FUTURE OF... Mobility [Episode 1]
Reimagining the car & its evolving meanings
Futuristic thinking is a key focus of Cultural Faultlines newsletter, and I'm excited to kick off the "Future Of" series by delving into a topic that has long captured my interest—mobility. Unintentionally coinciding with Elon's Cybertruck’s launch this week, a topic worthy of its own dedicated blog as part of “future of mobility” discussions. This current piece focuses on reimagining cars in the future of mobility from a consumer culture lens, with more deep dives in the category and specific brands to come in future blogs.
My interest in the automotive category goes way back. Initially sparked by the extensive use of transmedia storytelling strategies by the automotive brands, my exploration began in 2013 with a blog titled "Transmedia Brands: Are Automobiles the Pioneer of Transmedia Storytelling in Consumer Products?" Here, I delved into how automotive brands employed transmedia storytelling principles, demonstrating the application of these strategies beyond entertainment brands. [Case Study: Audi Heist in the video below]
Teaching the HBS case on "Plugging In the Consumer: The Adoption of Electrically Powered Vehicles in the U.S." around 2016 further stoked my curiosity. This case led me to ponder how U.S. consumers would respond to the emergence of alternative-fuel vehicles, such as electric cars, in the coming decade. I highly recommend this case to fellow business professors to assess the barriers to consumers’ adoption of EVs and other non-ICE alternatives. Additionally, some ideas in this blog stem from a POV I wrote in 2019 for a conference panel. With a background as a Mechanical Engineer, I've always been fascinated by these machines—capable of both assembling and disassembling an internal combustion engine, at least in my former life 😎. In essence, as a generalist, I've maintained a lasting affinity and affection for the automotive category…although I don’t own a car 😇
Audi Heist is one of the early transmedia storytelling campaigns in a non-entertainment category. Audi launched the Audi Heist campaign in 2006. The campaign started with a viral video showing Audi 3 getting stolen from the dealership a night before the car was supposed to make its first appearance in one of the biggest auto shows in America. Participants got involved in the mission to find the stolen car by following bits and pieces of the puzzle in various mediums like ARG (Alternate Reality Game), Yellow Pages, flyers, across the Net, newspapers, and magazines. Producers’ attention to detail and authenticity in this campaign showed the importance of coordination in TM branding campaigns.
As a cultural strategist, my interest lies in understanding how consumer culture shapes and is shaped by innovations and technological leaps in this category.
The future of mobility discussions hinge on the intricate interplay of technology, consumer behavior, and iconic brands with hefty marketing budgets. The intricacies of the future of mobility are all shaped by these three domains. The complexity and evolution of this landscape demand a critical perspective. While discussions predominantly orbit around product innovations like electric vehicles (EVs), autonomous vehicles (AVs), batteries, and emerging technologies (e.g., like hydrogen fuel cells, flying cars, and advanced materials), there's a significant gap when it comes to assessing the impact of consumer behavior and culture.
As a cultural strategist, my interest lies in understanding how consumer behavior and culture shape and are shaped by innovations and technological leaps in this category. It is not just about the product innovation. It's majorly about whether consumers are ready to overhaul their routines, habits, and perceived meanings related to transportation and adopt new ones. It is about how the meanings of cars are changing in consumers’ worlds. Contrary to the illusion that consumer behavior could be altered easily, many unanswered questions and failures in this domain revolve around enduring habits and cultural aspects tied to the entrenched meanings of these machines in people's lives.
In this post, I aim to provide a critical perspective to contemplate some new & reimagined meanings of cars for consumers that would shape their behavior in the future of mobility.
In this post, my goal is to offer a critical perspective on emerging meanings of cars that will influence consumer behavior in the future of mobility. The car has transcended its traditional role as a mere mode of transportation; it has evolved into something much more profound. For each suggested interpretation outlined in this post, a brief "So what?" section accompanies it, highlighting concise strategic implications. Here are some new meanings of cars to consider when contemplating the future consumer behavior and culture within mobility discussions:
Car as a Space
Car in Tech Convergence
Car as an Agentic System
Car as Software
Car as DTC Product
CAR AS SPACE
THE MEANINGS OF CAR AS A SPACE ARE CHANGING.
Car, the new third space?
