Pandemic Slows the Race to Connected Retail via Cars

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Pandemic Slows the Race to Connected Retail via Cars

By Thad Rueter - 08/03/2020
Pandemic Slows the Race to Connected Retail via Cars
Grocery and other retail pickup services could get a boost from the growing connected vehicle ecosystem.

The pandemic is putting the brakes on the rise of connected cars and trucks — and, in turn, the race to enable more mobile commerce from those vehicles.

According to ABI Research, “the connected vehicle industry will face a 15% decline in shipments and flat revenues in 2020. However, both embedded and aftermarket segments will see accelerated growth in 2021, and sales should return to trend in early 2022.” The research firm expects that in 2025, global connected car shipments will hit 115 million.

"While standard fitment of cellular emergency systems and free trial subscriptions of connected services are responsible for robust connectivity penetration in the few vehicles that have been commercialized this year, the enormous contraction in new vehicle sales due to COVID-19 will make 2020 a flat year for connected cars,” said Maite Bezerra, smart mobility and automotive analyst at ABI Research.

Connected cars and trucks can spark more retail purchases over time by enabling drivers and passengers to, for instance, use in-vehicle mobile commerce and navigation to hunt down convenience store loyalty offers while on the go, or order retail goods on the road that can be delivered curbside (with voice-assisted technology a big part of those plans). Major tech players such as Amazon and Google are working to provide operating system support for the fledgling connected vehicle retail ecosystem while card payment networks and mobile commerce tech suppliers are getting increasing involved with the action. The rise of 5G mobile network technology also promises to provide a significant boost to connected vehicles and their commerce capabilities.

The aftermarket space has seen a renewed interest in plug and play solutions as some consumers have postponed the purchase of new vehicles. “Reportedly, this has motivated OEMs to search for partnerships with aftermarket connectivity providers, such as Mojio, to increase their revenue streams. While this may be a short-term opportunity, OEMs could make use of aftermarket devices to drive higher usage of their applications and broaden their access vehicle data," Bezerra concludes.