12
Dec

Autonomy, Delayed: Four Reasons Why Millennials May Not Be Ready For Self-Driving Cars

An Autonomous Future Series: For automobile manufacturers, suppliers, and technology companies, a bold new future has arrived. Technology that adds autonomous features to the driving experience are now available on vehicles by all major manufacturers – inching us ever closer to the day where the driver is a passive, rather than active, participant in the driving experience. To take a closer look at what’s to come, automotive research experts from Market Strategies-Morpace will share their insights in an occasional blog series titled “An Autonomous Future.” In this blog, Dania Rich-Spencer and Stephan Schroeder, Automotive Vice Presidents at Market Strategies-Morpace, share insights about why a consumer panel of millennials do not trust self-driving vehicles and, therefore, would not step foot inside one.

By: Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

To say that autonomous vehicle technology is top of mind for auto manufacturers is a slight understatement.

Across the globe, carmakers are doubling and tripling down on features that will take the power of the driving experience out of the often-unpredictable hands of the car owner, and into the relative algorithmic safety of computer-driven vehicular tech. According to a Brookings Institute study, manufacturers spent more than $80 billion on engineering AV technologies for their cars in 2017. In fact, a majority of this year’s models have incorporated one or more autonomous features — things like lane departure warnings, automated braking, and radar-enabled cruise control.

Framed against this reality, it would be easy to expect that a hands-off future is all but assured. In fact, at the recent ADAS & Autonomous Vehicle USA Conference, engineers spent two days talking about continued refinements that will assure the public’s safety. During one session, in fact, engineers discussed with pride spending considerable resources to understand how many times a pedestrian looks before entering a crosswalk.

So it was surprising — indeed, shocking — to observe these same engineers shift in their seats during a consumer panel discussion facilitated by Suzanne Miller of Morpace on Day 2. During the discussion, five millennials — without hesitating — answered “No” to the most fundamental of questions: “Would you step foot inside an autonomous vehicle?

Though the response was for some a harsh reminder of the consumer challenges that still have to be solved, the question of trust is not a new one — in fact, a poll released earlier this year by the American Automobile Association found that 73 percent of those surveyed are “too afraid” to enter a self-driving car. This is up 10 percentage points from the year prior, and underscores the biggest hurdle facing AV and ADAS tech — one that cannot simply be funded or engineered away.

As we listened to the panelists — varying in background, gender, nationality, and age — we were able to pinpoint:

The four most pervasive reasons why
there is skepticism and fear of self-driving vehicles

Trust and Safety

Topping the list is the overall belief that humans remain best suited to command the driving experience. They readily cite the isolated instances of accidents involving self-driving cars among the top reasons. In other transportation experiences where much of the process is automated – flying aboard a modern commercial jetliner, for instance – there always is a human who will reassuredly step in, they say, if something goes wrong.

The amount of engineering that underlies the self-driving experience, in itself, should be reassuring to the public. In fact, one audience member, in a fit of frustration, asked rhetorically why these people would “rather trust an Uber driver than a well-engineered AV?” Interestingly, panelists cited the number of high ratings and successfully completed journeys on an Uber driver’s profile as affirmation that they know what they’re doing. Something that is not readily available for autonomous vehicles today but may be required to convince consumers of its safety in the future.

It was compelling to hear this from a group that has developed a “learned trust” – a sort of symbiotic relationship – with existing driving tech. This is a public that would not commute beyond their neighborhood without some form of a moving map (trusting its computer-intoned directions implicitly as they are uttered from the dash or smartphone).  But it’s a group that has also learned how flawed technology can be – how imperfect it is at times. They have coped with taking their new $1,000 iPhone out of the box, only to find it doesn’t work. They deal with daily, inexplicable disruptions of their WiFi service. Because of these experiences, they have learned what the limits are to technology. As a result, they have developed a skepticism – and in some cases even fear – that only seems to grow with every new announcement about self-driving vehicles. This underscores the growing need to build consumer trust with the new technology as autonomous vehicles are continually developed.

