According to consumer research from Cox Automotive, automakers may face challenges if they expect to generate significant revenue from subscription-type features, also known as Features on Demand (FoD).
In a new study titled “Software Monetization: The Emergence of Vehicle Features on Demand,” the Cox Automotive Research and Market Intelligence team explores the trend toward offering vehicle features through subscription-type services.
Research shows Automakers may face challenges in making significant revenue from subscription-based vehicle features.
“Our initial research indicates that the transition to Features on Demand will be an uphill battle for many automakers,” said Vanessa Ton, senior manager of market and customer research at Cox Automotive, who helped lead the research project. “In the market right now, there is low consumer awareness and some skepticism on the part of shoppers. To gain consumer acceptance, automakers must ensure consumers perceive subscription-based features as a good value and not just a money-grab.”
Study Finds Low Consumer Awareness, Need for Strong Value Proposition and Desire for Free Trials
The research showed consumer skepticism, as three out of four respondents agreed with the statement, ‘Features on Demand will allow automakers to make more money.’ Further, 69% of respondents indicated that they would likely shop elsewhere if certain features were available only via subscription.
The study revealed areas automakers should address when developing a Features on Demand strategy.
Low awareness: The study suggests that understanding of Features on Demand is still very low among shoppers, with only 21% of in-market shoppers familiar with the concept. However, 41% indicate that they are interested in Features on Demand.
Perceived high price: The research also shows that, at least initially, most shoppers (58%) expect an FoD approach to be too expensive, and there are concerns about data security and privacy.
Free trial periods:…
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