The 2018 IKEA Life At Home report notes a global sense of feeling less "at home" than ever before. And, as home loses its “homeliness” for people, some Americans are seeking privacy or comfort in their cars. Reportedly, 45% of Americans retreat to their cars for private moments, a number even higher for those living with friends or strangers. The car is no longer just a means of transportation; it has evolved into a second or third space, embodying and extending the meanings of home—privacy, comfort, security, and belonging. Sarah from London, featured in the report, articulates the value of these extended home spaces as:
“The extended home adds the seasoning and spice you cant get at home. Using the extended home imaginatively helps you get the home you want and need, no matter what your home is”
The pandemic and corresponding isolation have further changed the meanings of spaces, including those of the car. Early in the pandemic, I hosted webinars discussing the evolving meanings of home, cars, and other spaces during the period of social isolation. From socializing on balconies to workouts in basements, tennis games on roofs, and curbside pickups for in-car deliveries. The car, as a result of the pandemic, has become a safe and clean place with new meanings and also started to host new marketplace performances like curb-side pickups and trunk delivery etc. Additionally, the continued practice of working from home has (1) shifted the role of cars in our daily routines, divorcing them from their established roles in daily office commutes; and, (2) eliminated or limited the other meaningful spaces such as offices in our lives.
In summary, the meaning of the car as a space is evolving due to shifting meanings of home and the enduring dynamics of working from home, which have excluded cars from our daily practices.
SO WHAT? If the car is considered a third or extended space that stretches, complements, or sometimes substitutes the meanings of home, people will expect the same privacy, security, comfort, belonging, and enjoyment from their cars as they do from their homes. This expectation will be more pronounced as people lose other prominent spaces in their lives like the offices. Automakers and user experience designers need to take these expectations into consideration to create resonant brand and consumer experiences about and around the car.
Car, the entertainment space?
Car is also transforming into an entertainment and lifestyle space as some prominent technologies mature. Rapid advancements, especially in AI and 5G+, are paving the way for widespread adoption of autonomous cars, ushering in an era of hands-free driving. Brands like Tesla, Audi, BMW, Ford, and Mercedes are integrating autonomous features into their models, opening up new possibilities. Capitalizing on that, several brands, like Disney, are trying to find solutions to monetize the free-time and free-d up hands the drivers would have while in the self-driving cars. Disney is collaborating with Audi to develop a VR headset and virtual entertainment to entertain the passengers of Uber riders now and self-driving car passengers in the future. The global metaverse market for automotive was valued at $1.9 billion in 2022 and is expected to reach $16.5 billion by 2030, at a CAGR of 31.4%. [Video Below: Audi “holoride” VR experience]
“We believe that the automobile presents an amazing future opportunity to deliver a unique experience for backseat passengers that enhances our storytelling and takes advantage of what’s great about being a moving vehicle,” Mike Goslin, Former Disney VP of Experiences
This evolving content and entertainment landscape is poised to redefine the connected in-car experience, shaping the future of mobility. The transformation of the car into an entertainment and lifestyle hub will ripple across design, product, and retail decisions in the category, prompting significant shifts in user experience, product launches, showrooms, test drives, and more.
SO WHAT? Consumer experiences & expectations are shaped by their experiences and interactions across various categories. The market is connected. Consumers will also anticipate cohesive, interactive, and contextual experiences from the automative brand and also from their user designs. Automotive brands must reimagine the future of in-car experiences, user interfaces, launches, showrooms, and test drives, recognizing the car's new role as an entertainment space. Moreover, the car's evolution into an entertainment hub provides brands with opportunities for strategic, contextual, and interactive storytelling. #strategicstorytelling
CAR IN TECH CONVERGENCE
CAR IS BECOMING PART OF AN INTERDEPENDENT TECHNOLOGY SYSTEM.
Car, a technological hub?
The future of autonomous vehicles relies on the seamless maturation and convergence of multiple technologies. A self-driving car's autonomy hinges on real-time communication (i.e., with no lag) with the signaling system, the other cars, pedestrians, mobile technologies (e.g., smart watch, smart phone), and all the sensor & bot data. Key players in this interconnected system include 5G and AI, facilitating rapid data transfer for instant processing and decision-making. All this data and information converges on the self-driving car so that it can be autonomous. As a result, car becomes the hub of technological convergence. The convergence of 5G, AI, IoT, signaling, smart city, and mobile technologies designates the car as the central hub of technological integration.
Car, a meshed reality?
