Innovation Trends

in the Consumer Behaviour

Focus in Automotive Services

Sonia D’Arcangelo

Innovation Observatory Office

Research and Acceleration of Innovation Department

SEPTEMBER 2017

FOR INTERNAL AND EXTERNAL USE

CONSUMER TRENDSAUTOMOTIVE

SERVICES INNOVATIONS

NO DEMOGRAPH

CONSUMERISM

▪ It’s the death of demographic

segmentation (no more age,

gender, income, family status

and more) to predict consumer

behavior

▪ People of all ages are shaking off

demographic ‘conventions’ and

constructing lifestyles and

identities more freely than ever

before.

▪ New attitudes, new

expectations and new freedom

are coming up.

CONSUMER TRENDS It’s the rise of the empowered consumer!

Social media and technology has given birth to the empowered

customer.

NO DEMOGRAPH

CONSUMERISM

▪ By 2020, 40% of new

car buyers will be

millennials, of which

88% use the internet to

research car purchase.

▪ Automotive brands need

to be building a strong,

credible presence

online to connect with

the next generation of

buyers.

CONSUMER TRENDS ALL-ON AUTHENTICITY

The search for authentic travel isn’t new, but in an age of Millennials

and of democratized travel and social sharing, it’s becoming more

complex.

Source: Internet

▪ Healthy living is becoming a

status symbol, as more

consumers opt to flaunt their

passion for wellness.

▪ Consumers have many tools

and apps to promote

ultimate wellbeing in every

area of their lives, from

mindfulness apps and

mood sensors, to

personalised nutrition and

fitness wearables also to

monitor happiness. This is

true also in the automotive

sector.

WELLNESS AND

MINDFULNESS LIFE

CONSUMER TRENDS

▪ New type of connectivity inside auto also provides analytics that

insurers can use to better assess risk and create more individualized

insurance plans for businesses on the basis of driver safety records

compiled from this information.

Source: Internet

WELLNESS AND

MINDFULNESS LIFE

CONSUMER TRENDS

▪ Tech features on vehicles

tied to biometrics can also

help with security, in terms

of components that enable a

car to drive only when it

recognizes a certain voice.

▪ Eye tracking is another

possibility to help with

monitor driving and sense

whether a driver might be

tired or distracted,

enhancing the safety of

driving for those behind the

wheel and those around

them.

▪ Rising numbers of consumers

are increasingly aware of the

negative impacts their consumption

has on the planet, society or

themselves.

▪ Consumers struggle to reconcile

their consumerist impulses with

their desire to feel ‘good’.

▪ That’s why the only truly

sustainable, long-term competitive

advantage will be businesses that

lessen – or eradicate entirely –

those negative impacts whilst

allowing continued indulgence.

CIRCULAR and

SUSTAINABLE

CONSUMERISM

Brands that deliver solutions that benefit people, planet and society

will unlock truly sustainable profits. We are entered the Experience

Economy

CONSUMER TRENDS

▪ Always-online consumers

know (or can easily find out)

about the negative impacts of

their lifestyles.

▪ However, consumers’ choices

– particularly when it comes

to selecting which car

they’ll drive – are limited by

their budgets and by

availability. Drivers will flock to

brands that make

sustainable cars, an

accessible (and affordable!)

option for them.

CONSUMER TRENDS

CIRCULAR and

SUSTAINABLE

CONSUMERISM

Many of today’s

consumers are treating

mobility in the strictest

sense of the word –

they just want to get

from one place to

another however they

can, whenever they

need to. With car

ownership no longer

being the status

symbol it once was,

ridesharing is on the

rise

▪ The automotive industry has

learned quickly that they must

meet consumer demands for

a digitally enhanced

experience when they are

researching, purchasing and

operating a car.

▪ Today, consumers are

researching a car online before

even stepping foot in a

dealership. Thanks to websites

like TrueCar and Edmunds, all

pertinent buying information is

available in a second and at the

click of a button.

TRAINING/ CONTENT

REVOLUTION

CONSUMER TRENDS

Software and manufacturer updates to vehicles, smart sensors to help

with in-vehicle emergencies, and driver safety monitoring to improve

training programs for fleets: the possibilities within this connected

environment are seemingly endless.TRAINING/ CONTENT

REVOLUTION

CONSUMER TRENDS

▪ Vehicles have become

increasingly sophisticated

under those plush seats and

high-performance engines.

▪ Onboard technology has

turned them into

computers on wheels.

New platforms like

telematics, which gives fleet

vehicles information about

vehicle and driver

performance, became the

next stage, followed by

autonomous cars.

