Everywhere I look, I see automotive
Steve Schmith is the director of automotive industry strategy at Acxiom. He has spent nearly all of his 25 years of professional experience working in the automotive industry, including 17 years at Deloitte, wrapping up his tenure as the Global and US Automotive Marketing Leader and two years at Automotive News as the Executive Director of Custom Research and Data and host of the Daily Drive podcast. I caught up with Steve at 7am, as he has his morning coffee and is accompanied by his three Boston Terriers.
The Industry of Opportunities
“I had no intention of ever working in automotive. In fact, I had never even been to Detroit.”
I went to journalism school, I got a degree in journalism with a minor in television and radio production. I actually started my career in economic development. What I have come to love about this industry and what outsiders sometimes don’t see is how much opportunity there is in the automotive industry. If you’re an engineer, a designer, a marketer, if you studied supply chain, I really believe that there is an unrecognized opportunity for folks who didn’t grow up in an automotive family, to create their space here.
I think that when most people think about the automotive industry and dealers, they stop with the transaction; the sale of the car. The truth is, when you think about it more broadly, and you think about how people connect with all the brands in their lives, it is so much more than that.
There are so many vendors because there are so many opportunities. From selling a vehicle, to financing a vehicle, insuring, repairing, and servicing, as examples. If you’re in the business of reconditioning vehicles, or running fleets. And none of that even begins to touch on what happens when you’re inside the vehicle, particularly as vehicle connectivity improves, matures and scales and the opportunities to connect with customers those technologies create. There are just so many opportunities for people to connect with brands and there are increasingly a lot of brands – automakers, suppliers, lenders, insurers, in-vehicle content providers, etc. – competing for that attention.
“I think a lot, I think about the industry a lot.”
Clearly these are exciting and fundamentally transformative times in the automotive industry, so it helps being such a fan of the industry, a fan of the brands and the manufacturers. It’s also very fun and inspiring to be on the road and to see these beautiful machines and all the technology. You often hear people speaking about automotive brands as if it forms a part of their identity. These brands are very personal to people. They take them on family trips, they take them to work every day, they hold our families and they are where some of the most wonderful conversations happen. I just feel so lucky to be a part of the automotive industry, to work in storytelling, in strategy, to bring it all together in such a personal way. Being able to relate the personal nature of automotive and the brands in this industry helps as our team at Acxiom thinks about and strategizes how we can best deliver value to our automotive clients.
An Industry in Motion
“It surprised me that it took a pandemic to really drive digital retailing.”
Digital retailing in our industry has been around for 20 years but there was really no catalyst to put a lot of money into it because the model was working. Coming out of the 2009-10 Great Recession, we were on a growth trajectory that did not stop for 10 years. So, understandably, there was no reason for automakers or their franchised dealers to go “all in” and fully invest in, adopt and scale what is best-in-class digital retailing. Then suddenly, the pandemic hit and the environment changed. We saw disruptors entering the market who did not require the in-person relationship, and they became very big competitors. It’s amazing to see how far we have come in the last two years and, yes, there is a lot of disruption and, yes, there is a lot of investment and growth but I am truly excited and think it is so wonderful to see how companies are focused on connecting with customers.
An Industry Driven by Data: The Changing Ecosystem
“As we push digital, we also need to understand that we have this entire ecosystem of businesses that have historically worked within very defined industry lines. Those lines are blurring.”
There are so many opportunities for different brands in the connected mobility business ecosystem to connect with people outside and increasingly inside of the vehicle. There are so many aspects of the full customer journey when you think of the entire experience. Whether they are driving the vehicle, sharing it, or riding in it. Whether they are getting it serviced or charging their EV. The once clear industry lines separating the brands engaging people as they move from one place to another are blurring more and more each day.
On the flip side, having that single view of the customer gets very hard and that is where Acxiom really plays well and creates value for our clients. That is our core competency, our ability to create a single view of the customer and help brands deliver in real-time personalized, omnichannel customer experiences based on a deep understanding of people.
