Episode 159 - The Future of Autonomy is Consumer Experiences

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Imagine flying into Milan, Italy, and being greeted by an autonomous vehicle that secures tickets to see Leonardo da Vinci's The Last Supper and provides a visual history of the artwork on your drive to the monastery of Santa Maria delle Grazie. This type of priceless experience is the future of autonomy.

With leisure and travel spending up in recent months, Grayson Brulte, Host of SAE Tomorrow Today, discusses the growing importance of the consumer experience and the role that AI and autonomous vehicles will play in this new landscape.

Have your own thoughts on this topic? We’d love to hear from you! Share your comments, questions or ideas for future topics with Grayson on Twitter or send them to podcast@sae.org. Don’t forget to take a moment to follow SAE Tomorrow Today—a podcast where we discuss emerging technology and trends in mobility with the leaders, innovators and strategists making it all happen—and give us a review on your preferred podcasting platform.

Our Host


 

GRAYSON BRULTE
Innovation Strategist & Co-Founder, Brulte & Company
 

Grayson Brulte is an autonomous mobility advisor and consultant who provides strategic counsel and political insights to help clients navigate what’s next.

As an SAE strategic partner since 2017, Grayson brings his in-depth industry knowledge to host SAE Tomorrow Today. His unique perspective factors in economics, politics and technology into one-of-kind weekly conversations with innovators changing mobility and its impact on society.

Grayson is a thought-leader who regularly provides insights to publications including Bloomberg, Reuters, The Financial Times, Wall Street Journal, The Los Angeles Times, Hollywood Reporter and Forbes. His written opinions and insights have been featured by organizations including the Consumer Technology Association in presentations to the Federal Trade Commission.

Transcript:

Grayson Brulte:

As humans, we enjoy experiences.

Those who drink wine, enjoy a great glass of wine with friends over a lively Conversation. Those who like to race cars, enjoy the day they hit the track. And those of us who enjoy to travel and see the world are always looking for our next adventure.

It’s these experiences and more that drive us to spend our hard-earned income. We want to experience something, we want to feel something, we want to smell something, we want to be a part of something.  And this is exactly what is happening in the U.S. economy. In March spending growth grew 3.3%.

This growth was driven by experiences and dining. When we eat at a restaurant, that is an experience.  A restaurant is where we go for a great meal or to celebrate a birthday or a special occasion. Restaurants are a part of our experiences DNA. Some even travel the world to experience something new. Take the Noma for example, Noma which was the #1 restaurant in the world based in Copenhagen, Denmark. Now that they have closed their doors, they have opened a limited time pop-up in Kyoto, Japan. The price for a meal, if you were able to reserve a reservation, $820 per person for the combined food and drink pairing. Not including travel. Dinner for two is over $1,600, but the experience is priceless. Priceless experiences are what is driving leisure and travel spending which are up collectively 24.4% and 18.2% as compared to February 2023.

Ling Hai, Co-President for APAC at Mastercard said in a recent interview with Bloomberg that Mastercard sees “a clear shift” in Chinese consumers, who are now spending more on experiences like dining and traveling instead of buying items. Is this a short term trend or is this a sign of things to come?

I believe that this is a sign of things to come and it will only be accelerated with the scaling of robotaxi’s in multiple cities around the world. When you ride in an autonomous vehicle for the first time, it’s an experience. On the second ride, it’s boring, it’s no longer an experience, it’s a utility. It becomes Uber, a simple way to get you from point A to B.

Are Robotaxi’s profitable today, no. Will they be tomorrow, yes. But will there margins be slim, yes.  How do you change this, introduce an experience layer and up-charge the passenger for the experience Imagine being able to ride to a Miami Dolphins game in an autonomous vehicle with Dan Marino, that’s an experience and that is something that consumer will pay for.

