How Autonomous Vehicles Will Change Marketing Forever
July 17, 2017
As on-demand and subscription-based services rise, we own less and less. After giving up our DVDs for Netflix and our CDs for Spotify, are cars next? While many of us begin to acquiesce ownership of vehicles for ride-sharing and give up the classic driving experience to artificial intelligence, the way cars and other products are sold is changing drastically. From selling a very different experience than before to disrupting industries such as auto repair all the way to retail and banking, companies will need to shift their marketing strategies to not only keep up, but stay competitive and thrive in the age of autonomous vehicles.
Driving-As-A-Service On The Rise
Although the need for transportation continues to rise, the way end users consume vehicles is shifting greatly. Leading companies like Tesla, Ford, and Nissan are actively pursuing fully autonomous vehicles. If the driving is done for a passenger, at first by another person and eventually by a machine, the appeal of a vehicle for most people becomes less about a feeling of power and control.
Ashwin Raj, VP of Lyft, shared his thoughts on the future of the automotive industry, predicting: “You won’t own a car; you will only subscribe to a certain number of rides.” (7:42) If people cease owning cars and instead “rent” them short term to get from point A to point B, certain aspects of a car become less important while others become more valuable.
Marketing Changes for Automotive-Related Companies
The ability to multitask in order to pursue other aspects of life becomes the main attraction of being driven somewhere. To those who knew what it was like to drive before autonomous vehicles and now find their commutes freed up, saving time is an effective value proposition.
Product features like smartphone integration and on-board wifi become more desirable since consumers will want to connect to the outside world with their free time.
Artificial Intelligence will revolutionize both the vehicle functionality (i.e. safety) and commuter experience (i.e. personalized suggestions). Zack Hicks, Chief Executive Officer and President of Toyota Connected, says this will be a differentiator once self-driving cars are widely accepted.
Comfort will also be important, as consumers have plenty of attention span to notice this aspect of their experience. Some users may want to shut out the world so an “offline mode” option should be available and promoted.
Convenience of the ride-sharing service will be (and already is) critical to most users. People may be willing to give up control over the steering wheel but not control over where they want to go and when they want to arrive.
Long-term reliability of a vehicle and the availability of replacement parts become only the vehicle owner’s concern. With a decrease in owners, this once-attractive benefit becomes relevant only to a niche audience.
Consumers will demand a wider array of ride-sharing options as consumers with a wider variety of needs join. For example, families will need larger cars and the ability to install a car seat on-demand.
Safety continues to play an important role in the consumer’s mind until self-driving cars become widely accepted and taken for granted. Then, safety will still play a role, especially for parents, but will generally drop from top priority.
Many tertiary businesses will become enterprise businesses instead of appealing to individual consumers. For example, if fueling costs get built into ride fares and ride-sharing companies own the responsibility of fueling, gas stations must now appeal to a small number of owners with huge fleets of vehicles.
The Biggest Opportunity: Unrelated Industries
Of most impact, industries indirectly affected by the automotive industry now have a shot to grow with the shift from distracted drivers to idle passengers. In general, businesses people previously drove to and industries that require one’s full attention can now enter the vehicle and sell to the consumer in-vehicle. For example:
Banking: As Ashwin Raj notes, “In an autonomous vehicle, the ATM can come to you,” (8:23).
Advertising: Windows and screens can become interactive advertisements that can change based on GPS location.
Retail: Passengers now have more hours to shop online and location can play a more immediate role in affecting purchasing decisions.
Media: Passengers now have more hours to consume media, like television, movies, video games, virtual reality, and more.
The opportunities self-driving cars pose for the way we work are immense as well. Our flexibility increases when we no longer need to pay attention to the road and the car becomes our mobile office. Will it become a standard expectation that employees work while commuting? Will this lead to fewer hours spent in a traditional office? In this light, nearly every industry has the potential to change because of the widespread adoption of this technology. Recruiters can relay these benefits to potential employees.
Many have speculated about the changes self-driving cars bring to other areas as well, like energy, urban planning, hospitality, and much more. Check them out here (CB Insights, CNBC, Startup Grind) and then imagine the marketing implications.
Will The Classic Driving Experience Make a Comeback?
Ultimately, will the classic experience of driving be missed? Will we have a nostalgic longing for the control of driving and the thrill of hugging the curves of a winding road? While we still have generations of people who remember growing up with aspirations of earning their license, owning a car, and expressing their status and personality through vehicle ownership: yes. As driving becomes less necessary in order to obtain goods, services, and information, and as focus shifts on other parts of life, upcoming generations will have less and less experience with classic automotive marketing and will form a different expectation of transportation.
After all, how many people miss dialing a rotary phone and only being able to use it to talk to people, as opposed to texting and using apps? How many of us think nothing negative of flying on airplanes, even though planes have become mostly “driverless” by primarily using autopilot?
With the rise of autonomous vehicles and ride-sharing, virtually all industries will experience change in both their business and marketing. Whether ride-sharing companies and car manufacturers shift to accommodate for the loss of vehicle owners or outside industries fight for the attention of more idle passengers, the tech evolution of the auto industry is ahead.