SHOPSMART AUTOS – CUSTOMER INFORMATION – APRIL 7, 2021
How digital is changing the automotive customer experience In retail, consumers have come to expect a swift and seamless experience online from beginning to end (and beyond the point of purchase). This is what’s known as ‘the Amazon effect’. Car manufacturers (sometimes called original equipment manufacturers or OEMs) and dealerships have struggled to adapt to the complex demands of digitally-savvy consumers. The experience of visiting a car dealership does appear somewhat alien compared to the ‘see it, buy it’ nature of other types of retail. Of course, digitisation of the purchase journey is not the only thing that has disrupted the automotive industry. Environmental concern, the move towards mobility, new finance products, and the technology in the cars themselves have also changed the way consumers perceive and purchase cars. According to the Society of Motor Manufacturers and Traders, UK car sales saw the biggest decline in 2018 since the financial crisis 10 years prior. Germany’s Center for Automotive Research has also forecast global car sales to fall to 79.5 million in 2019, down from 83.7 million last year. In order to succeed in a challenging market, automotive brands now have no choice but to adapt to changing consumer expectations. This briefing will cover how automotive brands are innovating the customer experience (CX) through digital technology, and the trends that look set to impact the industry in future. Transition to online selling Today, more and more consumers are beginning to expect the digitisation of car-buying services. However, due to the complex nature of the sales model, there can be vast differences in the digital transformation priorities of manufacturers, dealers, and third-parties, resulting in a lack of alignment (and implementation of digital services across the board). According to Deloitte, “whereas manufacturers are investing to create omnichannel customer experiences, dealers are more focused on tactical solutions that integrate disparate data systems to ease information flow across the dealership.” However, both OEMs and dealers are selling online. And features that streamline the purchasing process online – such as transparent pricing (which show add-ons from the start), e-signing, and financing options – also help to elevate CX at all touchpoints. Hyundai’s ‘Click to Buy’ website was launched in 2016 and allows shoppers to buy or lease a new Hyundai. The platform includes functionality to provide part-exchange valuations, configure a new car, apply for finance, pay a deposit, see local dealer offers, and then pick up from a dealer or have the car delivered if paying online. PSA Group – the manufacturer of Citroën and Peugeot vehicles – also introduced the ability for customers to buy cars online in 2017, swiftly followed by the option for credit checks, financing, and the trading in of older models. Others have followed suit, with some even going online-only (if only briefly). Earlier in 2019, Tesla, the pioneer of a direct-to-consumer model, announced that it would be moving all of its sales online, removing the option to buy cars in showrooms entirely. While it has since gone back on its decision to shut all showrooms – raising prices in order to keep its branch model open (yet still selling via digital-ordering only) — it does point to a wider shift in how brands and consumers now view the digital experience. Namely that digital retail within automotive is a concept that people are becoming increasingly comfortable with. Indeed, Tesla has been allowing customers to reserve cars online for a number of years, and launched a second-hand marketplace in 2015.Omnichannel commerce In the world of dealerships, companies like Rockar are aiming to make online-buying as user-friendly as possible, whilst defending the omnichannel model. The Rockar platform is used to sell cars both online and at its small format stores in shopping centres. Rockar is behind the concept for Ford, Jaguar Land Rover, Hyundai UK and Mitsubishi Motor UK. Consumers can visit stores where product experts are not working on commission basis, and shoppers are assisted in buying from the online Rockar platform (either at home or in-store). Automotive Management Online reported in March 2019 that Rockar claims to have generated 1.6 million store visits, 12,500 test drives and 1.7 million digital journeys during the past five years. Crucially, Rockar is not willing to employ a digital retail experience at the expense of physical car dealerships. In a survey highlighted in EY’s ‘Automotive Retail 2030’ report, 27% of new car buyers consider dealership and salespeople as crucial criteria followed by price and brand. Meanwhile, 58% of respondents said they will choose a traditional dealership over other channels to buy a car even in 2025.
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