The Insight250 spotlights and celebrates 250 of the world’s premier leaders and innovators in market research, consumer insights and data-driven marketing. The inaugural list was revealed this April and created renewed excitement across the industry whilst strengthening the connectivity of the market research community.
With so many exceptional professionals named to the Insight250 it seems fitting to tap into their expertise and unique perspectives across an array of topics. This weekly series does just that; inquiring about the expert perspectives of many of these individuals in a series of short topical features.
This edition features two seasoned research experts who are leading experts in the automotive industry, Julia Polyakova, Head of Market Research for Toyota Motor Russia and Alexander Edwards, President of Strategic Vision.
With consumer consumption evolving and the automotive industry facing manufacturing and supply chain challenges, Alexander and Julia share their perspectives on how innovation is transforming the market.
Crispin: The automotive industry has had an array of challenges over the past 18 months across consumer demand, supply chains and product manufacturing. What do you see for the consumer auto market in 2022?
Julia: The automotive industry has been evolving significantly in the last few years. As 2020 was the year of pandemic restrictions, most factories were shut down, the supply chain was disrupted, and companies suffered extensive losses. All manufacturers faced real challenges and difficulties during that period. Many of internal operations (logistics, sales, marketing, after-sales including all safety rules and restrictions) were refocused and transformed in line with new reality. New processes were integrated to be ready to continue the production and sales processes. A great job was done in a very short period of time to provide customers with desired vehicles or support with their current vehicles. For next year (2022-2023) we are focusing on launching new interesting products in the Toyota and Lexus lineups, along with innovations in after-sale services. The key element, as usual, is the customer – to make the purchase process and further after-sales services as simple, fast and convenient as possible.
Alexander: During the past year we have seen ‘opportunistic’ behavior magnified by both consumers and vehicle sellers. During the early months of the pandemic, some consumers were able to achieve terrific deals on inventory that simply wasn’t moving as the standard dealership model was undergoing daily changes trying to keep up with consumer safety standards and regulations. In more recent months, where inventories have become low due to everything from chip shortages to failures in manufacturing supply chains, the power now resides with the vehicle seller, and they are making back what little they may have previously ‘lost’ due to current premium pricing for both new and used vehicles.
In 2022, automotive manufacturers will fix the broken parts of their supply chains and revisit some of the Just In Time (JIT) logistics to weather potential disruptions in the future. Those consumers who were holding off getting a vehicle because of concerns of both personal and global economic instability over the past couple of years will return to the market and find many vehicles that they love at a price that they can feel comfortable with.
As a side note, I have always thought that JIT manufacturing is similar to the plans school students would make in getting their homework turned in “just in time.” I guess some of these high school students have gone on to construct supply chains where they can blame the dog for eating their homework leading to delays and disruptions.
Crispin: Research findings tend to drive innovation across many industries, how do you see the role of market research evolving for the automotive space in the coming years?
Alexander: Many research studies, projects and even organisations have died over this past year as what they produced was, at best, “nice to know,” and at worse, misleading automotive companies to go in the wrong direction. For example, how many times are advertising companies going to produce ineffective consumer communications about electric vehicles (EV) proclaiming how one can save money and make the greener choice with their vehicle? Yes, it might come up in a focus group that an EV is environmentally friendly, but examining the real values and motivations of consumers it is clear that EVs are purchased when they enhance the product, such as adding power and performance to a Tesla sports car.
It is the ability for consumer research to capture and quantify the natural language of the customer in a way that predicts and maximises advocacy, conquest and loyalty where research must and will continue to evolve to be relevant in future strategy. Soon the concept of measuring satisfaction will go away and researchers will look for what consumers truly love and strive for. The crazy thing is that everyone is already aware of this, as few humans will use satisfaction measures when discussing something they truly care about. Don’t believe me? This Valentine’s Day go tell your significant other that you are “very satisfied” with their performance. Yet, many often force customers to do just this in their research.
Gathering relevant consumer perspectives will continue to become increasingly integrated with real-time data of experiences. As vehicles contain and capture data about when the vehicle moves, where it goes, how fast, phone integration, music choices, etc. this will be combined with the previously mentioned enhanced consumer research using natural language that, when paired with advances in machine learning tools, will provide researchers with answers that are in near real-time and accurately predict future customer experience and behavior.
Julia: From a market research perspective, we are focusing on trend searching across all industries: automotive, social responsibility, advanced technology, eco, even reflection and mental health. We implement these findings into our products and brand philosophy. Our focus is always to offer our clients products which foresee customer needs and expectations. Market research becomes a key function for business support in the case of mid/long term strategies (BIG data analysis, trends searching, strategic insights, etc.). Here are the top five trends which customers really focus on nowadays:
· Connectivity is slowly becoming a must within new car models. It is very useful for private drivers as it offers lots of insightful benefits. On the other side, it is even better for fleet management and companies having many vehicles
· Electrification demand increases for electric vehicles has been rising throughout recent years and is expected to increase in Russia as well over the next five to 10 years.
· Digitalisation is a trend that is basically a combination of several trends in one. As you could see, it is more and more common among car manufacturers to use large touch screens as a panel control. It is really convenient and passengers feel more comfortable with them. It is not only visually appealing, but also is easier to navigate through, set up and manage.
· Transition to usership or car sharing has grown in the market for the past 1.5 years. Usually it happens when we discuss a second or third car in a household. We can’t say that people are less interested in buying their own cars in the case of the main vehicle in Russia, but the opportunity to rent a second car for a long period of time is quite interesting for customers.