 

Privacy

Millennials have had a love-hate relationship with the technology that guides their lives. On the one hand, dramatic improvements in tech have given this group more powerful tools and connectedness than ever; on the other, the personal information input into these devices and sites has been under assault. The specter that AV technology will further abridge someone’s privacy appears to be a deal breaker for those who would rather cruise in relative anonymity.

 

Hackers and Bad Actors

All the engineering in the world, said these panelists, cannot correct for the mental deficiencies of those who wish to illegally subvert the technology, or use it for harm. Fears include hacking of cars to disable features, or to use them for nefarious purposes; or some unstable driver inside an AV who uses it to wreak havoc on an unsuspecting public.

 

Liability

Panelists expressed grave concerns about who would ultimately be held responsible for accidents involving AV tech. If I was not steering the car when it hit that pedestrian, why should I be held responsible for the damage inflicted? Sorting out the chain of liability – whether the mobility provider should offer some sort of supplemental insurance for its self-driving technology, or whether the public, through the act of purchasing or renting the car, should remain the liable party – was a clear precondition of their risk/reward decision about this new technology.

 

Given what we learned from a group of smart, articulate millennials, AV manufacturers will need to deliberately guide consumers down the path to a world of autonomous vehicles – on consumers’ terms. Challenges associated with this include: 1) understanding exactly what these terms are, and 2) responding in an empathic manner to meet consumers’ expectations. Conquering these challenges may well represent the Holy Grail between reticence and broad adoption.

At Market StrategiesMorpace, we are working with vehicle manufacturers and technology companies to better understand the human factors that will ultimately lead to a future of new, safe, and widely accepted modes of transportation. If we can be of service, please contact us.

Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

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14
Jul

X, Y, Z … Boom! How will Changing Demographics Impact Corporate Culture?

Are you ready?

By: Donna Taglione, Vice President

Full transparency: I am a baby boomer. Born right in the middle of the largest generation–until Millennials. For many of my generation, retirement is a dirty word; it’s an inevitability to be delayed as long as possible. As a group, Baby Boomers have been fighting aging since we turned 30! After all we weren’t supposed to trust anyone over 30 until, of course, we became 30 ourselves and realized we were just getting started.

All kidding and old jokes aside, the reality is that 10,000 Boomers will turn 65 every day between now and 2029. Retirement has already started for many and isn’t that far off for more than half of the Baby Boom generation. My children, Millennials that they are, are probably saying “Finally! What’s taking you so long?” But the sheer volume of pending retirements is staggering and prompts the question how will the obvious “changing of the guard” affect corporate life?

Demographers and business historians estimate that Baby Boomers currently hold 56% of corporate leadership positions. Additionally, two-thirds of all businesses (about 4 million companies) are owned by Baby Boomers. Yet, according to a survey of Fortune 1000 employers, and of critical importance to business in general, 62% of Fortune 1000 employers believe that Baby Boomer retirements will result in a skilled labor shortage sometime in the next five years. In the next 5 years! How is this possible? What should people and companies be doing to prepare for a potential gap in skills? Are companies and their mid-career managers (Gen X and Gen Y) prepared for corporate memory to walk out the door?

Truth be told, with each generation there is always a need for new and fresh perspectives. Somehow it is a lot easier to swallow that new idea when you are on the younger end of the continuum espousing it rather than on the side that finds itself thinking “been there done that”!  Yet companies and managers are going to have to creatively manage the knowledge transfer required as the current generation of executives makes room for the next generation.

Partial retirement or flexible working arrangements–typically a two-year offer with reduced hours and benefits–is one way companies are exploring the retention of certain levels of management so their knowledge can be shared with those next in line for their pay grade. Reverse mentoring, popularized by former GE Chairman Jack Welsh, matches senior executives with 20 and 30-somethings to share experiences. Reverse mentoring closes the knowledge gap for both older and younger age groups and can identity future leaders. Succession planning prepares others internally to assume key business positions. Encore consultancy – when a person “retires” on Friday yet returns on Monday as a part-time consultant for the job they just left – has caught on in some organizations. Are these enough? Are companies paying attention to what corporate life will be like after a generation of workers retire?

