Volvo customers like their technology like they like their cars: understated. Luxury, if it registers at all, is the demurest of flickers. They want their smart devices to make a smooth transition from the outside world to their cars. And if they can press a button at breakfast, and the car is the perfect temperature when they finally settle into the taupe leather seats, all the better.
“Usability and a human-centric approach are vital,” says Klas Bendrik, chief information officer and senior vice president of Volvo Car Group. With Volvo’s top-of-the-line model, the 2016 XC90, “touch screen sensors remove a lot of buttons. For us, it’s not about technology, it’s actually about the customer experience and ease of use.”
Bendrik, CIO of Volvo Car Group since 2010, assumed the SVP mantle in March, when he began reporting directly to CEO Haringkan Samuelsson. His bump-up in responsibility speaks to a philosophical shift at OEMs: that high-tech, once an embellishment, is finally becoming integral to the research, design, sourcing and building of automobiles.
For Bendrik, the shift is none too soon, as consumers already expect to be connected at all times. That happened in the early 2000s, he said, and the automotive industry is at an “inflection point.” OEMs that aren’t already partnering with companies outside their traditional supply chain—for Volvo, it’s Telco for sensors, Ericsson for over-the-air software updates--will be left behind, he says.
Bringing broadband, mobility, cloud services and sensors into the mix “gives you a lot of opportunities for the customer experience, but also opportunities regarding new and future business models linking into the automotive sector.”
When the world’s largest taxi company (Uber) owns no vehicles, and the largest accommodation provider (Airbnb) owns no real estate, the interface is where the new money’s at, and automakers have to figure out how to make that work for them.
“It’s very clear: if the automotive industry doesn’t grab this opportunity [to change its business model], someone else will," says Bendrik.
Blurring boundaries between the car and other smart devices is critical to this mix, says Bendrik, who spoke with IndustryWeek before his keynote address at TU Automotive Detroit in June. Not just “digital natives,” but many others in Volvo’s “customer range,” are either “prepared to adapt to new technology, or they will adapt to new technology.”
Originally, Volvo’s technology was centered on safety--one of the company’s core values—specifically, emergency and breakdown calls. “We saw a great development around that, but now we have clearly seen when we add convenience factors around our connected cars, then we actually get connected customers and the benefit and the customer value increases very rapidly.
“We saw that also around the introduction of smart phones, when we were able to get the much tighter connection between the devices of the customer and the car, we saw a very steep curve in additional value.” The take rates for Volvo on Call took off “when we actually connected a smartphone with an app for our vehicle,” he says.
For Volvo, successful convenience features differ from country to country. In China, says Bendrik, a concierge service accessed from a touch screen in the car is a hit. In Nordic countries, the remote heat start is popular. “Those small aspects around the convenience part are tokens where the customer value increases,” he says. “We see that very, very clearly on the user rate.”
He sees retail opportunity in Volvo’s e-business shipment, where consumers are able to order goods from their cars—and have the products shipped there. “The transporter is able through a single- use digital key to locate the car, drive up to the car, open the trunk, do the shipment, close the trunk, lock the car—and the digital key ceases to exist.”
“It’s a fantastic time to be at a car company,” Bendrik adds, “especially to be able to cross over to a number of different industries.”
