The Connected Car: How MR Must Flex to Meet Millennial Demands

2013-06-carFifteen years ago I started a career as a tech writer, which included predicting how the new era of ubiquitous, always-on connectivity would ultimately change our business and personal lives. As the tech bubble rose, we all predicted evermore incredible things and, of course, many were nothing more than hype. My personal favorite is the Internet Refrigerator, possibly the most oft-quoted example of what an always-on digital life would enable. Imagine a refrigerator (so the story went) that monitors the food inside it, notifies you when you’re low on milk, and even orders your weekly groceries online. I first wrote about this concept back when “dot com” was still a fashionable term, and yet a decade and a half later, my refrigerator sits dumbly with a near-empty carton of sour milk inside.

The Smart Fridge bomb of the 1990s leads me to ponder: what are the hype examples of today that are destined to become ironic footnotes of tomorrow? A straw poll among colleagues quickly offered up a likely candidate in the form of the Connected Car. Imagine a car (so the story goes) that has always-on wireless broadband, monitors its own health as well as that of its driver, communicates with key information sources (traffic, weather, even other cars), and is a hub of streaming entertainment for its passengers. Sounds great, but experience tells us that the mere availability of technology is no harbinger of success. The real question is this: will Connected Cars satisfy a genuine need and thereby stimulate ongoing consumer demand?

A New Generation with New Demands

I’ve realized that I am the wrong person to predict the future of the Connected Car. That’s because I am part of Generation X. I recall clearly a time when there was no internet, a time when music resided on LPs, and a phone call outside of home required a quarter. Gen X snubbed Internet Refrigerators and is just as skeptical now about Connected Cars. But that doesn’t matter one bit because Millennials are the future of the auto industry, and their expectations are profoundly different. Consider these distinctly Millennial attributes:

  • Internet Natives: This generation has grown up with the internet, believes wireless communication to be a “hygiene factor,” and sees interactive, data-driven experiences as a business and social necessity.
  • Smartphone Junkies: Smartphones outnumber automobiles five to one for this group. Millennials’ smartphones already interact seamlessly with multiple other sources that they own or encounter each day.
  • Content Cravers: Millennials have shown themselves to be rabid consumers of new content through new channels, given the right business model and delivery mechanism (witness the explosion of apps, streaming music, social media, etc.).
  • Connected Commuters: The typical Millennial commute is highly interactive. The idea of “digital downtime” during commuting hours is inconceivable, making them far more open to Connected Car innovations such as personalized streaming music or voice-activated social media.

Millennials will undoubtedly demand a Connected Car, but can Detroit deliver? By itself, it can’t. We can expect Connected Cars to create massive upheaval within the auto industry, leading to the entry of multiple new tech and telecom players forming unlikely partnerships with OEMs. We’ll see partnerships with wireless operators, software developers, content providers, etc. Once formed, these partnerships will set about developing entirely new business models and create completely new digital experiences for users. Imagine, for example, connectivity and content forming part of an auto lease.

Insight Will Drive Connected Car Innovation

Right now though, the potential players have many more questions than answers. Consequently, it’s a time in which consumer insight will play a critical role. Market research will need to flex along with the industry, going beyond just explaining “what” the demand is, and providing substantive detail on “why” and “how.” Automotive and tech companies alike are very good at answering the first question and stopping there. It’s no use knowing that (say) 80% of Millennials say they need a Connected Car, but not knowing why they do, or how they intend to use it. These deeper layers of insight are critical for the development of non-traditional players within their new business models. True insight will therefore be a blend of behavioral big data with vital qualitative and quantitative detail, ideally within a framework that facilitates ongoing refinement and a cycle of continuous improvement.

Success will come to brands that can look beyond the tech hype to gain a detailed understanding of the way Millennials live—not just what they want, but why they want it, and how they will use it. Then rather than peddling mythical Internet Refrigerators, automakers and their new partners can respond creatively with products and services that stretch the boundaries of their existing business models to meet the demand.

I’d love to hear what you think. Are Connected Cars the “next big thing” and what does this mean for your business? Contact me at paul.hartley@marketstrategies.com.

This entry was posted in Industry Expertise, Technology, Telecommunications and tagged , , , , by Paul Hartley. Bookmark the permalink.
Paul Hartley

About Paul Hartley

Paul Hartley is a vice president in the Telecommunications Division at Market Strategies. He has nearly 20 years of experience in the global telecom and tech sectors, focusing most recently on the North America market, where he led large research projects with customers including AT&T, Sprint, Bell Mobility, Rogers, Time Warner Cable, Comcast, Cox Communications, CenturyLink, Cisco, Oracle and IBM. Prior to joining Market Strategies, Paul held similar roles at comScore and LGR Telecommunications. Over the past decade, he has worked extensively with market-leading telecom and tech customers in Europe, Africa/Middle East and SE Asia. Paul holds a master’s and bachelor’s degree in marketing, advertising and economics from the University of Cape Town in South Africa.

3 thoughts on “The Connected Car: How MR Must Flex to Meet Millennial Demands

  1. Here is my take…

    The connected fridge always seemed like a marketer’s example more than an actual product people actually wanted or needed – an “X” to represent the possibility of connected devices rather than something destined to become a reality.

    Oddly the connected car does seem a missed real world opportunity but I suspect this is because car manufacturers are the least able to craft something that really fits the need.

    My 2011 Nissan still still cannot play MP3 in its CD player – this is frankly ridiculous.

    My sense is that some combination of standard interface to installed car infrastructure – mic/speakers/controls plus standard interface to car diagnostic systems would allow real-time monitoring or car generated data and ability to control peripherals that we carry day to day.

    In this sense the car becomes more or less offers the opportunity for connection to intelligent devices and offers its capabilities, much like a bluetooth headset does to a handset. Here we have intelligence/processing etc residing in clever attached devices rather than in the vehicle itself.

    Essentially dumb but connectible appliances – fridge/car/house but with the brains external to these.

    Keep well,
    Sam

    • Sam, I tend to agree with you. In the absence of a major game-changing technology that transforms the cars themselves (similar to the way the iPod changed music), the likely path is to replicate the experience that consumers already have with their smart devices, and integrate that into the auto space.

      Nevertheless, this scenario will still have auto OEMs, telecom operators, device manufacturers, software designers etc. having to collaborate and re-examine their business models, and most importantly, getting a clear read on the ‘what’ and the ‘why’ of consumer demand. And I’m confident that there will be demand, unlike the Internet Fridge!

  2. Excellent article. I love the comparison to the Internet fridge, and you are right on the money re Millennials. I could take it or leave it, but my two teen daughters have said many times that the car infotainment we have is backward compared to their phones and apps, and that I need an ‘upgrade’!

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