I distinctly remember going to my father’s retirement party. Lots of people I’d never met before talking about a side of my dad that I never really knew at home. It was quite enlightening to hear that your dad–the guy who fell asleep on the couch waiting up for you–was a person others looked up to and respected. I don’t think a lot of companies “do” retirement parties anymore. My dad worked for the same company for 37 years. That kind of tenure is almost unheard of now. When I retire, even though I’ve been in the same industry for over 30 years, I’ll have worked at the same company for about 12 years. Certainly not worthy of a full blown celebration. But party or no party, over the course of the next fifteen years, one very large generation, used to setting standards for how things get done (Baby Boomers), is about to retire and be replaced by an even larger generation (Gen Y/Millennials) in the early to middle stage of their careers. Are we ready?

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29
Jan

How Will Current Economic Conditions and Manufacturers Influence Millennial Car Buyers?

millennial_with_keys

By: Dave Emig, Research Director; Anthony Crechiolo, Market Research Intern

The average price of gasoline in the U.S. has continued to fall the past two years. This past year in particular, the average price of gasoline has fallen from $3.36 per gallon to just $2.42. That’s just over a 38% drop in one year. With many analysts indicating gasoline prices are to remain low into 2017, many wonder what kind of effect this will have on future vehicle sales in the U.S. The answer may lie in how 2015 evolved.

2015 was a record year for automotive sales, coming in at 17.5 million vehicles sold, a 5.7% increase from 2014. Digging deeper, we actually see a drop of over 2% in car sales from 2014 to 2015, while sales of large vehicles were up over 23%. Only looking at these numbers, it seems that Americans have a positive outlook towards the future and are putting their savings at the pump towards a bigger vehicle. This statement may be correct for Americans as a whole, but does it hold true for the next generation of car buyers, Millennials, who are just now entering into the car buying market?

In order to answer this question, I think it is important to first look at how buying a car for Millennials is different than previous generations.

Buying a car used to be a rite of passage to freedom, a way to connect with friends and escape from the parents’ sphere of influence. A car used to give you access to find and define yourself as a young adult. Because of how technology has allowed Millennials to be connected to everything at all times, they tend to break away from their parents’ sphere of influence at a much younger age. However, unlike previous generations, Millennials are entering adulthood at a much later age. Buying their first car still represents this next step into adulthood, but the difference is that this generation has already developed their individual identities before venturing out on their own.

Most Millennials are not entering adulthood until they have completed their secondary education and have found an entry-level job. At that point, they are moving out of the house, figuring out their student loan payments, budgeting daily expenses, putting money away for retirement, and to top it off, looking for a new car. Most entry-level jobs do not provide the income to spend a lavish amount on a vehicle, so Millennials are often restricted to the small or compact car segments because of the limited amount of disposable income they have available.

However, Millennials who are looking to purchase a vehicle have two macro circumstances that make right now the opportune time to purchase a car: low gas prices and low interest rates. There is also the idea, stated earlier, that older consumers’ demand may be shifting away from cars to larger vehicles. This change in demand would keep mid and full size sedan prices low in the short term, but Millennials will likely need convincing to move up from their compact and small car segments.

It seems that Millennials don’t put the same emotion or value on their first car as previous generations have because it doesn’t give them the same type of freedom, as they are already aware of their unique identity. A vehicle to them is more of a machine that serves a functional need – getting them from point A to point B.

But with cars having more connective technology than ever before, will automotive manufacturers use their advertising prowess to convince these first-time consumers that cars can not only keep you connected, but have space for their friends to tag along, too?

Currently, there are hardly any advertisements targeting this group of first time buyers. You see it over and over again, commercials for a mid to full size sedan that emphasize re-kindling that childhood passion. If the idea that the older consumer is shifting from purchasing cars to a larger vehicle is true, it might be time for automotive manufacturers to increase advertising towards the next generation for these types of vehicles. If we see a shift in advertising affordable mid to full size sedans to first time buyers, the automotive industry could continue to boom.