5G is the innovation we have been anticipating for the last 20+ years. 5G will unlock & unleash the true potential of the existing machines/products (e.g., VR/ARs, autonomous cars, ioT) & create a new ecosystem of reality - what I term "meshed realities" (that’s a concept I created in 2019). In the 5G era, consumer experiences will blend augmented, virtual, and physical storyworlds, incorporating human and non-human agents. This meshed reality is manifesting in cars, with startups like WayRay projecting augmented reality data onto windshields, providing layered and contextual information to drivers.
Car, part of an ecosystem of mobility?
The growth of connected and, ultimately, autonomous vehicles will foster the emergence of a new ecosystem of mobility , offering safer, cheaper, eco-friendly, efficient, and personalized transportation. In smart cities, MaaS integrates transportation options into a digital platform, promoting sustainable transport and digital transformation. It regulates diverse mobility options through a single application, streamlining ticketing and payment operations. In smart cities, MaaS prioritizes tech convergence for efficient and cost-effective mobility.
Cars become just one mobility option, with access to bike, scooter, car sharing, short-term leases, public transport, or a combination. Automakers (OEMs) adapt, introducing new business models like Tesla's flat monthly fee leases or Hyundai's subscription plans. A recent study suggests that forecasts that more than 16 million new and used cars globally will be driven on a subscription basis by 2025.
SO WHAT? The success of autonomous cars, representing the future of mobility, relies on the rapid development of supporting technologies. Attaining full autonomy necessitates adopting a systems approach, comprehending the convergence of various technologies shaping the car's capabilities. The car's future performance is intricately tied to these larger systems, forming a technological product. Future car designs should embrace a systems approach to identify performance enablers and barriers. Leveraging this interdependence is crucial for features like real-time navigation, over-the-air software updates, and enhanced safety through vehicle-to-everything (V2X) communication.
However, 5G isn't a one-size-fits-all solution. It is most viable in densely populated cities due to substantial infrastructure investments If every city will not be a 5G city, it means that every city will not be a smart city. If every city will not be not a smart city, then every city will not be a self-driving city. These differences will influence the segmentation of autonomous cars and spark equity discussions regarding the digital divide and access, shaping regional, national, and global market-making efforts. Beyond sustainability, MaaS will also alter emerging business models for automakers and dealerships, favoring subscription over ownership.
CAR AS AN AGENTIC SYSTEM
CAR IS NOT THE ONLY SMART PRODUCT IN THE ECOSYSTEM OF MOBILITY.
Car, a smart system?
As discussed earlier, cars are becoming more autonomous and intelligent through connections with technologies like smart cities and signaling systems. On the other hand, they are also transforming into smart systems themselves with smart tires, smart mirrors, smart brakes etc. Tires, crucial for interfacing with other systems like roads and signals, have seen innovations since 2016. Goodyear's SightLine, a tire intelligence technology, uses sensors to detect and address issues in real-time, providing anticipatory and actionable intelligence. As car components become smarter and more connected, cars gain agency—the power to act.
Car, as a separate IOT system?
Most major tech ecosystems are built around the home, establishing the home as a smarter IoT system. The next evolution in cocooning and platformization targets cars, aiming to establish an ecosystem within and around them. Early signs indicate that cars will serve as distinct hubs for smart technology, no longer just extensions of smart home systems. In March 2021, SpaceX filed an application with the Federal Communications Commission (FCC) requesting to beam its STARLINK internet to vehicles, not just homes. Spotify has launched its Spotify-only, voice-controlled device for the car, Car Thing to limited users in the US to control the music consumption experience in the car. This also allows Spotify to be close to the consumer data rather than being veiled by another ecosystem like Tesla, Apple or Amazon.
SO WHAT? Cars gain increasing agency in the smart mobility ecosystem, shaping decisions and raising ethical questions. The Trolley problem reflects not just ethical dilemmas but the agentic nature of cars in autonomous driving. As we witness more agentic cars, clashes within the ecosystem emerge—who decides, and whose decision prevails? The struggle for control will unfold in this evolving landscape. The stakeholders in the category need to assess these agentic evolution - and possible expected clashes - among cars, with the consumers, and across the system level. Systems level approach is essential in understanding the increasing capability of the cars to make decisions as an agent.
CAR AS A SOFTWARE
THE CAR IS NO LONGER JUST HARDWARE.