▪ It’s an age of human

empowerment. It’s designing

technology and services about us

that conforms itself to people.

▪ We aren’t just incorporating

technology into our lives; as it

becomes exponentially more

sophisticated, we are embedding

humanity into the technology

itself.

▪ Consumers look to AI to serve

basic human needs.

AI / ROBOT WAVING

Unique users of digital virtual assistants are set to rise

from 390 million in 2015 to 1.8 billion worldwide by 2021

CONSUMER TRENDS

Source: Tractica

▪ The most common automotive

application for AI is

autonomous vehicles.

▪ AI is being put to work to help

learn human behavior and

understand how to react to

driving conditions like a person

would. This includes sensing

how those in other cars will

behave and how to face weather

conditions, road issues, and

other factors that must be

understood before driverless

vehicles take over the roads.

AI / ROBOT WAVING

CONSUMER TRENDS

AI / ROBOT WAVING

CONSUMER TRENDS

▪ For consumers, AI-fueled

connectivity can provide

localized information related

to everything from gas

stations to restaurants to

shopping.

▪ Payment solutions are even

being explored as an

integrated feature so

refueling, tolls, and on-

demand orders can be

executed with ease.

▪ In 2017, consumers are impatient.

The digital world has schooled

more of them into becoming so-

called “IWWIWWIWI” — “I want

what I want when I want it” —

consumers, impulsive and in

pursuit of immediate gratification.

▪ They want services yesterday and

real-time virtual dialogue with their

brands.

▪ With constant mobile

connectivity, consumers can

(and do) connect with friends and

strangers at almost any moment.

FAST SHOPPING/

OMNICHANNEL

MARKETING

CONSUMER TRENDS

▪ The ongoing digital transformation

of the automotive industry introduces

a new set of technological and

regulatory challenges automakers

must address in order to implement

an innovative and flexible digital

strategy.

▪ Consumers are researching a car

online before even stepping foot in a

dealership. Thanks to websites like

TrueCar and Edmunds, all pertinent

buying information is available in a

second and at the click of a button.

Source: Centric Digital

FAST SHOPPING/

OMNICHANNEL

MARKETING

CONSUMER TRENDS Digital Sources In The Car Buying Process

▪ Social media enables

anyone to peruse personal

experiences and unbiased

opinions about vehicles,

dealerships and financing

options.

▪ Recent polling by

Crowdtap found that 87%

of respondents say they

consider friends’ comments

on social media when

evaluating an

automotive brand.

FAST SHOPPING/

OMNICHANNEL

MARKETING

CONSUMER TRENDS This shift is being driven by a consumer base increasingly immersed in

digital environments. 63% of car shoppers compare vehicles on mobile

devices and 75% of car shoppers would consider buying entirely online.

Source: Centric Digital

HYPER

PERSONALIZATION

▪ A widespread need for

extreme customization is

leading new consumption

attitudes.

▪ The Hyper-Personalization

trend refers to the flourishing

of products and services

that can be fully

personalized by the user in

terms of features, options,

colors and design while the

final setup or production takes

place elsewhere.

Source: Trendwatching

More accessible brands also entered the customization trend and

provide the unique possibility to create «MY PRODUCT»

CONSUMER TRENDS

HYPER

PERSONALIZATION

▪ Digital showrooms that

utilize tablets, video walls

and tabletop touchscreen

surfaces to augment the

physical shopping

experience are becoming

more common. Shoppers

can virtually explore car

models and evaluate

options, then immediately

take preferred models for a

test drive or complete a

purchase on-site.

Source: Centric Digital

Audi developed a digital showroom that lets visitors

configure a life-sized virtual vehicle using real-time 3-D

rendering technology.

CONSUMER TRENDS

AUTOMOTIVE

SERVICES INNOVATIONS

CONSUMER TRENDS

LANDROVER

Waste to Waves

Project

Land Rover has launched a surfboard made from the plastic foam of

early vehicle models as part of the “Waste to Waves” project. Created in

partnership with SkunkWorks Surf Co and tested by the English

Women's Open Surfing Champion surfer Lucy Campbell, the project

forms part of Jaguar Land Rover’s wider “second life” initiative to

support their zero waste strategy.

CIRCULAR and

SUSTAINABLE

CONSUMERISM

Source: media.landrover.com

CHARGIE

Bookable Home

Charging

Community for

EVs

Chargie is a UK initiative aimed at enabling owners of electric vehicles to

offer their private charging points to other EV owners. It asks people to

use their own common sense to set a flat fee for the service, and a small

percentage is then added by the company. Participants add their location

to an online map and booking requests are then made through the platform.

