The race is on to reduce commerce and payments friction in the fast growing world of connected vehicles. Automotive manufacturers, payments players and other digitally-focused firms are experimenting and competing to build, deploy and win driver loyalty from the software platforms vital to the new, emerging world of cars and trucks.
Among the participants in that race is Xevo, an automotive software supplier whose technology is already deployed in some 25 million vehicles worldwide, including such brands as Chevrolet, GMC, Cadillac and Buick. In a recent discussion with PYMNTS’ Karen Webster, Xevo CEO Dan Gittleman talks about the path his company has taken, and what’s coming next for drivers.
The time is right for companies seeking market share in the connected vehicle market to establish relationships with other players and start winning over drivers in time for even more development.
According to PYMNTS’ Digital Drive Report, 135 million U.S. commuters spend $212 billion annually as they drive to and from their workplaces and homes — 40 percent of these commuters spend over $18.7 billion getting their daily caffeine fix, while 54 percent order ahead and pay for food, influencing $47.3 billion in commerce every year.
Xevo, whose platform helps enable drivers to conduct commerce, access loyalty offers and discounts, and make gas and other payments from prompts seen on their vehicles’ dash displays, is seeing significant levels of buy-in via its software. For instance, click-throughs are “well over 20 percent,” Gittleman told Webster, reaching 30 percent in some instances. “The numbers we are getting in now are absolutely staggering.”
Xevo And OEMs
The intersection between connected vehicle technology and commerce is getting quite busy.
Cars, which were once the 5,000 pound hunk of steel on wheels that got drivers from point A to point B is now the ultimate mobile, connected device — a robust software platform on wheels capable of such things as giving drivers directions to gas stations and helping them pay at the pump.
It’s an evolution that Xevo has seen evolving from its beginnings 20 years ago as an infotainment platform that original equipment manufacturers (OEMs) installed in their vehicles, pivoting to connected vehicle technology as that ecosystem began to grow and started to represent the future of automotive technology. The relationships and hands-on understanding of what OEMs wanted held them in good stead as Xevo adapted its platform to power connected car features.
The merchant relationships that were part of its portfolio from the start, Gittleman said, gave Xevo and the OEMs a connected commerce starting point: Xevo can bring its software platform to its merchants and, with the telematics already integrated within the car by the OEM, they can develop new apps and features that appeal to car buyers.
Xevo’s software can “fit on top of any other systems out there,” which reduces the friction that often comes with software and technology integrations.
More importantly, the Xevo platform allows OEMs to now have a direct relationship with the consumer — something they have never had before. That relationship is built from the start: The white label Xevo app, branded by the OEM, is downloaded as part of the consumer onboarding process at the dealership, reducing a potential point of friction, and giving OEMs that closer post-purchase tie with drivers and the data they produce. Gittleman called the Xevo software “lightweight” — it does not load pages until users request them. Drivers can create and maintain their own profiles via the software, and they can access those profiles not only in their own vehicles, but also in rentals and other cars that carry the technology. The system tokenizes all data, he said, including payments data.
When drivers leave the dealership, the app with that functionality is already on their phones. It’s a distinction with a difference, Gittleman said.
Unlike the brand-name players that he says are essentially out to “compete with the car guys,” as the car operating systems and in-dash command and commerce center, Xevo is giving OEMs the platform to create a better driver experience. Commerce is — and will play — a big part in defining that experience.
Gas And Insurance
So how does this work in the real world?
The car’s in-dash system tells a driver who is low on gas, how to get to a gas station — but not just any gas station. The app can direct drivers to the station that they prefer, or the nearest station. The system can also offer a coupon or discount to encourage the driver to shift preference. Upon pulling into the gas station and putting the car in park, the in-car technology, relying on GPS, can authorize the transaction and the pump.
“There is almost nothing for you to do,” he said. “We have taken that friction away.”
The potential of the software goes beyond basic commerce use cases to others, including automotive insurance. Xevo’s software is connected to the car’s telematics, which provide a real-time report on the type of driver behind the wheel. That can result in insurance premium payments innovations in the form of metered premiums that could lower insurance rates, or pay-as-you-go plans based on usage. Gittleman said that could extend to use cases that could essentially adjust insurance premiums and rates based on how the car is being used and for what employer.
“Say that there’s a college student with a car who would like to earn a little money and use that car to deliver pizzas for the local pizza joint,” Gittleman offered. “Instead of the pizza place paying a fleet of drivers and insuring that fleet, they could sign on a fleet of college students that could be charged insurance premiums based on how much time they spend delivering pizza by linking the app and car to participating insurance companies.”
Gittleman believes that, while this technology is a competitive advantage, it soon will come as standard equipment, just like so many other “aftermarket” adds have before. That’s why he said that Xevo is fast-forwarding its ecosystem of OEMs and merchant partners in these relatively early days of connected car commerce.
For now, Xevo is focused on commerce, and that means mostly fuel purchases along with parking and quick service restaurants (QSRs). He outlined a scenario in which a hungry commuter orders ahead from a fast food joint, authorizing payment before arriving at the location. Upon pulling into that QSR, and putting the car in park, the in-dash technology recognizes that driver has pulled into a particular spot and sends an alert to the team inside. At that point, the food is delivered to the car or is available for pickup inside. These examples are only the beginning, Gittleman said. Data collected by these software platforms on wheels can judge a variety of situations — like hyper-accurate weather data based on the use of windshield wipers.
“Focus is key,” he said, “and commerce is the sticky solution that OEMs want most.”