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Digital Transformation in Automotive Industry Chinese-German CAR Symposium

China has now the world’s largest netizen population and the largest e-commerce market. With a large population of “always on” consumers, the digital eco-system is evolving rapidly in China and is drastically redefining customer experience management in all key dimensions. Fast development of connected car technology and its new applications have created a new biz platform. What does this mean for car manufacturers?

Digital Transformation in Automotive Industry Chinese-German CAR Symposium

  1. 1. Digital transformation in the automotive industry Chinese-German CAR Symposium April 26th, 2016
  2. 2. Copyright © 2016 Accenture All rights reserved. 2 China has now the world’s largest netizen population and the largest e-commerce market Value of China’s online shopping market at USD 440 billion 440 Online shopping accounts for 10.7% of total consumer goods sales vs. USA 6.6% 10.7% Social media app. WeChat has more than 600 million active users 600 More than 642 million internet users, the largest netizen population worldwide 642 More than 527 million mobile internet users 527 China’s “Netizens” spend 25.9 hours online every week 25.9 440 300 52 Online market volume in 2014 China USA Germany 642 280 72 Netizen population in 2014 China USA Germany Unit: million Unit: billion USD Source: World Bank, United Nations, U.S. Commerce Department, Ministry of Commerce People’s Republic Of China, National Bureau of Statics of China, CNNIC, Tencent financial report
  3. 3. Copyright © 2016 Accenture All rights reserved. 3 With a large population of “always on” consumers, the digital eco-system is evolving rapidly in China Cloud solutions provide alternative service models, e.g. platforms and applications as a service, enabling new levels of scalability, flexibility and responsiveness Social media and collaboration technologies in Marketing, CRM or Sales systems enable relationship building within and beyond the organization. In China there are many social media channels for different markets (e.g. food, travel, business, music) Analytics/ Big Data How insight is created Cloud How things are delivered Social How things are discovered Vehicle on Cloud enables OEMs to set up an automotive ecosystem at lower cost of ownership Analytics within the application architecture enable generation of new insights and information, support of public opinion monitoring and service optimization Smart devices, innovative apps and 3G/4G mobile Internet provide flexibility to shop, read and chat anywhere at any time Mobility How things are consumedTelematics play a vital role in connected vehicle services and enable bi-directional communication between customers and OEMs DIGITAL BUSINESS
  4. 4. Copyright © 2016 Accenture All rights reserved. 4 Innovative digital players are reshaping customer experience and redefining business models Digital Behaviors New Business Models Derived newer business models
  5. 5. Copyright © 2016 Accenture All rights reserved. 5 Digitization is drastically redefining customer experience management in all key dimensions 1 5 3 6 4 Provide personalized content based on previous purchased data Customer experience, Digital performance optimization Convert “Branding” to Sales (Social identity, authority authorized, group purchase) Marketing platformListen and understand “online / offline consumers” Executive insights, predictive analyticsVender and dealer 2 Capability CRM – Big Data Awareness Browse Visualization Advocate Trust Purchase Anonymous Broadcast Initiative Pause Measurements Position Digital marketing, (SEO/ SEM/ Web pages), social ads and community Integration, development, innovation Acquisition Engagement Sales Post-Sales Commitment
  6. 6. Copyright © 2016 Accenture All rights reserved. 6 Changing consumer behavior and competitive dynamics pose both challenges and opportunities • User preferences change – customers want digital services • Data is the future currency – consumer show willingness to share • Industry boundaries are shifting – service providers establish direct client interaction • Investment areas: Business Model Innovation and Product Innovation • The car as "ultimate mobile device" – new players disrupt the market place based on service-oriented and data driven business models
  7. 7. Copyright © 2016 Accenture All rights reserved. 7 What will be the next-generation car customers look like and what do they want? That kid – the one in the back of the SUV with the iPad – is the automotive industry’s worst enemy. (Bloomberg) “ ”
  8. 8. Copyright © 2016 Accenture All rights reserved. 8 Fast development of connected car technology and its new applications have created a new biz platform 1st Generation 2nd Generation 3rd Generation ?  Open Platform  USB Jack  Multimedia Player Interface  Web browser  Wi-Fi  Text Reader  Third party partnerships  Location-based services  Intelligent POI, family tracking  Voice enabled social networking  Real time traffic & weather  On-demand in-vehicle entertainment  Mobile app integration Future Innovations of Connected Cars  Full internet capability  On-demand in-vehicle entertainment  Advanced Driver Assistance Systems  Augmented reality Today… Tomorrow…  Safety & Security  Voice Navigation  Remote Unlock  Concierge Services  Vehicle Diagnostic  Stolen Vehicle Recovery  Bluetooth
  9. 9. Copyright © 2016 Accenture All rights reserved. 9 Auto companies should consider two strategic dimensions that unlock value via Digitization Strategic Options 1) Business as Usual: Manage risks arising to existing business model(s) from digital activities of competitors 2) Partial Digitization: Realize EBITDA opportunities through digitization of existing value chain 3) New Business Models: Realize EBITDA opportunities through development of new revenue streams enabled by a new value chain Value Areas Digital Customer: Apply digital technology to address customers in a more sophisticated way to increase revenues and profitability Digital Enterprise: Decrease costs of the existing value chain’s primary functions (e.g. R&D) as well as support functions (e.g. HR) Digital Business: Digitize your current business model or develop new business models generating profits based on digital technology Digital Enterprise Internal Focus ExternalFocus Digitize Operations Digitize Customer Experience Digital Customer Digital Business Disrupt (Sub-)Market(s) Partial Digitization New Business Models Business as Usual 1 2 3