CIRCULAR and

SUSTAINABLE

CONSUMERISM

Source: premium.trendwatching.com

FORD &

JOSE CUERVO

How Make Car

Parts From Agave

Ford Motor Company and Jose Cuervo are exploring the use of agave plants to

develop a sustainable bioplastic material to incorporate in vehicles, giving the

agave fiber byproduct a second chance at usefulness. Researchers are testing

the material’s durability and heat resistance for potential use in vehicle interior and

exterior components. The new material could alleviate the use of petrochemicals,

decreasing the overall impact of vehicles on the environment.

CIRCULAR and

SUSTAINABLE

CONSUMERISM

Source: media.ford.com

Source: globenewswire.com

Affordability and high operational and maintenance costs dissuade many

consumers from owning a vehicle, making car sharing programs an attractive

alternative. ZipCar, a pay-by-the-hour car-rental firm that maintains its own fleet

of vehicles, led a $14m investment in Wheelz, a P2P car sharing platform, in

2012. ZipCar was in turn acquired by Avis, a conventional car-rental firm, in

January 2013 for $491m, giving Avis a stake in Wheelz. In February 2017, Avis

Budget Group signed an agreement with Uber to supply Uber’s driver partners

with cars through Zipcar.

AVIS & UBER

Access-Based

Consumption

NO DEMOGRAPH

CONSUMERISM

Source: trendwatching.com

Consumption patterns are no longer defined by traditional demographic

segments such as age, gender, location, income, family status and more. August

2014 saw Rolls-Royce make its debut in Xbox One racing videogame Forza

Motorsport 5, the first time the British automotive brand has made an

appearance in the gaming world.

ROLLS-ROYCE

Debut in Racing

Video Game

NO DEMOGRAPH

CONSUMERISM

Source: blogs.nvidia.com

NVIDIA & BOSCH

AI for

Autonomous

Driving

AI / ROBOT WAVING

At the Bosch Connected World 2017, NVIDIA’s CEO announced that NVIDIA will

provide technology enabling Level-4 autonomous driving capabilities – where a

car can drive on its own, without human intervention – by the end of 2018. The

collaboration with Bosch represents the first announced DRIVE PX platform

incorporating NVIDIA’s forthcoming Xavier technology. Xavier can process up to 30

trillion deep learning operations a second while drawing just 30 watts of power.

Source: mobileye.com

Mobileye – a leading supplier of software that enables Advanced Driver Assist

Systems (ADAS) – achieved a partnership to develop fully autonomous

vehicles with BMW and Intel, with production launch planned for 2021.

The Mobileye mono-camera was inspired by human vision, which only uses

both eyes to obtain depth perception for very short distances.

Driving-scene interpretation is in fact based on much longer distances.

MOBILEYE

Advanced Driver

Assistance

Systems

AI / ROBOT WAVING

Source: theverge.com

Amazon and BMW have partnered to bring virtual assistant Alexa

to BMW and Mini vehicles in mid-2018. Alexa will provide

directions, perform voice calls, play music, and control their

smart home, all via voice commands from supported cars. So

drivers will be able to drive and talk to Alexa, getting answers in

spoken form from the assistant. Alexa will also deliver graphics like

weather into the head unit display in the car.

BMW & AMAZON

Virtual Assistant

AI / ROBOT WAVING

Source: faurecia.com

Through sensors, Active Wellness 2.0 by Faurecia collects and analyzes

biological data and remembers the driver’s behaviors and preferences,

allowing it to predict how the driver will be most comfortable based on his

physical condition, time of day, traveling conditions and whether in

semi-autonomous or autonomous mode. Then the seat system applies

countermeasures pertaining to detected motion sickness, stress,

discomfort, drowsiness, and readiness to operate controls.

FAURECIA

Active Wellness 2.0

Seat

WELLNESS AND

MINDFULNESS LIFE

Source: volvocars.com

With the release of the all-new XC90, Volvo Cars introduced a new

concept of luxury focused on well-being. The front seats are

available with a massage function in the backrest, and ventilation

and heating functions in the seat cushions. The Interior Air Quality

System has a sensor that measures the quality of the air coming into

the car and activates the recirculation system if harmful substances

are detected.

VOLVO

Destination

Well-Being

WELLNESS AND

MINDFULNESS LIFE

Source: italdesign.it

GEA

Italdesign &

Technogym

WELLNESS AND

MINDFULNESS LIFE

Gea is Italdesign’s vision for luxury mobility in 2025. The Wellness Mode,

developed in conjunction with Technogym, is ideal during long journeys because it

allows the passenger to perform isometric exercises, which are ideal to warm up

the muscles. In the Dream Mode the LEDs project a relaxing blue light, the

windows darken and relaxing pictures of galaxies and starry skies appear on the

monitors and on the front dashboard.

