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Home > Trend: The Future of the Automobile and Automotive Retail

Trend: The Future of the Automobile and Automotive Retail

I had the honor of being a keynote speaker for the recent Canadian Automotive Dealers Association Summit 2013, sharing the agenda with the legendary Bob Lutz, former Vice Chairman of GM, and Steve Rattner (Obama’s “Car Czar” and the main architect of the 2009 North American auto industry restructuring).

Think forward to how quickly technology and automobiles are going to evolve, particularly with autonomous driving technology. Who will win at this race? Google or Ford? Apple or GM?

Think forward to how quickly technology and automobiles are going to evolve, particularly with autonomous driving technology. Who will win at this race? Google or Ford? Apple or GM?

It’s a fascinating time for the auto industry — in many regions of the world, signs of significant recovery abound, sales are up, and happy days are here again!

On the other hand, there’s still the rest of the future to contend with.

And that was the focus on my keynote. There’s certainly a lot that’s happening, and some pretty big changes. For auto dealers, it will be their ability to innovate in the context of these trends that will define their future success.

So what did I concentrate on? I framed my keynote around 4 major trends, which I called:

  • transformation
  • acceleration
  • interaction
  • generations

Let’s take a look.

1. Transformation

The most significant change to the auto industry is already well underway, and is easily summarized by one of the slides from my deck:

AutomotiveInnovation

Quite simply, the pace, control and speed of innovation is shifting from auto companies in Detroit (and elsewhere) to the technology companies of Silicon Valley. This was the focus an article run in an industry publication before my talk, Detroit isn’t keep pace with innovation, says futurist Jim Carroll.

“Shifting customer expectations are driving part of that change as drivers will now expect their vehicles to be as advanced, easy to use and even as “replaceable” as their smartphones and tablet devices that are so central to their lives.

He says dealers need to ensure their staff is ready to adapt to the change. “A car you sell today might be out of date two years from now,” he says. “How do you keep your salesforce and service force up to date with that speed of change?”

“Some people see a trend and see a threat. Real innovative people see the same trend and they see opportunity. That’s what dealers need to ensure they do when they think about this very fast paced future,” says Carroll.

Mobile will also forever change the retail experience and dealers will need to adjust to provide better customer experiences. “I will talk about the changes going on in retail,” says Carroll. “Mobile is the big story.”

He says social media and mobile shopping is having a huge impact on purchasing decisions. “There is a lot of technology that is coming that will link to mobile.” These new technologies will forever change the customer interaction with retailers. “It’s happening very, very quickly,” says Carroll.

In my keynote, I played into this theme. To start out, I asked the audience how many people in the audience used all the features of their new “Smart TV’s.” Very few hands went up.

Why? Because many people are coming to the conclusion that most smart TV’s are actually pretty dumb! What we’ve seen in the last several years, with most so-called smart TV’s, is a situation in which television manufacturers, who have never been really part of the Silicon Valley technology and design culture, suddenly began throwing all kinds of features onto televisions, such as Facebook, Twitter, Netflix.

The result is, if you pardon the expression, a real barf-bag of clumsy screen navigation, confusing remotes, ill-designed apps, and, well, just a bit of a major FAIL.

Smart TV’s? No one uses smart TV’s because they’re dumb. And that seems to be a message that is resonating on the Internet; such as this article recently featured on Wired.

SmartTVSucks

“People aren’t using their internet-connected smart TVs for anything beyond, well, watching TV. It turns out, nobody wants to tweet from their TV. Or read books. Or do whatever it is people do on LinkedIn. Worse, more than 40 percent of the people who buy a connected TV aren’t even using it for its ostensible primary purpose: getting online video onto the biggest screen in your home. “

Contrast the Smart TV experience to the Apple TV. The latter has a crisp design, clean, simple and intuitive interface. Quite simply, it just works.

Now think about the new car that you might own. It’s got a new, cool GPS navigation system. Perhaps an interface to your iPhone. Some entertainment options. And most likely, it’s probably clunky as heck. Slow. Cumbersome to use. Just difficult to navigate. Noted the New York Times in an article in June 2012: “‘See, you spin this knob here, which moves you through these selections up here. Then you press down on the knob to select something, but don’t forget about the other menus under this button…”

And that where we are in the auto industry today: we have a lot of car companies working to try to figure out how to make technology work. And the fact is, in a world in which the future belongs to those who are fast, they are having a difficult time doing so. They don’t get great, clean design. And they have horrifically long development lead times: PCMagazine observed that “a 2012 car could have a system originally designed in 2006 and put into production in 2008 when that model first hit the streets.”