  10. 10. Copyright © 2016 Accenture All rights reserved. 10 Digitization of customer experience in the whole journey of lifecycle management is just taking place Specific use cases Physical experience Targeted research (actual purchase interest) Consideration Purchase Configuration/ price negotiation car & downstream Waiting phase Purchase/sale Hand- over Use and After Sales process Sale/new purchase & FS retention General info gathering (no immediate purchasing interest) Awareness . . . . . . . . . . . . . . . Usage Repurchase Cross-Market Sales Funnel KPIs Data Quality Reporting Customer Service Operational Reporting Customer Service Agent Performance Reporting Marketing Campaign Efficiency Reporting Channel Reporting (Customer Activity) Lead and Prospect Qualification Sales Talent Analytics Customer Service Capacity Planning Contact Routing Optimization Statistics about vehicle and driving behavior Expected Re-Purchase Date Service Recommendation Crisis Detection Social Network Analysis Segment-based Contact Strategy Churn Analytics Test Drive Model Forecast Configuration Recommendations Website Personalization Next Best Offer Marketing Optimization 1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18 11 19 20 21 22 23 Cross- and Up-Sell Analytics Overall use cases
  11. 11. Copyright © 2016 Accenture All rights reserved. 11 Integrated content mgmt. and multi-channel mgmt. are key to effective digital sales & digital marketing WeChat Mobile APP Pop-up store location Multi-channelexperienceinteraction My CAR Call Center E-commerce Improved sales 3rd party data Inventory Management. Task plan Activities execution Connectivity Service data Online behavior data 3rd party data Sales data Online & offline data integration Marketing activity data Parts data Data warehouse Service data Policy Process Marketing activities Sales strategy Customer Better experience Dealer Efficient operation OEM Flexible policy
  12. 12. Copyright © 2016 Accenture All rights reserved. 12 Data becomes ever more powerful only if being connected – data connectivity to be improved External data Internal data Available external data Unionpay payment data Website browsing records WeChat payment data Ali-pay payment data Mobile App using records Transportation records (airline, rail, etc.) Accommodati on records (hotels booking, etc.)… Data links: Mobile phone, MAC address, etc. DMS CRM POS …
  13. 13. Copyright © 2016 Accenture All rights reserved. 13 Business model innovation towards a more service- orientation becomes increasingly important 1 CAR SHARING SERVICE • Alternative service for private transportation • A new fashionable lifestyle for younger generations 2 VEHICLE SERVICE • Vehicle related items incl. parking, fuel charge, repair service etc. • Exclusive discount or resource availability 3 CHARGING SERVICE • Charging facility location • Charging meter package and high usage discount 4 NEV add-on • NEW add-on mobility service (combustion engine vehicle rental) • Short term substitution for NEV with other conventional models 6 ONE-APP for CITY LIFE • Everything needed in your city: travel guide, ATM location or even restaurant tips (covers all daily needs in city life) 5 CONNECTED VEHICLE & PERSON • Connected vehicle – OBD, digital content, CRM etc. • Connected person – location based service (part of social media) MOBILITY SERVICE P
  14. 14. Copyright © 2016 Accenture All rights reserved. 14 • What will be the future customer needs? • What type of business models can be realized beyond traditional “hardware” in the context of service transformation? • What is my partnership strategy to bring together the right set of competencies? • How to achieve shorter innovation cycles, higher agility? • How to build up the right competencies? To cope with the challenges, car manufacturers need to address a few key questions proactively
  15. 15. Copyright © 2016 Accenture All rights reserved. 15 To successfully digitize customer experience, six key areas need to be taken into consideration Integrate d Journey Design Personalized Digital Experience Continuous Customer Access Digital Interaction Management Social Engagement Digital Intelligence 16 5 2 34 Ensure a seamless customer journey! Make it relevant. Make it personal! Maximize availability and convenience for 24/7-Customers! Listen, learn and use social media activities! Move beyond transactions to digital relationships! Digital Business Define and continuously use predictive analytics!
  16. 16. Copyright © 2016 Accenture All rights reserved. 16 A well thought-through digital strategy and organization transformation is needed to win in future game Digital Trends & Visioning Business Model Customer Experience Digital Enterprise People & Innovation • Explore • Educate • Engage “Engage me with the art of the probable” • Reinvent my business • Disrupt or be disrupted “Disrupt my industry” • Customer engagement • Products as Services “Excite my customers” • Do more with less • Increase collaboration “Redraw my operations” • Build a Digital culture • Adopt Digital ways of working “Build a Digitally native organisation” How I can use Digital to… Motive
  17. 17. 17 Disclaimer This report has been prepared by and is distributed by Accenture. This document is for information purposes. No part of this document may be reproduced in any manner without the written permission of Accenture. While we take precautions to ensure that the source and the information we base our judgments on is reliable, we do not represent that this information is accurate or complete and it should not be relied upon as such. It is provided with the understanding that Accenture is not acting in a fiduciary capacity. Opinions expressed herein are subject to change without notice. It is not intended to provide advice on your specific circumstances. Follow us on Social Media Accenture Greater China on Sina Weibo Accenture Greater China on WeChat Contact me john.jun.shen@accenture.com

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