U.S. drivers are responsible for $212 billion of spending during their commutes, but carmakers have to overcome skepticism from consumers and advertisers about connected cars.
In-car commerce technology that lets people pay for gas, order food and see promotional offers from brands and retailers on the digital dashboards of connected vehicles is giving new meaning to the term "mobile commerce."
U.S. consumers spend a lot of time behind the wheel commuting to work, running errands or taking road trips to vacation spots, and interactive platforms increasingly will help them make the most of their travels. Americans are spending more time than ever before in their cars, with the average commute time increasing 20% since 1980, when the U.S. Census Bureau began asking people about their driving habits.
About 135 million people, or 54% of the U.S. adult population, rely on a car to get to work, and they typically spending 15 to 30 minutes each way, according to a study this year from Visa and Pymnts.com.
Those drivers are responsible for $212 billion of spending during their commutes, including $59.6 billion on gasoline. Nearly three quarters of all commuters surveyed, and 82% of millennials with long commutes, said they would shop more if the ability to shop and pay were integrated into their car, they survey of 2,000 people found.
Marketers are taking notice of the opportunities for in-car commerce as U.S. sales of connected vehicles are forecast to grow to 12.7 million a year, or 76% of new cars, by 2024 from 7.6 million two years ago, according to IHS Markit forecasts. The world's biggest automakers, such as General Motors, Ford, Toyota and Volkswagen, have developed connected-car systems with varying capabilities ranging from on-demand music streaming to automatic payments at gas stations. Retailers like Starbucks, TGI Fridays, Applebee's, Dunkin' Donuts and Wingstop are exploring how their customers are using these systems.
"It is important that the in-car payment solution is a seamless experience that the consumer wants to adopt," Olabisi Boyle, senior director of IoT, global connected car at Visa, said by email. "To aid in creating that 'adoptable' consumer experience, we are looking at the various driver personas, as vehicles today are used for different purposes — family car, ride sharing, weekend adventures, ride-hailing and more."
One of the biggest concerns among marketers is whether enough consumers have adopted in-car commerce technology, making the digital dashboard a worthwhile marketing platform that meets or exceeds their experiences with a smartphone.
"We're keeping our eye on it [in-car commerce]," Mike Balducci, vice president of strategy at marketing firm Valassis Digital, said in an interview with Mobile Marketer. "It's still in the early stages, and it's a chicken-or-the-egg problem of whether there are enough users or enough content to make it interesting for brands. That makes it challenging to get off the ground."
He said carmakers have contacted his company about distributing promotions and offers for its clientele of advertisers.