Big Data represents a huge opportunity for automotive companies. Thanks to increasingly sophisticated analysis, a huge amount of information, qualitative and quantitative, structured and unstructured, is interpreted to extract useful knowledge to identify growth and development opportunities along the entire value chain, from marketing to production, from the aftermarket to after-sales services.

While big data enables much more accurate, secure, efficient, and sustainable production and economic models, managing the scale and complexity of this data still remains the challenge to overcome.

Automotive players must equip themselves with the tools they need to gain full control over all information, whether it comes from external sources like social media or is confined within impenetrable corporate silos. Only in this way can they fully employ it to optimize processes, meet customer demands, and improve business results.

Before delving into the ways that you can leverage big data in the automotive industry, let’s pause for a moment. What is big data? And why is it such a valuable resource?


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What is big data? Why is it important?

Let’s start off with a definition of “big data” from Gartner: “Big data is high-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation.”

First and foremost, “big data” describes an exorbitant volume of data, both structured and unstructured. The expression is fairly new, but it refers to a much older reality: think about how companies have always had to deal with large-scale datasets and how for decades they used spreadsheets and paper forms to keep track of business and customer information. Now, the difference is that we have the tools and technical expertise to get the insights we need from big data to make more informed decisions based on actual interactions between consumers and brands and their online and offline behaviors. Big data makes it possible to listen to the voice of each of these consumers.

From this “enhanced” listening, which is made possible by increasingly sophisticated analyses, organizations and companies are able extract the knowledge necessary in order to take actions aimed at:

  • making internal processes and structures streamlined and more efficient
  • address timely and effective communications to the outside world. 

What makes big data valuable is its applications and how it provides decisive answers to specific requests. The benefits of its use, in the final analysis, support the various business functions: marketing, sales, purchasing, customer service, and human resources. In short: the enterprise as a whole.


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The big data revolution in the automotive sector: from connected cars to the transformation of the customer experience

Today, through the connection possibilities enabled by new technologies, cars “talk to us”. While we have already had access to information about diagnostic tools and vehicle performance for some time now, so much so that it seems like “old history” to some extent, the near future, which is increasingly close at hand, sees the integration of this information with information from the road, i.e. from the surrounding environment (urban contexts, long-distance roads, etc.) and from the driver (preferred driving conditions, the need for specific services, preferences on the type and frequency of multimedia content, for example), provided in real time and with greater accuracy than ever before.

To have access to this information, in the form of both structured data and unstructured data: the big data we just talked about – more and more vehicles are already equipped with sensors and connectivity solutions that are natively integrated. It’s IoT applied to automotive: connected cars provide a constant stream of data about the vehicle, engine, driving behaviors, and environmental conditions. 

Having managed to extract meaning from this mass of heterogeneous data – which is being produced at incredible speed and volume – the challenge is to leverage it to be able to offer automotive companies – automakers, original equipment manufacturers, dealers – an integrated, real-time view on the performance of different vehicle systems, under specific driving and environmental conditions. 

Now, let’s look at the 5 applications for big data in automotive that promise the greatest benefits.


1. Connected and automated cars

The technology that makes our cars connected and automated is already a reality. We’re not talking about autonomous driving, which has seen stops and starts in recent years, mainly due to legitimate concerns about privacy and security, but about the connection possibilities that allow a car, through internet access, to communicate bidirectionally with other systems outside the vehicle.

Thanks to connectivity and thanks to the IoT, cars can already be connected in real time to a real ecosystem within which the possibilities of communication between customers, manufacturers, administrative bodies, and institutions are destined to increase exponentially.

The data emitted and received from the vehicles is processed to improve their functionality:

  • automatic updating of maps
  • choosing the best route
  • adjusting air conditioning according to weather conditions
  • analysis of engine efficiency
  • use of multimedia content and updating music playlists

Through connected cars, automotive companies are able to monitor engines, update software, and control powertrain performance, even remotely, and with reliability and safety.


2. Careful, punctual, and decisive maintenance

Any interruption in the production process represents a loss of turnover for a company, which is often considerable: a deteriorated, damaged, or broken machine determines not only the missed creation and sale of the product, but also additional costs necessary for repairs and disposal of an increased amount of waste materials. The same can also be applied, with due proportion, to individual automobiles: in the event of breakdowns or malfunctions, the inevitable trip to the mechanic can involve a considerable expense and a waste of precious time.

To minimize this risk, companies usually provide preventive maintenance programs: a rather tight schedule of operations necessary to check, repair, test, or replace equipment. During periods when preventive maintenance is scheduled – at set intervals – plant operations must necessarily be suspended. In contrast, a maintenance program that takes advantage of big data is based on the condition of the production line – that is, the actual state of equipment and machinery, recorded and communicated in real time to a centralized system – and is put into action if and when there is a real need.

