“If people say they just love the smell of books, I always want to pull them aside and ask, to be clear, do you know how reading works?” – Bridger Winegar
Month: October 2018
We’re competing with whom?
The future of the automobile industry seems pretty clear, and relevant to anyone involved in things Digital.
For those living in the suburbs, exurbs, and beyond, it will look a lot like it does right now: People will own or lease cars and use them to take themselves from place to place.
Having moved to a downtown condo a couple of years ago, I’m pretty confident a different model will become popular among us urbanites:
When I need a car, my NeedACar app will dispatch one. It will drive itself to wherever I am, take me wherever I want to go, and drive itself back to its home garage when I don’t need it anymore.
Imagine you (1) agree; and (2) are involved in strategic planning for a company in the industry. Plus, you’re digitally literate and consume science fiction at least occasionally — two essential qualifications.
And yes, while we’re exploring the automobile industry, the same thought processes apply to players in any other industry, too.
So … how do you size up your situation?
Start with the field of logical competitors, and how readily each of them can adapt to this new world of transportation.
Other automobile manufacturer/dealer consortia: These all have one certain and one potential advantage. The certain advantage is that no matter what the future looks like, someone will have to manufacture the cars. The potential one is brand loyalty: Even in an era of autonomous cars it seem likely that many drivers …well, in this scenario passengers … might have a preference for some makes and models over others.
But dealers will probably lack the scale needed to just house the fleets in question let alone manage them, and manufacturers by themselves have no ability to sell directly to consumers.
Uber: Using an app to get personal transportation to someone who needs it sounds a lot like Uber, except for the autonomous car part. Uber pretty much owns the mindshare of people who want on-demand transportation.
What Uber doesn’t have is a fleet of autonomous cars and the infrastructure that goes with one. Quite the opposite: Uber’s model works in large part because it’s made car ownership and maintenance Someone Else’s Problem.
Traditional taxi services do own and manage car fleets. But they haven’t even figured out how to compete with Uber. It’s unlikely they’ll figure out how to deal with on-demand autonomous self-service transportation.
Also, traditional taxis are pretty ugly.
Car rental companies would seem to be well-positioned for the scenario we’re exploring. They’re accustomed to managing large fleets and they’re in the business of providing vehicles on demand.
What they don’t have is the ability to cater to make-and-model preferences. Also, their fleets are concentrated in single large locations proximate to the local airport. In most cities the airport … and rental car centers … are located well away from the metro core, which means long delivery delays for the urbanites who are the core market for the service we’re talking about.
Turo and its brethren are Airbnb for car owners. If you won’t be using your car for a while you could make it available to people who need one.
With the addition of autonomous vehicles this model would seem to have a lot going for it — no need to own a fleet; a wide variety of makes and models on the street; and because the cars are self-driving the major inconvenience barrier — having to arrange meeting places to deliver and return the vehicle — goes away. It would, however, depend on car owners leaving their garage doors open.
Amazon: I have no idea what Amazon would bring to this party, beyond its obvious broad reach among consumers. Except for this: It didn’t occur to Best Buy that Amazon was even a competitor until far too late in the game, just as it didn’t occur to mainstream publishers that Amazon was a competitor until far too late in that game, and didn’t occur to traditional data-center outsourcers that Amazon might become a competitor until the game was nearly over.
Which gets us to the point of this little exercise: As companies dip their toes in the Digital waters, they’re (and by “they’re” I mean “you’re”) going to have to do far more than use Digital capabilities to gain an edge over the competitors they have right now.
They’re going to have to anticipate who their competitors will be once the innovation gears have gone through a few rotations.
Or, even better, they’ll choose some better competitors to beat than the ones they’re competing with right now.