· Subscription or renting a car for a long period of time (a year on average) allows customers to try different models across brand lines without the hassle of the reselling process.
Crispin: With dimensions like electric autos, self driving technology and even flying cars attempting to influence the market, what innovation do you believe will drive the next chapter of the automotive industry? What concerns you the most for the auto industry over the next few years?
Julia: When you are working with innovations, specially technology advanced innovations – like self drive technology, “flying cars,” or even auto parking systems (which actually is not so fresh and new), you are faced with conservative people who see a lot of risks, negatives points, fears and myths regarding these new features. Even when Toyota launched the hybrid engine in Russia many years ago, we were faced with a lot of myths regarding the battery system, like an inability to operate in winter conditions. Of course we developed a strong education program for our sales people, who can explain how the system works along with the main benefits of the HV engine, but nevertheless it takes time to adapt customers to new technology.
The main point is that new innovations always face an adaptation period. This is not only for the automotive industry, but also for every side of our lives. Usually new things are perceived as negative with a high level of rejectors. Most people are afraid of novelties, even if they are adding convenience. Every new feature takes time to be accepted by the customer’s mindset. This is why it is so important to develop an excellent education program for your customers in order to give them a chance to try these new features themselves to see the real benefits.
Alexander: An innovation that may be overlooked in the next chapter of the automotive industry is the customer-dealer interaction. It is absolutely false that most customers desire a ‘contactless’ sales experience where the shopping process, finance acquisition and vehicle delivery all essentially happen at a person’s own home or place of work. While the current dealership model has significant problems, the fact that there is a place with a person that people can go to and physically interact with someone adds to the trust and comfort that consumers have in making such a large purchase.
In recent months, out of necessity, dealers have accelerated many new channels for helping customers shop for and purchase a vehicle. The sales groups that discover how they can provide an experience that customers love and find enhanced profitability, not just in future sales from advocacy and loyalty, but in the current transaction, will become unstoppable leaders in this next chapter.
What concerns me is arrogance. It takes research down strange roads that everyone knows is wrong, but are often too afraid to say stop or help alter incorrect directions. It allows advertising agencies to continue to communicate the wrong attributes and benefits about vehicles that will engage customer values. It allows government agencies to impose regulations that are not only idiotic but also counter productive to achieving the goals they are designed to meet.
Crispin: What excites you the most for the auto industry over the next few years?
Alexander: The seamless integration of human and machine – our desires and values quantified in data with the vehicle’s features and AI systems utilising this data in new and exciting ways. While fully driverless (nonetheless flying) vehicles are still many years away – we are not too far from our vehicles starting on their own with the air and seats at the right temperature, the right music playing with the best directions based on live traffic already to go – without the driver having to do anything. All of our data of who we are, where we go, what we want, etc. will be integrated into the personal mobility systems that our vehicles will not only take us physical places, but also invite us to new experiences – everything from a new playlist the vehicle thinks the driver might like to even suggesting destinations that the driver never would considered.
Oh, and zero fatalities on the road. We are going to get there… though that is further off.
Julia: Since the first automobile prototypes rolled out for public use, there have been many innovative changes to the cars we drive, from body style to safety features to onboard computers. The most exciting innovations, however, are yet to come. Car perceptions were significantly changed from “transportation from point A to point B” to “private space for the driver and whole family with a focus on comfort, emotions and safety.” It gives you a feeling of freedom and mobility with a good level of comfort. All of today’s novelties and technological features are focused on customer comfort and confidence to deliver positive emotions even in traffic jams.
Crispin: HOT TOPIC: Sustainability:
What challenges do you see for automotive in terms of sustainability – how can insight help influence in this area?
Julia: Market sustainability is quite complicated, which directly depends on macroeconomic indicators like GDP, inflation, currency rate, import, export, unemployment level, social demographics indicators, etc. During the crisis of 2008 and 2014, the market dropped twice, after we had recovered. Vehicles are durable goods with a period of ownership of around 6 years for Russia. Last few year’s ownership period grew. To survive in a tough competitor environment you need to be 100 percent sure of what customers expect from your products, how they react to your brand, and how they understand your brand position in the market.
Alexander: We will be on the road to real sustainability when we admit that customers are not going to pay more for a compromise. Customers (especially in the US) are not going to move to a shared personal mobility with their own vehicle (they will share your vehicle – just not their own). Vehicle owners are not going to pay for a vehicle that has a shorter range, longer refueling times and generates a lack of trust with reliability. In the state of California you can actually hear back-to-back communications on the radio about buying an EV and then how the power will be off for the next day or two to help prevent fires.
Instead, we need to be honest about why customers want or reject sustainable mobility systems and either correct misconceptions with the right communications or realise that a change in behavior will not come from regulation without strong enforcement.
Insights from innovative research will help show the real paths to create an integrated system of personal mobility.
TOP TIPS:
Alexander: First, the foundation of all consumer decision-making is security, which can be expressed in natural language terms such as trust, safety, reliability, comfort, etc. Your product may be desired because it is the most fun, exciting, prestigious, etc., but unless the foundation is built on security (trust, safety, dependability, etc.), it will be a difficult choice for a consumer to ultimately make. Second, gratitude is a super-power – it inspires, encourages, directs and uplifts us to the better parts of ourselves.
Julia: Never be afraid to think differently from others, always look from different angles on your current business tasks and targets and find a proper way to optimise and enhance your routine processes.