Similarly, thanks to technological advances, the devices in our cars are now integrated with sensors and RFIDs and are able to actively transmit vital information about variables such as the temperature, oil level, humidity, speed, and traffic accidents. The huge amounts of data generated by the machine are collected, compared, and analyzed according to certain parameters and in relation to the maintenance history. The results of these analysis activities form increasingly accurate and reliable forecasting models for future maintenance.


3. Smarter, people-friendly infrastructures

The use of Big Data in the automotive industry does not only concern cars but also, as we have said many times, the surrounding environment. From the sensors installed in the road infrastructure (cameras, traffic lights, lane markers, road signs, parking meters, etc.) and from those set up by ITS (the intelligent transport system born from the integration of “telematic” knowledge with transport engineering) considerable amounts of information on traffic arrive every moment.

How can this data be used? The possibilities are varied and numerous, and are constantly being defined. In general, they aim to increase road safety. 

Big data can, for example: 

  • enable the design of better organized traffic flows
  • determine where to build parking areas where necessary
  • provide, in areas with many accidents, the installation of traffic lights or traffic signs
  • set up more accurate navigation systems
  • improve vehicle alarm systems to provide early warnings about weather conditions, road construction, or sharp turns ahead


4. A formidable support for Customer Relationship Management activities

Digital technologies and big data analytics play a fundamental role in providing concrete answers to customer requests. Their contribution is decisive in shaping communications between consumers and brands and in facilitating the conversation between potential clients and consultants, ultimately making the entire sales process more streamlined and productive. 

By integrating big data into a CRM solution, automotive companies can predict customer behavior, improve customer service, and manage investments in a rational and thoughtful way.

Marketing and sales have advanced analytics across all customer touch points, including social media, email, the internet, and call center reports, allowing them to more accurately segment customers and base their subsequent initiatives on more complete profiles. This means that trends of different target audiences can be extracted from big data and used to predict their needs and more intelligently directing product development and promotional efforts. 

The customer journey can be long and articulated. It can cross many organizational structures and different information systems. Monitoring every single touch point where structured and unstructured information is generated at any time means gaining a deep knowledge of the user and being able to activate a marketing relationship with him or her that is increasingly closer to an ideal one-to-one relationship.


5. Transforming the customer experience 

Digital is revolutionizing the way customers research, purchase, and maintain vehicles. Even in the automotive industry, customers expect a quality brand experience that is consistent and seamless across all channels.

With big data, automotive manufacturers will be able to find distinctive correlations between the behavioral patterns of different people so they can provide tailored services and 24/7 connectivity. They will be able to develop a unique view of the people who make up their target audience and create compelling and differentiated offers throughout the sales and consumption cycle.

Dealers will be able to restructure sales processes, integrating online and offline modes to enrich the experiences – in-store and virtual –  that they offer to customers.


Customer loyalty: using big data throughout the customer journey

Of the five ways we’ve outlined to leverage Big Data in the automotive industry, the last two — involving consumer relationship management and customer experience — open up extremely interesting prospects for companies competing in the automotive sector. In both cases, the use of data can have a positive impact on customer loyalty to be pursued throughout the automotive customer journey and not only during the purchase phase. After the purchase, in fact, having an in-depth understanding of customer behavior and what determines their eventual abandonment will allow companies to plan interventions that support loyalty, maximize aftermarket penetration, and reduce overall marketing spend.

In fact, thanks to new analytics tools, marketers have the potential to collect and analyze information about customer behaviors and can leverage historical data to make informed assumptions about the levers in their strategies.


The importance of personalized and interactive content

Leveraging the full potential of big data in the automotive industry requires breaking down silos within the organization so as to aggregate internal and external sources (CRM, dealer management systems, demographic data, sales and marketing databases, to name a few), integrate data, and create a unique perspective of the customer.

The next step, which is of fundamental importance, is to use customer data to develop a differentiated content offering that is in line with the value proposition formulated for each segment. For example, think about designing targeted marketing campaigns or creating information initiatives that accompany the user during all phases of the funnel. Personalization of content and interactive functions are critical success factors because they: 

  • allow you to capture the customer’s attention by serving them with truly relevant content 
  • enable immediate interaction
  • optimize conversions 

Content that incorporates the knowledge released by big data enhances its message if it is distributed through multiple digital channels (a separate discussion should be reserved for mobile) or traditional channels (including QR Codes or augmented reality). It’s easy to understand why automotive brands are paying more and more attention to tools that are able to produce interactive, personalized, and multichannel content. Through them, companies can create effective and engaging customer experiences, for example by transforming data into dynamic and responsive videos and microsites that are created and dedicated to each of their customers.