In early 2014, Auto News was touting the race to market the connected car. As we enter the new year of 2015, there's been an explosion of connected cars within the automobile industry as auto manufacturers and internet developers race toward making the connected car not only a reality but something worthwhile for both the consumer and marketers.
Connected Car Sales Will Approach $2.3 Trillion
People spend 6.5 hours each week in their car on average. It's only natural that people are looking for new ways to use the time they spend in traffic. Auto manufacturers are converting the dashboards into digital platforms, which opens up a host of opportunities for digital media companies and marketers.
Business Insider estimates that by the year 2020, there will be 220 million connected cars. A bit more than half that number will have active users and the revenue from these services are expected to be more than $152 billion. These services will include things such as self-parking features and driver assistance systems. They will also include apps that will provide entertainment, increase safety while driving, help with the general well-being of the driver and the passengers, manage the upkeep and care of the vehicle, and manage the ability to navigate traffic and find places. Sales alone for connected cars is expected to approach somewhere in the neighborhood of $2.3 trillion.
Does the Consumer Even Want a Connected Car?
With all this excitement over connected cars, a salient question to ask is whether consumers want connected cars. Connected cars are so new that about 40 percent of consumers are unaware of the connected car industry or what it can do for them. That leaves a meager 14 percent who understand what connected cars are, at least in the broader sense.
In September 2014, McKinsey & Company reported that 37 percent of those surveyed would not consider a connected car; whereas, 13 percent would not buy a car that was not connected. Obviously, this is a marketing failure to point out the benefits of using a connected car. In similar surveys, when asked what features consumers would prefer, 69 percent of respondents wanted streaming music inside their cars, 57 percent wanted the ability to surf the Internet in their car, 52 percent wanted their car to identify accidents and congestion before they arrived, and also identify traffic signals.
So, the consumer indeed wants a connected car, even though he or she does not know or understand what exactly it is. It is important to show the consumer the benefits of having a connected car so that the person understands why connected cars are so important.
The Benefits of A Connected Car
Connected cars will provide opportunities for businesses to improve their services. Furthermore, they will create new business models that have yet to be understood. A car, for example, will be able to monitor itself and determine when it needs repairs and ongoing maintenance. It could send information out to the Internet and allow service providers to bid on certain services, thus saving the consumer money, and preventing costly breakdowns before they happen.
Marketers benefit from the connected car because suddenly there is a plethora of data about a consumer’s driving habits and driving behavior. With a little understanding of where the consumer goes, software could determine if the driver is going to work, the mall, the grocery store, or even on a vacation. By knowing the coordinates of where a consumer is, the connected car could provide information concerning sales, places to eat, things to see along the way, or even where the local Starbucks is.
The good news is that even if customers do not have a connected car, they can retrofit their car for conductivity with products such as Vinli, a product that was incubated and spun out of Dialexa Labs. Vinli enables any car to become a connected car and offers a plethora of apps that will help the consumer in marketing choices, safety, music, finding their way around, and other benefits. Just this week, it was announced that Vinli can now control your smart home.
The era of the connected car is here. It is likely that in the future we will wonder how we ever managed to cope without one.