Rethinking Commerce in a Connected Car World

October 6, 2015  |  By John Jasper  |       

commerce-in-a-connected-car
By the end of 2020, Gartner expects as many as 80 percent of all new vehicles to be sold with connectivity, according to a recent Reuters report. The report also notes that automakers will make an estimated one-tenth of their revenue from these connected services.

To date, commerce in connected vehicles has centered mostly on satellite radio and telematics services -- but the possibilities for revenue go far beyond these narrow categories. In fact, with the specific location and preference data connected cars offer, OEMs have many options for new solutions that will attract consumer interest and boost spending.

Here’s how the auto industry is rethinking commerce in a connected car world:

At Your Service

The logical starting points for developing new car apps are the transactions that already occur while consumers are on the road -- purchases like fast food, coffee, fuel, and even hotel rooms. An excellent example of this approach is AtYourService, a new feature from GM’s OnStar that connects drivers with retailers and merchants. Available to all OnStar subscribers, the service provides information, convenience, and savings tied to a driver’s specific destination.

According to GM: “When a driver requests directions to a point of interest that has an applicable deal or connection to one of its partners, the OnStar advisor can send the special offer from that merchant.” Additionally, OnStar advisors can help drivers locate hotels and make reservations. OnStar’s current AtYourService partners include Dunkin’ Donuts, Priceline.com, and RetailMeNot, with many more likely to come.

Speedy Checkout

The next step in connected car commerce is to sell products to drivers through in-car systems and interfaces. As described by Talent International, “This brings the sales process out of the physical realm and into a digital space.”

Visa is developing a platform to do just that -- by integrating Visa Checkout, its online payment service, directly into the connected car dashboard. Using voice control, drivers can pre-pay or purchase products and services while keeping their hands on the wheel. As part of its connected car trial, Visa has partnered with Pizza Hut to provide in-car access to menus and ordering. It is also testing positioning technology that will notify the merchant when a customer has arrived to pick up an order.

But Visa’s platform goes beyond this scenario. As explained in Visa’s press release, “We initially focused on a specific use case … but we envision a world where consumers can seamlessly make many of their everyday purchases from the car.” While Visa stands to gain the most from this commerce solution, OEMs can benefit as well. After all, any auto brands Visa chooses to integrate with will almost certainly become part of the payment value chain.

The Value Exchange

Now, it’s important to remember that no matter what approach OEMs take to grow connected car commerce, they must make sure there is a clear and appropriate value exchange for consumers. Why is this important? Well, because consumers won’t be willing to pay for extra connectivity or features (like OnStar, for example) unless they feel they’re really getting something extra.

Nearly everyone today can already use their smartphone for in-car transactions; OEMs have to make connected car commerce worth a consumer’s while. This might mean providing increased convenience, lower cost, less wait time, or special deals. On top of that, these in-car transactions should be just as easy to execute (if not easier!) using the in-car interface as on a smartphone.

What are your thoughts on connected car commerce?

Topics: Connected Car - Other

John Jasper

John is the President and COO of Abalta Technologies. Abalta Technologies, Inc. is an emerging leader in the connected car landscape. Abalta has developed an innovative platform to enable car companies, automotive electronic firms and tier 1 suppliers to bridge the gap between the smartphone and the car’s infotainment system.

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