In a previous section, we explored how cars serve as a hub for various converging technologies. Now, let's delve into a paradigm shift—an ecosystem-level transformation where consumers and Auto OEMs (Original Equipment Manufacturers) perceive cars not merely as hardware but also as software, often referred to as "computers on wheels." Auto OEMs, traditionally focused on hardware manufacturing and sales, are now confronted with this new reality, and the automotive software and electronics market is projected to surpass $660 billion by 2030, underlining the urgency for industry-wide reassessment.
Considering the car as software entails layers like the smart mobility ecosystem, applications, data platforms, and software platforms. However, OEMs have yet to develop software at this scale, necessitating a comprehensive shift in their approach. This involves reimagining design, production, talent acquisition, service models, and monetization strategies. Capitalizing on mobility features and consumer-facing applications, such as subscription-based advanced driver assistance systems, presents a significant revenue opportunity. To thrive, OEMs must borrow practices from the tech and telecom sectors, focusing on delivering digital services, utilizing upselling and cross-selling techniques, and prioritizing continuous consumer-facing software updates through high-performance computing platforms.
SO WHAT? OEMs are in a talent competition with other sectors, prompting the adoption of a customer-centric mindset beyond physical vehicle production. With technology's widespread integration, recruiting individuals with software backgrounds becomes imperative. Additionally, safeguarding customer data, avoiding cyberattacks, and addressing data privacy expectations, along with potential digital divide issues, are critical considerations. The consumer experience in connected cars and the establishment of car-anchored ecosystems raise questions about technology preferences and potential conflicts between different ecosystems in cars and homes. Embracing the shift to "car as software" demands a collaborative competition approach, urging OEMs to form strategic partnerships, even with rivals. In this evolving ecosystem, collaboration emerges as a key competitive strategy for navigating the complexities of the future.
CAR AS DTC PRODUCT
THE CAR SALES MODEL IS SHIFTING.
The traditional landscape of new-car sales, predominantly governed by dealerships acting as intermediaries, is undergoing a significant transformation. Over the past decade, the automotive industry has witnessed a disintermediation trend, mirroring the broader business environment where companies are increasingly bypassing channel partners. In the United States, car sales have long been facilitated through authorized dealerships, establishing a highly intermediated process. These dealerships, acting as intermediaries between automotive manufacturers and consumers, have provided platforms for sales, service, and support. However, the rise of digital disruption and direct-to-consumer (DTC) models is challenging this established system.
Enterprises like Tesla have spearheaded the DTC approach, selling vehicles directly through corporate sites and strategically located showrooms, bypassing the traditional dealership model. Embracing DTC offers transparency in pricing, eliminating the need for consumers to engage in comparison shopping, as everyone gets the same deal. Despite the benefits, mainstreaming DTC models presents challenges, as distribution and go-to-market strategies become crucial for scaling and overcoming consumer acquisition costs. Tesla's success in altering the car sales game has prompted other EV manufacturers, including Lucid and Rivian, to follow suit. Although state laws in the U.S. protect the traditional dealer model, the automotive landscape is shifting, and established players are exploring digital retailing experiences and customer-centric approaches to adapt to the evolving market demands.
SO WHAT? The Direct-to-Consumer (DTC) model in car sales holds profound strategic implications for the automotive industry. One of its notable advantages is the introduction of more price transparency and reduced friction in the car-buying process. By offering consumers an established and nonnegotiable price, the DTC model eliminates the need for comparison shopping, ensuring that everyone receives the same deal. This not only empowers consumers but also simplifies the overall purchasing experience by bypassing the shared challenges associated with dealing with traditional dealerships.
However, it is crucial to acknowledge the potential inequities that may arise with the DTC model, particularly concerning digital access and dexterity. Variances in broadband access and digital proficiency among individuals, families, regions, or countries could lead to disparities in adopting this model. The shift to DTC necessitates innovative marketing and consumer acquisition strategies compared to the traditional dealership model. Moreover, the role of dealerships is likely to evolve, if not become obsolete, disrupting the long-prevailing dealer model protected by U.S. state laws. This transition to a DTC product also prompts a reimagining of supply chains, category standards, and regulations within the automotive industry.
This post presented some fresh and reimagined meanings of the car for the consumers, uncovering potential strategic implications. Stay tuned for a deeper exploration of the intricate dynamics shaping the future of mobility.