In-vehicle commerce: who are the biggest stakeholders?

in-vehicle commerce XevoNext-generation automakers and OEMs are betting big on the opportunity around in-vehicle user experience (IVX). As connected cars advance to the next level of their journey powered by artificial intelligence, a number of new use cases around IVX can be explored. In-vehicle commerce, for example, is one such opportunity awaiting the stakeholders in this segment.

Earlier last year, Juniper Research predicted that the total spend over connected car eCommerce platforms is expected to touch $265 billion by 2023. The increasing interest among automotive OEMs to enable in-vehicle infotainment systems to be accessible to third party developers is one among the reasons for this growth.

Meanwhile, a new report from Strategy Analytics has identified the top trends driving in-vehicle commerce as well as the most popular connected apps for in-car use.  Covering consumers across the U.S., Western Europe and China, the survey has found that finding and paying for parking are top connected services consumers want in the car, particularly in Europe and China.

“With OEMs developing in-vehicle commerce solutions to monetize the connected car, consumer demand for parking info and even demand for the convenience of paying for parking in the vehicle, align with what OEMs are trying to do in this space,” the report says.

The most important connected app use cases for the car remain those which are immediately relevant to the driving task. Apps which alert drivers to blockages, predict upcoming traffic, or help find parking, are in highest demand.

On the contrary, in-vehicle commerce apps that are not directly connected to driving are not well received. Examples include apps that help users place food orders, book tickets or stream media sources.

Chris Schreiner, director, Syndicated Research UXIP, at Strategy Analytics, said, “Despite automakers’ fervent attempts at buy-in for restaurant and quick-food partnerships and surging interest in streaming or customized media and radio, the top in-car app use cases remain a 3-phrase mantra: traffic/satnav, parking and weather.”

Implementing in-vehicle commerce, however, is an uphill task mainly because of the limited use cases that have caught users’ interest as well as the low penetration of connected cars even in developed markets.  Innovations are on the cards as OEMs seek future possibilities in on-board commerce more seriously than ever by engaging in diverse technology partnerships.

Sam Barker of Juniper Research says, “Until the market gains new entrants from outside the automotive ecosystem, the increase in transactions will be driven by convenience for the user, rather than the creation of new services themselves. By 2023, we expect that in-vehicle commerce transactions will be less than 1 percent of mobile and online transactions globally”.

Payment platform providers are among the top beneficiaries of in-vehicle commerce. Visa, in their quest for innovation and business opportunity, has launched in-vehicle commerce for key facilities such as gas, food, parking and toll. The connected car, according to Visa, has the potential to evolve into a commerce engine in the near future.  The company has been associated with auto majors like GM and Honda, as well as major infotainment and in-vehicle app providers.

Car IQ, a provider of in-vehicle payment technology, is developing a payment gateway that will enable vehicles to autonomously connect to a bank’s payment network, validate, and pay for their own services, all without the need to use credit cards inside the vehicle. In recognition to the innovation, the company received $5 million in funding recently.

In view of the developments around in-vehicle commerce, telematics technology providers are now partnering with e-commerce companies to integrate their offerings to connected cars. Xevo, for example, has developed Xevo Market, an analytics-driven app that allows consumers to engage and interact with their favorite merchant brands and services while on the go. According to Xevo, on an average, a user spends around 72 minutes per day inside their car. Leveraging connectivity and Xevo Market’s data analytics capabilities, merchants can turn this time into unique customer engagement opportunities, the company claims.

Most recently, global vehicle manufacturer Fiat Chrysler Automobiles (FCA) launched a new in-vehicle commerce platform in partnership with Xevo enabling users to order and pay for fuel or food, locate and pay for nearby parking, schedule service appointments at FCA dealerships, find the closest stores and petrol stations, and book reservations. The service, Uconnect Market, also allows drivers to obtain money-saving incentives to shop at certain outlets. FCA expects all its vehicles to be connected by 2022.

The Uconnect Market launch follows the recent announcement from FCA of a new in-vehicle “ecosystem” consisting of Harman (Samsung) and Google Technologies.

Brands associated with Uconnect Market platform in the U.S. include Shell, Domino’s, Park Whiz and Yelp Reservations, along with the brand’s aftermarket network Mopar. The new system operates on the Harman Ignite cloud-based platform and is powered by a development of the Google Android operating system.

Around 775 million consumer vehicles are expected to be connected via telematics or by in-vehicle apps by 2023, rising at an average annual growth of 18.7 percent over the next 5 years. This growth also projects rapid expansion to IVX services that will add more value to users and enhance their in-vehicle experience. The future for in-vehicle commerce, in this context, looks highly propitious.

Rajani Baburajan