Maybe what is happening is that car companies are making the same mistakes that TV companies made. They’re making a lot of cars with a lot of cool technology that few people will use, because, well, the interface and design sucks!

Contrast any auto company and their dashboard experience to that of Tesla Motors, the “Silicon Valley” car company! This is a technology company that is figuring out how to make cars, a completely different paradigm. And most people would conclude that they’ve nailed the part of in-car design. The reviews of the in-car dash, with it’s crisp 17″ screen, show a passion and delight within the customer base. It’s like the Mac or OS/X design for automobiles!

Tesla isn’t a car company. It’s a tech company, headquartered in a hive of innovation that helped lure the sharp minds who conceptualized the car from an outsider’s perspective……If Tesla is a technology company, the evidence starts with the car’s innovative infotainment system. The 17-inch touch screen controls nearly everything — including navigation, stereo, climate control and driving settings. As clear and touch-sensitive as an Apple iPad, the huge screen can easily accommodate multiple functions at once.
Although Tesla’s future remains uncertain, its Model S delivers on the firm’s grand ambitions, 9 February 2013, Los Angeles Times

Think forward to how quickly technology and automobiles are going to evolve, particularly with autonomous driving technology. Who will win at this race? Google or Ford? Apple or GM?

I think my answer is probably pretty clear!

2. Acceleration

The second trend I spoke too was the fact that the problem above was coming about because the auto industry was now finding itself subject to the dramatic change that is wrought by Silicon Valley when it starts to take over the rate of innovation in an industry. This is a topic I frequently cover — take a look at my post, “Silicon Valley Innovation Set to Dominate Every Industry.”

Consider the auto industry just over 5 to 6 ago:

  • cars were starting to arrive with built-in GPS!
  • a multi-disc CD changer was a REALLY COOL accessory!
  • auto companies were putting “MP3 plugs” into cars!
  • Bill Gates announced Ford Sync at the Detroit Auto Show!

Now consider what could be really big in the auto industry just five years from now; I suggested that the pace of innovation is such that we could see:

  • autonomous vehicles everywhere
  • a SIRI button in every car
  • augmented reality screens with heads up display in most cars
  • glasses-free 3D dashboards
  • interactive in-car billboards (i.e. a store interacts with you via your social network relationship, and alerts you there’s one nearby. You simply say, “take me there!”)
  • open-platforms for extensibility and customization of the in-board dash!

Of course, many people in the room probably sat back and reacted “that’s the dumbest thing I ever heard!” — which I pointed out, observing that this is one of the key attitudes that holds people back from trying to pursue new ideas!

I suspect we are going to see a tremendous amount of technologiical innovation occuring in the automobile space in the next five years, and most people will simply be floored by the velocity of what occurs.

3. Interaction

The third trend I spoke on was the change that would quickly come to automotive dealers, around the theme of the ‘future of retail.’ I’ve done quite a bit in this space; most recnetly, for example, I spoke at a senior leadership meeting with senior executives of The GAP, the global fashion/clothing brand.

There’s a key quote I found that I think summarizes the reality facing us: “The next five years will bring more change to retail than the last 100 years” (from Cyriac Roeding, the CEO of Shopkick, a location- based shopping app available at Macy’s, Target and other top retailers)

There is much happening here — I’ve recently been speaking at a variety of retail conferences — and will summarize that into a different post.

4. Generations

The fourth topic on the list? As automobiles become more technologically advanced, there is an increasing amount of generational discomfort with some dealers, particularly with some who are struggling to deal with all this change!

The UK Birmingham Post, reporting on a Ford dealership training session, noted  that….35% of sales staff had little confidence in their own ability to demonstrate hi-tech in-car equipment such as Bluetooth devices and voice control systems”

That’s a pretty staggering observation if true!  And that is happening in the context in which more young people are visiting the same dealers, and participating in the practive of “showrooming.” In an article from the Dow Jones News Service  Dealers Take Notice as More People Use Phones to Buy Cars9 February 2013,, it was said that 

  • “...more than a third used their mobile phone to help research pricing and other factors while on dealer lots. That’s compared to 19% for other age categories.”

And so clearly, we have a really unique generational dynamic happening in auto-showrooms!

—–

Put it all together, and it is clear that the automotive industry, and the dealers who support it, are in a particularly unique period of time that involves a lot of change, transition and tranformation!

 

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