Digital transformation within the automotive industry is typically discussed within the context of delivering an omnichannel sales experience and empowering customers to have a more seamless buyer's journey, whether browsing online or purchasing inside a car dealership. However, mobility service providers are increasingly seeing the immense benefit of utilizing cars themselves to drive transactional models.
According to recent insights produced by Juniper Research, the emerging in-vehicle commerce market, which was valued at just $543 million in 2020, is expected to exceed $86 billion by 2025. At the center of that success is the rise of new voice-powered interfaces that simplify and streamline existing payment processes to allow drivers to easily complete purchases while inside their vehicles.
Since 2014, Apple's CarPlay platform has enhanced the ability to control a car's core functions via an iPhone while also enjoying that same world-class user experience in-car and on-screen. Currently, Apple is looking to build partnerships across the automotive industry to bring the 'Iron Heart' iteration of its CarPlay platform to the next stage of its development.
In 2015, Google entered the in-car platform arena with its Android Auto release. Recently the firm partnered with Exxon, Mobil, Conoco, Phillips 66, and 76 to enable Google Pay at more than 32,000 gas stations in the U.S. The voice-powered interface allows users to say, "Hey, Google, pay for gas" while visiting any of these gas stations to complete an in-vehicle purchase.
Though customers are likely to continue to enjoy in-person retail shopping experiences, there is increasing evidence to suggest that we are likely to see more hybrid retail opportunities in the future. An example of this could be a transaction completed using a voice-powered interface inside a retail brand's app and then stopping by a physical location to complete fulfillment.
Voice Technology is Fueling the Growth of In-Vehicle Purchasing
According to a research report produced by Juniper Research titled In-vehicle Payments: Adoption, Vendor Positioning & Market Forecasts 2020-2025 projects that by 2025 77% of in-vehicle payments will be completed for fuel and electric vehicle charging.
However, as third-party firms continue to forge partnerships, the sky's the limit. It is very likely for people to complete purchases in their cars using voice interfaces in the coming years. It's already happening, and adoption rates are climbing significantly.
"Fuel and charging can be the compelling use case that accelerates the adoption of in-vehicle payments, but to achieve this, industry participants must focus on building collaborative frameworks that boost integration and improve availability," said co-author of the report issued by Juniper Research, Nick Maynard.
Juniper Research believes that the growth of voice commerce will be a significant driving force behind the future development of the in-vehicle commerce payments industry. By 2025, the firm predicts that consumers will spend over $11 billion annually on food and drinks purchased from their cars, up from just $12 million in 2020.
So far, in 2021, voice commerce is responsible for generating around $4.6 billion in revenues for ecommerce companies. As soon as 2023, the market for sales achieved through voice assistants is expected to grow to $19.4 billion. As firms deliver greater convenience to customers and checkout processes become more seamless, voice-powered retail transactions are expected to scale dramatically in the years to come.
"Growing the size and accessibility of the content domain libraries will be critical to increasing the number of transactions processed by voice assistant services. In turn, this will increase the value proposition of voice commerce to third-party retailers and generate new revenue streams for voice assistant platforms," says Juniper Research.
Thus far in 2021, smart speaker sales have increased 35.4% since last year, though Juniper Research predicts a 50% increase by 2023. It seems safe to say that voice technologies are increasingly becoming a regular part of people's daily lives. It is only natural for brands to use these new sales channels to deliver more personalized user experiences.
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If you would like to learn more about what voice commerce can do for your brand, make sure to check out our Voice ROI calculator!
