The IBM Institute for Business Value recently put out its Automotive 2030 study that polled 11,500 consumers and 1,500 industry executives around the world. Consumers were asked questions around automotive brand loyalty, and their answers revealed that as the industry moves away from vehicle ownership and toward vehicle usage, like ridesharing, brand loyalty will decrease and factors like cost and convenience will have a greater pull on consumers in the marketplace.
By 2030, up to 15% of new vehicles sold to consumers could be fully autonomous. Without the brand name as a differentiator, how will automakers entice drivers to choose their brand?
The answer: technology.
From personalized rideshares to incredibly connected software systems, automakers’ value proposition will move from hard numbers like horsepower and torque to ease-of-use and in-vehicle features that elevate a consumer’s drive in a different way than what we’re currently used to.
Here’s the kicker, though. While customers will look for convenience and cost, they may be willing to pay more for certain features, like data-protection while riding, simple communication with the vehicle in use, or car seats or accessibility features for people with differing abilities.
And we can’t knock the loyalty programs of today – there is the possibility that these programs could transition into a marketplace based on automation. Enticing customers with loyalty points to choose a certain brand could work in a future of experience-based driving.
Think of the Lexus brand’s Rewards Program; preferred parking at sports games, suite and lounge access at theatres, and resort credits at various locations around the country? Sign me up! While Lexus stands out in a sea of different rewards programs across brands, I wouldn’t be surprised if others take note of their strategy as the market turns away from ownership and toward ridesharing.
Out of the 1,500 executives polled in the survey, 46% are expecting brand loyalty to provide a competitive advantage by the turn of 2030 compared to 69% now, and 80% of them are looking to digital services to differentiate their brands by incorporating integration with personal devices, giving the vehicle the ability to learn about its users, and more. Half of them said that "to succeed or even survive in the next ten years, they need to reinvent their organizations with digital technologies.”
Remember those value-based features customers may be willing to pay more for? If an autonomous vehicle can remember that a user needs a car seat for a child, or that he or she prefers the temperature inside to be at 72 degrees, that brand may just see greater consumer loyalty than a brand without learning abilities.
As dealers, there isn’t much we can do to affect corporate strategy or tech features at the Tier 1 level, but perhaps there are ways we can start positioning ourselves within our own markets to prepare for the future.
How do you establish loyalty with your customers outside of branded features, price point, or discounts? Is there an opportunity to educate buyers about a shifting market today, or is it still too early to tell how industry changes will affect your dealership?
No matter what happens to the automotive industry in the future, one thing is for sure – change is coming.
How are you preparing?