Which technologies do consumers want most?

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New research yields some interesting findings about buying habits. Dealers would be wise to take heed.

There is a lot of hype in the media these days about emerging automotive technology.

The subject that seems to be getting most attention is autonomous or self-driving cars and there are very different opinions on the desirability, viability and safety concerns with
these vehicles.

While widespread presence of these vehicles is still a way off, I believe that autonomous vehicles will be on our streets sooner than we expect. As with many other technology advances, we’ll likely see a tipping point fairly early in the next decade.

These tipping points are usually brought about when the technology, infrastructure and regulatory environment come together and when there are “champions,” be they individuals, corporations or government agencies.

In the meantime, we’ve lost focus on some of the technologies that are very much part of self-driving vehicles and that are already quite widely available on the vehicles we buy today.

This has happened rapidly over just the past few years and is a signal of how quickly things could change in the next few years.  Not much more than five years ago, standard rear-view cameras were the domain of luxury vehicles.

Technologies such as collision avoidance, lane departure warning and blind-spot monitoring systems were the same — very few vehicles, even at the high end, had them as standard equipment. Now, they’re common in high-end vehicles and also available in many vehicles under $30K.

The technology differentiation

Differentiation based on quality will begin to shift to differentiation based on technology.

In the early 2000s, differences in vehicle quality (both new and older vehicles) were common and car buyers could differentiate and base decisions on reported and perceived quality.

In recent years, that gap has almost disappeared and now the race is on to offer buyers the latest in technology. But what do buyers want and what differentiates one vehicle from another most effectively?

The Nielsen Company has been conducting their AutoTECHCAST study in the U.S. for a number of years. In 2016, the study included about 12,000 US consumers who intended to buy or lease a new vehicle within the next three years. Forty-four new technologies were included in the study, which gauged consumer awareness each, how strong each is in terms of desirability and how effectively each one might be in driving differentiation — causing a buyer to choose one vehicle over another without that technology.

The first thing that jumps out is that consumers are not nearly as tuned in to new technologies as we are. Nielsen says that: “many Americans are actually in the dark about many of the advancements now available in new automobiles.” It’s likely that Canadians are the same.

When it comes to the key factors that influence a purchase decision, Nielsen found that the traditional ones still rise to the top: price at 39%; reliability and dependability at 29%; and fuel efficiency at 28%. advanced technology comes in at 24%. While that is still relatively low, it moved up from 21% in 2015. Not surprisingly, fuel efficiency dropped in 2016 probably because of lower fuel prices in the past two years.

Does this mean that advanced technologies are not important to buyers?

I would argue definitely not. The other side of the equation is how buyers choose between one vehicle and another, given that they likely shop within a defined price band and that quality is no longer a major differentiator.

We know that most buyers have done their research and are likely down to two or possibly three top choices. Of the 44 different technologies included, three stood out as most desirable as illustrated in the chart below:

In general, Nielsen notes: “Despite the growing allure of topics like connectivity and autonomous cars, consumers are most interested in technology geared toward safety.”

As awareness of advanced technologies grows and the benefits become clearer, these will become stronger differentiators, which will push buyers in one direction or another. This chart shows some of the top differentiating technologies Nielsen found:

The bottom line is that, while the hype is around autonomous vehicles, the reality on the sales floor today needs to take into account the fact that consumers are still catching up with the technologies on new vehicles.

In some cases, buyers will be completely “sold” on certain technologies, but many will not even be aware of them, let alone their importance and value.

Dealerships would make a mistake if they assumed that potential buyers knew all about the technology features on the vehicle and how to use them.

In many cases, there could be a missed opportunity to differentiate from a competitive vehicle. Also, if the customer is not familiar with the feature and doesn’t know how to use it effectively, the value is lost.

On the question of who “owns” automotive technology?  It depends on who you ask.

In another interesting study done by Nielsen, the company explored attitudes of young (really young!) Americans with regard to self-driving cars.

These are truly the consumers of the future and the ones who will experience fully the technologies that are just emerging today. They will likely be the “drivers” of autonomous cars and the ones who will make purchasing and servicing decisions.

In both areas, there will be profound changes, based on how fast the technology advances.  The study, the Nielsen Youth Viewpoint on Self-Driving Cars, was conducted in 2015 and covered three youth groups in its sample of 1,133 youths aged 8–18.

Apart from the questions about what they want from technology and what hopes and concerns they have, the most fascinating question to me revolved around their interest in these vehicles if made and sold by traditional manufacturers vs. technology companies. As you can see from the table above these future car buyers are at best ambivalent about who makes their vehicles.

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