If you consider the buying side, there are multiple channels where a person interested in buying a vehicle can enter the shopping funnel – an automaker website, a dealer website, a third-party website or simply walking into the showroom of a local dealer. Brands that can connect those channels and deliver a personal customer experience while doing so can be better positioned to win.
Consider the finance and insurance aspect of buying a vehicle and services like extended warranties, gap insurance, or increasingly connected vehicle subscription services. They all come into play and there are just so many ways that people interact and expect those interactions to be personal. Having the ability to deeply understand consumer behavior, preferences, timing and then make it all personal, that is the challenge that the industry faces.
How do you create a consumer experience that brings all of that together, that is very personalized and that is done at scale and done in ways that are ethical and done with privacy built in? That is what we do at Acxiom.
What are you thinking about, what is next?
I am really interested in how various segments of the U.S. market will adopt electrification. It is not a one-size fits all model. Acxiom has a point of view publishing in June where we will be presenting a bell curve that is essentially a view of EV adoption among people in the U.S. Not all consumers are in the same position, which means marketers require different approaches in terms of marketing; the mission is different for people wherever they fall on the adoption bell curve. People on the far right side of the curve shouldn’t be ignored today regardless if they are likely years away from buying an EV. They simply require a different message than that of people ready to buy today.
I am also thinking about the customer experience at the charging station and whether a good or bad experience may be associated with the type of charging station or the vehicle brand itself. Right now, that’s an unanswered question, but my sense is if a new adopter of EV technology has a poor charging experience, the person might equate that experience to EV technology and the brand EV they are driving and not so much the charge point provider.
When you consider your in-depth understanding of consumer behavior, what do we know?
We know that when it comes to autonomous technology, consumers are interested in technology that protects them from themselves. Interestingly, the paradox is that the willingness to pay for autonomy is not high. I think that presents an interesting opportunity when we consider connected solutions like infotainment and vehicle health monitoring, which, in contrast, is a faster and more near-term opportunity.
Right now, when we consider the regulations and the fact that there are somewhere between 15-16 million new vehicles entering the market in the United States annually, each one with about a 12-year life cycle, it is going to be a long time before we get to fully autonomous vehicles everywhere. The more near-term opportunity to connect with people will be through in-vehicle technology. That experience inside the vehicle, greater convenience within the vehicle, managing your calendar, your groceries, your digital communication from inside the vehicle, all of that, can happen in the vehicle right now. What I also really love about this technology is that it can be built, it can be upgraded, it can be scaled much faster than autonomous technologies can. We are going to likely see a lot more forward motion regarding what happens inside the vehicle in terms of connecting with consumers and creating experiences. Of course, the development of autonomous vehicles will continue to move forward but there are clear opportunities that are technologically rich and where the ROI and the value to shareholders is clear and scalable.
“When we think of people, these are not experiences that are foreign to them. When you get an update on your phone, you don’t consider that a recall; your phone is now better because it got updated. Same should go for your vehicle. If your car is pushed an update, your engine can run more efficiently, the software inside your vehicle has been patched to provide better cyber security. Your car is better: The vehicle that I bought last year is better today. That is a very fundamental shift in how consumers view their vehicle."
There were so many ideas shared in our session, so many perspectives gained. Steve is a deep thinker and it is apparent in everything he does, including the way he speaks and tells stories.
His ability to seamlessly shift from technical, data driven conversations to sharing his personal views on the industry is flawless. Steve will be moderating a panel at CXAUTO2022 which will include Jeremy Beaver, the CEO of the Del Grande Dealer Group; Richelle Estrella, Department Head – Customer Data Lab at Honda North America; and Myles Rose, Automotive Digital Strategy Director at Acxiom.
This Panel will be discussing “Harnessing the Power of CDPs to Nurture A Customer First Philosophy That Drives Profitability and Loyalty.” CDPs offer automotive brands the opportunity to build modern marketing platforms where customer identity serves as a foundation on which automakers and dealers can build strong, first-party identity solutions while also regaining control of marketing decisions related to targeting, media spend and attribution.