Digital innovation has been causing market disruption across all sectors, including high profile cases in the music and private hire industries, where Spotify and Uber have embraced the opportunities provided by digital technology to become industry leaders. This new era of market disruption is being led by companies that are basing their business models on apps, smartphones and the Cloud, with a focus on access rather than ownership, along with the potential to scale up easily when needed. This exciting movement is all about Big Data, convenience, personalisation, and contextual services – and it’s happening right now.
Disrupting driving
With the first models of driverless cars now being tested at various locations worldwide, the automotive industry appears to be next in line for a shake-up. Westfield Sportscars, a British vehicle manufacturer, has confirmed it will be testing its driverless car designs in Greenwich, London, in the summer of 2016, along with three other locations across the UK. Westfield is clearly very hopeful about the success of the project, investing £8m (US$11.25m) in the scheme, which will see seven driverless cars undergoing three months of testing before members of the public are invited to try out the models at the end of the year.
The new prototype takes its design from the pods currently in operation at London’s Heathrow Airport, which shuttle passengers between terminals. Despite the finished design not yet being released to the public, it is known that the adapted vehicles will not run on designated tracks, which means that driverless cars may soon join traditional cars on the road. These developments should come as a warning not only to car retailers and manufacturers who need to keep abreast of competition in product development, but also to councils and transport highways agencies who need to consider the laws and impact that driverless cars will have on the roads.
Car retailers are already facing a new reality: cars can now be easily purchased via the Internet, with bespoke design requests able to be fulfilled online, without the need for a physical salesman. With commerce in the car industry increasingly heading online, there is not the same loyalty to car dealers as there was just five to ten years ago. It is therefore vital that car retailers maximise their online offerings to ensure direct, personalised marketing and service is available at all stages along the customer journey.
Data-driven opportunities in other sectors
With Uber now a firm fixture on the roads of most major global cities, the driverless car is set to further revolutionise the car industry and the way we transport ourselves. This shift is likely to fundamentally change our perception of the traditional car and what we expect from the wider automotive industry. However, beyond the driverless models themselves and the impact on individuals, a plethora of new opportunities will be opened up for car manufacturers, giving them the chance to interact with and impact other sectors if they so wish.
The driverless, electrical cars being developed at the moment will be combined with data sharing platforms that provide the opportunity to change the way in which businesses in many industries communicate and engage with their consumers. Through the use of location-based marketing and data collection, a number of industries will have the opportunity to collect information based on users’ locations, activity and behaviours. This will create huge benefits for the likes of the entertainment, food and hospitality industries, which rely on location-based data to fuel their targeted marketing activity.
For example, restaurants may have the opportunity to broadcast special offers and promotions directly into these driverless vehicles when they are within a specific proximity of the restaurant. Similarly, entertainment venues may choose to broadcast ‘upcoming events’ notices into passing cars. Manufacturers of driverless cars in the future would do well to tap into this potential for significant commercial agreements.
Beyond the opportunities provided by data sharing, industries such as the healthcare sector could also benefit from having driverless cars, since these vehicles could help those that rely on a third party for transport to travel to appointments more easily . In the future, driverless technology may even power vehicles such as ambulances and paramedics’ cars to transport both patients and medical staff around.
Divided opinions
Despite the advantages that this new level of innovation will bring, the concept behind the driverless car has split the automotive industry. Some companies are expected to announce their own plans for addressing the driverless debate, with many already installing driverless features into their cars. Ford has alluded to a tie-up with Google to work on its own brand of driverless cars, with the Internet search giant already claiming its engineers have driven over 1 million miles testing its driverless technology. However, it would appear that the luxury automotive market is keen to distance itself from the digital revolution, with Porsche recently stating that the brand has no plans to follow suit.
With a recent prediction from the UK’s Institution of Mechanical Engineers suggesting that all UK cars could be fully driverless by 2050, digital innovation in the automotive industry has only just begun. Disruptive technologies are not only enabling small start-up companies break into the market, but also to create real competition for some of the biggest and most established players – not only in the automotive industry, but across a wide variety of market sectors.
Uber and Spotify have already proved that digitalisation is the way forward when targeting today’s consumers. It is only a matter of time before these technological advances become the norm and all industries become truly disrupted. In order to thrive in these fast-moving markets and stay competitive, every business must be aware of the opportunities that these new technologies are creating and ensure they have an efficient digital development strategy in place early to benefit from them.
This article appeared in the Q1 2016 issue of Automotive Megatrends Magazine. Follow this link to download the full issue.