As a result of the recent recession, Millennials feel an increased emphasis on not overextending themselves financially. As you move further along in life and become more financially secure, then you can push your financial boundaries. This trend can be noticed with most Americans; as they move up in their career, they also move up in vehicle class. If automotive manufacturers realize this and are able to persuade these first-time buyers into the purchase of a larger vehicle, they will make more money over time, since this type of buyer moves up the career path more quickly because of their higher starting point.

Will automotive manufacturers be able to persuade Millennials to spend the extra disposable income they have available on upgrading their first car purchase? Or will they just accept that first-time car buyers will come in at a lower vehicle segment and spend their extra dollars on other technology that will continue to make their lives more connected? The future of the automotive industry is in the hands of Millennials—the next generation of savvy consumers.

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3
Nov

What Would You Tell Your Younger Self?

what-would-you-tell-your-younger-self

By Donna Taglione, Vice President

A recent project reminded me that we all learn from our own life experiences. Earlier this year I moderated a series of focus groups with people who had retirement investment products – Roth IRAs, 401Ks, and brokerage accounts. These groups were segmented demographically by age.

Some groups were with people in the early phases of their career trying to balance retirement savings with new house purchases and babies. Others were mid-career, worried about their own savings but mega-concerned about how to save for their children’s college education. Still others were divided into two categories – five years away from retirement and those recently retired.

The most interesting question I asked during these sessions was “what advice would you give your younger self?” Having listened to some heartfelt responses across the groups, and having read posts in the Huffington Post, on the BBC, and even E!Online, all of which asked versions of the same question, I decided to do what market researchers do best and ask a broader group – our staff – the same question.

Generationally, we have all the major demographic segments covered at Morpace: Millennials (1982-2004), Gen X (1965-1981), Boomers (1946-1964), and a few on the youngest end of the Greatest Generation (1930-1946).

What I learned was interesting…

My financial focus group participants overwhelmingly advised “don’t underestimate the power of compounding,” not surprising given the topics we covered. In other words, invest as much as you can beginning with your first job – you won’t miss money you don’t see. It was their version of the Ronco advertisements touting “set it and forget it!”

The overarching theme from my Morpace internal query was gratitude. Regardless of age, Morpace employees advised their younger selves to appreciate what they have in the moment. This appreciation might be for something as simple as free time – the ability to come and go as one pleases before the demands of a job, a partner, and/or children. It certainly includes appreciating family, especially grandparents since they love nothing more than spending time with their family.

Directly linked with gratitude was kindness to one’s self and others. Kindness includes not only being nice, but standing up for those that are picked on. Most everyone can recall a middle school or high school group that left them feeling excluded and, with the wisdom of hindsight, realized maybe the “cool clique” wasn’t so cool after all.

Gratitude and kindness were followed closely by versions of “this too will pass.” There is an old expression – the rearview mirror has 20/20 vision – meaning everything is clearer when you can look back on it, when the drama of the moment is replaced by perspective. Several mentioned learning the benefits of patience – patience to let dramatic situations play out without jumping to conclusions – of learning to pause, reflect, and wait before judging a person you barely know.

Confidence and trusting one’s own instincts are important pieces of younger self advice. We must learn to own our decisions – the good, the bad and the ugly – acknowledge what happened, and move on. Things are not always someone else’s fault.

Interestingly, there is a longing for some youthful chutzpah. Moving away from home – you can always come back. Trying a different career. Taking chances. (I loved this one: “Dye your hair the funkiest color imaginable. If you wait until you’re in your 20’s to do it, it won’t fit with your job. And if you wait until your 80’s, people will think you are senile!”)

Our collective advice to our younger selves was to be less concerned about failing and become more fearless than fearful. We’d all be wise to think like Thomas Edison: “I have not failed. I’ve just found 10,000 ways that won’t work!” – or to remember Henry Ford’s advice: “Failure is simply the opportunity [emphasis added] to begin again, this time more intelligently.” Whether financially, as in my focus groups, or in life, fearing less seems to be good advice regardless of age. Our younger selves might have benefited from that advice, but our current selves can too!

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