COMMENT: Big Data makes for big opportunities

BY SCOTT LOGIE. Cars are becoming more intelligent, that is certainly clear.The average family saloon now has more computing power than Apollo 11, the shuttle that first took man to the moon.

Cars are becoming more intelligent, that is certainly clear.The average family saloon now has more computing power than Apollo 11, the shuttle that first took man to the moon.

One major aspect of this ‘intelligence’ is how the information a car gathers is transported to the manufacturer and stored. This data is primarily used for logging drivers’ habits for insurance companies, tracking how vehicles perform for product development and providing early warnings of any problems with parts. However, there is now an evolving usage of data in other areas – such as marketing and customer management – that could turn out to be highly valuable for manufacturers and dealerships.

This is not just about what motorists should buy next based on how they drive, knowing when and where they drive, and how long they spend behind the wheel, opens up huge opportunities for the industry to build a more relevant and meaningful relationship with customers.

The amount of information our cars now store, and transmit, is enormous. Every second, a telematics device will produce a data record including information such as date, time, speed, longitude, latitude, acceleration or deceleration, cumulative mileage and fuel consumption.These data sets can represent approximately 5MB to 15MB annually per customer.With a customer base of 100,000 vehicles, this represents more than 1 terabyte of data per year.

Research from St Ives Group has shown that on average it takes between one and four months after a customer has decided to change their car to actually reach the point of purchase, with half of that time spent committing to the decision to buy a new car

For large manufacturers, dealerships and fleet management businesses, all of a sudden a Big Data challenge has arisen, with many left wondering how this data should be stored, accessed and used. But while some may be puzzling over this, others are reaping the rewards of one of the main benefits of telematics data: improved customer experience. For example, in terms of location, vehicles can already provide information on what is local to the destination on any journey; this is already being expanded to provide link-ups with hotels and restaurants, with the intention of supplying offers and booking advice either en-route or prior to journey. Customer convenience could also benefit: by using car location information and data from car park owners, the vehicle can find the nearest car park with spaces and provide costs.

Manufacturers can use this extension of the vehicle to build a longer term, more interactive relationship with drivers, helping to persuade them to stick with the same brand. Research from St Ives Group has shown that on average it takes between one and four months after a customer has decided to change their car to actually reach the point of purchase, with half of that time spent committing to the decision to buy a new car. With average car ownership around three years, an OEM has at least two and half years ‘alone’ with the customer to influence their next buying decision. However, only 27% of consumers reach the trigger phase of knowing the exact details of the make and model they want to buy. So there can be no doubt that a lot of work is needed by brands to build longer-term loyalty, and data can play a huge part in this.

Of course, it is not just the manufacturers who will benefit from telematics in cars, as the way in which we buy cars changes, so will the role of the dealership. Using data gathered in-car provides an opportunity to create a dealership experience that is interactive and engaging too.

For large manufacturers, dealerships and fleet management businesses, all of a sudden a Big Data challenge has arisen, with many left wondering how this data should be stored, accessed and used

Already, specialised systems are available to help buyers configure all infotainment options in a vehicle to specific requirements; it seems only a matter of time before this is extended into a full dealership concierge service. If the dealers have access to the correct data, they could pre-empt service dates, set up and have a courtesy car ready for you, and ensure you are looked after while at the dealership itself. By building this more enjoyable, personalised and hassle-free experience, dealers can create a lasting relationship with purchasers.

This, of course, creates an interesting dilemma for the manufacturer: the dealership building a good relationship is only beneficial if its brand is the one being sold. If the dealership has a range of options to sell, that creates a clear and present danger for the manufacturer.

Another stumbling block to the benefits of telematics data is the fact that it is still unclear who actually owns it, and how it should be shared. The data will automatically be sent back to the manufacturer from the car, but the data in itself it is not as interesting or useful as it would be if the OEM was aware of who drove the car. But the dealership can help complete this loop, both in terms of who initially buys the car, and also who brings it back for a service or buys it on re-sale.

Looking across the market, use of telematics data will continue to increase as vehicles get smarter, revolutionising the way that brands interact internally and with customers. Potentially it is only a matter of time before the car could directly compete with the phone and tablet to become the biggest ‘smart’ industry. Inevitably there will be issues of trust and data security, but man did not set foot on the moon by keeping it a secret now did he?


Scott Logie is Strategic Marketing Director, St Ives Group

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