Source: landroverindianapolis.com

Jaguar Land Rover partnered with Lisnr, a startup that developed a new

communication protocol called Smart Tones to transmit data using inaudible

high-frequency sound waves. Thanks to Smart Tones, a Jaguar Land Rover

could communicate with other cars or devices using the same tech. A car could

adjust vehicle settings to individual user preferences: change radio

favorites, or adjust the seat, or climate control.

JAGUAR

LAND ROVER

& LISNR

Smart Tones to

Control Cars

HYPER

PERSONALIZATION

WELLNESS AND

MINDFULNESS LIFE

Source: www.pzworldla.com

PIRELLI

Innovative Retail

Tire Concept Store

HYPER

PERSONALIZATION

After the opening of the first Pirelli PZero World in Los Angeles, in September

2017 Pirelli has opened the first innovative showroom and concept store in

Munich. It is a key pillar of of Pirelli’s “Perfect Fit” strategy when it comes to

distribution. Through such centers, Pirelli offers customers a combination of

high quality products and personalized services including retail and

installation of aftermarket wheels, performance modifications, and cosmetic

modification.

Source: news.harman.com

HARMAN’s LIVS (Life-Enhancing Intelligent Vehicle Solution) debuted in Oasis,

the newest Rinspeed concept car, at CES 2017. Oasis offers portable

personalization, in particular the complete Microsoft Office suite, voice-controlled

virtual assistant, 3D maps and connected services (social media integration, car

sharing, weather, parking and reservations). Oasis allows users to transfer their

preferences from home to car too.

HARMAN

Life-Enhancing

Intelligent Vehicle

Solution & Oasis

concept vehicle

HYPER

PERSONALIZATION

Source: factordaily.com

Ola is an Indian mobile application for cabs booking that launched Ola Play, a

new premium service that allows advance car controls, choice of personalized

content during the ride and a fully connected interactive experience. Through

proprietary in-car and cloud technologies, the cab will come with in-car

entertainment systems in the form of large screens fitted at the back of the car,

where passengers sit. Once the user is connected, he will be able to control the

movies, videos and music, all through it.

OLA

In-Car

Entertainment

TRAINING/ CONTENT

REVOLUTION

HYPER

PERSONALIZATION

Source: alizila.com

In 2016, the e-commerce giant Alibaba presented at the Beijing

Motor Show its first Internet-connected car. This car can recognize

individuals based on their smartphone, automatically adjusting

music, climate control, and location recommendations based on

their preferences, even when GPS and Wi-Fi aren’t available. The

car integrates also Alipay - Alibaba’s own mobile payments system -

allowing drivers to pay for fuel, parking spaces, or even coffee.

ALIBABA

First Internet-Car

TRAINING/ CONTENT

REVOLUTION

HYPER

PERSONALIZATION

Source: fordpass.com

Ford launched FordPass, a new mobile application which enables

consumers to find, reserve and pay for parking and schedule

repairs and servicing. For the cars equipped with “SYNC

Connect” it’s possible to unlock and start the vehicle or check the fuel

level with just a tap on the smartphone. Moreover, it’s possible to

schedule the vehicle to start automatically.

FORD

One-Stop

Mobility App

TRAINING/ CONTENT

REVOLUTION

Source: La Stampa, alizila.com

In 2016 alone, over 30 vehicle brands launched new model sales on

Alibaba marketplaces, selling about 100,000 cars. In 2017, FCA set

a strategic partnership with Alibaba’s “Tmall” to market and sell its

cars online in China. In particular, Alfa Romeo (a FCA brand) sold out

all of the 350 Giulia Milano car models that it offered on Tmall in 33

seconds.

FCA & ALIBABA

Online Car Sale

FAST SHOPPING/

OMNICHANNEL

MARKETING

Source: Businessinsider

Accenture has developed for BMW an Android mobile app that

allows potential buyers to view and interact with a virtual car as if

they were standing in front of it. The app provides the AR version of

hybrid and electric luxury car BMWi. The smartphones – equipped

with Google's Tango technology – produce a life-size 3D image of

the vehicle overlaid on the environment visible through the camera.

BMW,

GOOGLE &

ACCENTURE

Augmented Reality

for Virtual Car

Showrooms

FAST SHOPPING/

OMNICHANNEL

MARKETING

Data & information have

been collected from: