According to a new report from Escalent, a top data analytics and advisory firm, consumers’ attitudes and emotions toward non-vehicle technology, data sharing and data privacy all play a significant role in shaping their need and desire for and likelihood to adopt connected vehicle services.
Consumers spend 95% of their time away from the vehicle and, as such, the tech brands and devices they use, the services they subscribe to, and their attitudes toward data sharing and privacy outside of the vehicle are shaping the decisions they make inside the vehicle. As one clear example, among consumers who connect their phone to their car (94%), nearly half of Apple CarPlay (48%) and Android Auto (40%) users say they would not consider a vehicle without this functionality in the future and the majority of others (49% of Apple and 52% of Android users) would prefer to have it.
“By 2030, connected vehicle services revenue will be a $400 billion marketplace, growing from $60 billion in 2020,” said Richard Clarke, vice president with the Automotive & Mobility practice at Escalent. “There is clearly an appetite for in-vehicle connected services and functions for many consumers, resulting in a great opportunity for automotive and tech companies to integrate connected features and functionality into the vehicle. But there is also a risk for OEMs that consumers bring their tech ecosystems into the vehicle via mirroring solutions, such as Apple CarPlay and Android Auto, which could negate and encroach on OEM-provided connected services.”
These findings come from Escalent’s one-of-a-kind Connectivity ForwardTM market research study that identifies consumer views and attitudes toward future connected services, the people who are most likely to buy them, and the connectivity feature themes that resonate the most.
While auto and tech companies are challenged to create and grow new connected vehicle revenue streams, there is an upheaval in consumer desires and expectations as consumers become more tech savvy, especially as it relates to data privacy.
Additionally, the study found consumers have subscriptions in four categories on average (which could have multiple subscriptions within each one), with entertainment and shopping subscriptions nearly ubiquitous. Future connected services that focus on safety, security and vehicle maintenance are most desirable to consumers (81%–84%) and likely to be downloaded at a reasonable subscription cost (85%–88%). However, adoption of post-trial paid connected vehicle services across the industry remains low, with estimates of 10%–20% of trials being converted to ongoing subscriptions.
“We’re inundated with subscriptions in every area of our lives from entertainment to food and beverage and services. Consumers’ subscription fatigue is real, and as we learned from BMW’s heated seat subscription late last year, education is a key component to the success of subscription-based services,” added Clarke. “We’re seeing high levels of consumer interest in different feature themes, which presents a significant opportunity to create value-based solutions for automotive and tech companies alike. It will be critical for these players to clearly articulate both value and rationale as to why connected features should be ongoing subscriptions—including how and why services and features will use ongoing data to perform.”
The key to successfully developing and deploying connected vehicle services and features will be targeting the right customer—those who have the willingness to adapt to connected services and the right persona types. According to Connectivity Forward, one-third of consumers are key targets for connected vehicle solutions. Furthermore, the study identified five key personas: indulgers, cultivators, idlers, disengagers and anxious evaders. Marketing efforts, product innovation and commercial exploration should focus on the growth target personas—and not just on existing buyers.
“Generally, connected services have been an afterthought, with consumers asking, ‘How do I fit technology into my car?’ In the coming years, we will see a shift to ‘How does my vehicle fit into my personal tech ecosystem?’” added Clarke. “This requires a mindset shift focused on meeting consumers where they are. Automakers need to think differently about how consumers will find and integrate new OEM tech and subscriptions into their personal tech ecosystems. Meanwhile, tech players have the opportunity to partner and collaborate with automakers to create value-added vehicle ownership and usage experiences.”
To learn more about the study, visit escalent.co.
Escalent conducted a survey of 4,726 US vehicle owners by online data collection from July 28 to September 18, 2022. The sample was drawn from a variety of panel source partners. To qualify, respondents had to be owners and decision-makers of new or used vehicles and own and use a smartphone. The data were weighted by age, gender and vehicle segment ownership and have a margin of error of +/-1.5 percentage points at a confidence level of 95%. Escalent will supply the exact wording of any survey question upon request.