Or imagine riding in an autonomous vehicle to a concert to see your favorite band and not having to wait in line to park or drive home after drinking during the conference. Good perks, but not great What would make this a great experience is by adding augmented reality to the experience and having the vehicle become a rolling concert experience with exclusive footage and music that you have never seen or heard before. This consumers will pay for. Consumers will pay for experiences, brands and conveniences.

This is the strategy that Chris Squeri has implemented at American Express. During the depths of the pandemic, he raised the annual fee for the American Express Platinum Card to $695 from $550. A bold move in a time of limited spending, but it worked as American Express grew revenue and its stock price increased 20.31% from January 2020 to today.

No small feat for a company that underwrites risk and is heavily dependent on spending. What American Express is a lifestyle brand. It’s a brand that consumers around the world aspire to become a member.  You do not “have” an American Express card, you are a member. When you become a member, you are a part of the club. And being part of the club comes with its own perks such as Centurion Lounges.

At airports to a private dining club Centurion New York. In the future these perks will come with exclusive autonomous vehicle experiences. It’s not just American Express that will be able to leverage autonomy to create experiences, global vertically integrated brands such as Louis Vuitton will benefit Louis Vuitton or LVMH as the group is called is not a fashion house, it’s one of the world’s best run companies.

Mr. Bernard Arnault knows how to channel your wants, desires and needs, while wrapping them into a package that you will pay a premium for. Why, you want the experience. You want to be associated with the brand. You appreciate the craftsmanship. But more importantly, you want to live the LVMH lifestyle.  This is where autonomous vehicles come into the picture. LVMH owns, Belmond and Cheval Blanc, both companies own some of the most exclusive hotels in the world from the Cheval Blanc St-Barth Isle de France to the Splendido in Portofino, Italy.

Both destinations are exclusive and both destinations are built around experiences. Now factor in autonomous vehicles. Imagine just arriving at SBH and being picked up by an autonomous vehicle that was designed by LVMH with the look and feel of the LVMH lifestyle?

In that vehicle, you would have your choice of a bottle of Krug or Dom Perignon to sip for your 10- minute journey to the mansion. Both Krug and Dom Perignon are owned by LVMH. LVMH is vertically integrated. Let’s take this one step further and offer you the opportunity to purchase an exclusive handbag that you can order while riding in the vehicle in Saint Barths?

You get the experience, you get the bag, you win. The house, they always win after all. That ride you just went on has a profit margin over 46% and it was built into the price of your room at 2,000 euro’s a night.  The bag, you paid 10,000 euro, the house, LVMH is this case made 4,000 euro. What this becomes is this the most profitable autonomous vehicle ride in history. These are margins, yet the price does not bother you as this was an experience. This was a once in a lifetime experience. That can expand as you travel the world with the brand.

Staying at Splendido in Portofino, Italy and flying commercial, you will most likely land in Milan for the roughly 1 hour and 30-minute drive to Portofino. But upon arriving in the vehicle, you ask the car to take you to see the Leonardo da Vinci's The Last Supper.

No problem, the car secures your tickets and drives you to see The Last Supper, while the car windows are augmented with a visual history of Leonardo da Vinci narrated by Walter Isaacson, all powered by AI.  This is an experience, this is the future, this is where we are heading. In the future autonomous vehicles will become an experience that consumers will demand.

It’s not just the high-end luxury experiences that will benefit from autonomous vehicles, it’s also the amusement park business. Sometime in the future, a family landing at MCO (Mickey’s Corporate Office) in Orlando will be able to summon an autonomous vehicle with a tap of a button in their Disney App.  The family will be able to choose their experience from predetermined preferences and then away they go…

Goofy, Mickey or Minnie could even drive the car. It becomes an experience. It’s an experience that you would pay for and one day will be able to pay for. The future of autonomy is experiences. It will be fascinating to watch as companies develop the future of experiences and the role that autonomous vehicles will play in those experiences.

If you enjoyed this SAE Unplugged, follow me on Twitter @gbrulte or send a note to podcast (at) sae.org, We look forward to hearing from you.

 

 

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