in to sharing their data. Let’s have a look at a few drivers that will influence the pace of automotive data monetization.
Searching for parking wastes time, money and energy while adding to the traffic on the roads. But insight into scenarios when a customer will be willing to pay for the convenience of parking is a window of opportunity for an app-based parking business model. For example, having a guaranteed parking spot when you plan to head out for a Red Sox game! The automotive industry can tap into insights from data like one’s interest or calendar that might seem mundane to us but has the potential to significantly enhance our everyday experience - both in and out of the car.
Consider Over the Air (OTA) updates that have been made possible with the cars becoming connected. OTA allows for many additional features that add convenience to both automakers and a typical customers life. The driver gets to benefit from features such as predictive maintenance of to avoid breaking down, while the OEMs can share software updates, that earlier required costly vehicle recalls, to patch or update identified issues in the vehicle.
New business models such as Car-as a service (CaaS) are offering on-demand mobility to customers at reduced costs. At the same time, various businesses like transport logistics companies and restaurants are finding new intelligent ways to leverage vehicle data to help them cut costs and deliver innovation. For example, Uber Eats and Dunzo are capitalizing on the already available network of vehicles to reduce their delivery costs while at the same time enhancing the customer experience.
As the cars become more autonomous, retailers might be able to better capture their customer’s interest with targeted advertising in a connected car’s infotainment system based on data like destination and timing. Of course, this will have to be done in accordance with distracted driving regulations. One example of this could be selling the POI slots for popular destinations such as gas stations, car parks or restaurants so that they are given higher resolution graphics, priority in listings and search results etc…
With the increase in the quality of cameras and sensors that are deployed for Advanced driver-assistance systems (ADAS), the accuracy with which we can track connected vehicles can be instrumental in saving human lives. For example, emergency services can track the exact vehicle location, most likely type of injury, vehicle speed details and more to take appropriate action while the EMTs are on the route, and also ensuring the closest ambulance, with the right equipment, to the accident site is dispatched.
Add to this, the cashless hospitalization by insurers on time as medical insurance companies are aware of the incident. Also, faster disbursal of car insurance for repairs due to more transparency in the process.
Traffic planners will also be able to re-define how they plan for safety on the roads. If a particular area is more prone to accidents, they will be able to use data analytics to better understand the root cause of accidents and the mechanisms to prevent them in the future. Moving beyond the standard approaches of reducing speed limits, adding more paint to the road or putting up signs that typically take years to have an impact.
Cost Vs Value:
Creating value with better customer experiences will need companies to be watchful of the developing trends and the related opportunities they will create. Clearly, the ability and the desire to pay for any product and service is dependent on many factors. For example, with increasing levels of vehicle autonomy, the demand for infotainment is growing. Travelling is transforming to become an entertainment and productivity hub. Imagine the possibility of a rise in demand for work productivity tools including and games that are augmented reality / Virtual Reality based when the driver is free to relax or work during a commute.
With enhanced cloud connectivity and use of technology that allows more contextual and personalized offerings, there’s huge untapped potential in transforming generic experiences to unique ones. Technology like virtual personal assistants, hi-tech HMI, and robust sensors are already changing everything from vehicle operations to vehicle communication paving way to better monetization. But the automotive industry will need to embrace agile practices, experiment with different models and collaborate with other industries to woo its stakeholders before they readily pay for new offerings. Above all, they will need to ensure the privacy and security of the consumers by defining and adopting industry practices not only from automotive but from many different industries.
Andrew Till, our Vice President of Technology, Partnerships & New Solutions will be exchanging his ideas and experience with other industry leaders on the potential of car data monetization and explore new use cases on January 30, 2019, at Handelsblatt conference.
If you’d like to know more please write to us here or join us at the Handelsblatt Conference 2019 at Munich, Germany. You can also get the latest updates on the discussions by following us on LinkedIn/Twitter.