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Automotive retail is simple: go digital or go bust

It’s time for OEMs to catch up with the financial services and retail sectors, and make online channels work harder – for themselves and their customers, writes Foolproof’s Executive Director, Peter Ballard

The automotive industry has finally embraced the digital experience, and most brands have either launched, or are about to announce, the ability to buy new cars online. But in the race to attract online buyers, it’s crucial to not leave customers out in the cold.

The problem for consumers is that although OEMs may have ‘gone digital’, few have re-engineered the shopping journey to address the many pain points customers encounter when trying to make purchase decisions about their next car.

The issues for consumers do not relate to showroom stock, or fulfilment of online orders; they lie in the lack of support during the buying decision itself, when the majority of customers still do not feel sufficiently in control of the choices and options that manufacturers present in the car buying process.

A recent survey by Auto Trader, a UK-based digital automotive marketplace, found that the majority of consumers, 99% in fact, said they were unhappy with the current car buying process.

Clearly, consumers are more than ready for a change in approach.

Last year’s JD Power survey revealed that millennials accounted for over a quarter of new car buyers in 2015, and this number is set to rise dramatically over the coming years. Millennial buyers have grown up with digital, and bring with them the highest level of expectations for the digital experience, and a preference for subscription-based ownership models.

The automotive industry must take note of established digital practices that are now mature and commonplace in the financial services and retail sectors

Manufacturers that aim to get channels right for this user group will have the best chance of future-proofing their platforms for customers going forward.

Insight generated by Foolproof observing car buyers has highlighted that browsing online and visiting a dealer are not binary choices – consumers expect to do both during their decision-making process. Many even look forward to a trip to the dealer, and make an occasion of it, because they enjoy getting an up close, physical experience of the cars, before making a final choice.

Crucially, what most manufacturers continue to miss is the joining up of the online and offline experiences. Today, too much responsibility for that falls on the customer, asking them to bridge the gap between a website and the dealer.

Customers want to feel in control of the car buying process, and it is here that manufacturers should help them with their research online, empowering them to feel more confident when interacting with a dealer.

A case in point here is Suzuki, a vehicle manufacturer which has taken this knowledge to the heart of its digital strategy. The brand has recently re-launched its UK website to improve the experience customers have with the brand online, and in the transition from digital to the dealership. The OEM understood that customers needed an online experience that would help them make better decisions about the type and grade of car that they wanted to buy, before reaching out to a dealer.

Browsing online and visiting a dealer are not binary choices – consumers expect to do both during their decision-making process

The new Suzuki website works for multiple users, supporting the varying needs of three different potential customer profiles. The first is the buyer who relies primarily on the dealership experience, and appreciates seeing and touching the car, and talking to someone about it; the second, the online shopper, believes the Internet, not the dealer, should provide all of the information to keep them in control of the decision-making process; the third is the multi-focused shopper who likes to mix dealers’ views with independent sources.

Make better decisions faster

Better decision-making for each of these groups lies at the heart of the relaunched Suzuki website. The newly designed site helps customers narrow down their choices to find the car that is right for their needs more quickly, and with more confidence, than before.

During research, customers told Foolproof researchers that they found it difficult to understand the value of buying a more expensive version of their chosen car, when online. Most car websites provide this information over multiple pages, or long feature lists, complicating what should be a clear and easy comparison process. Suzuki has cleverly implemented a side-by-side comparison feature that visually differentiates which key features become available, as the price increases.

It has become clear that overly-complicated car configurators are a major turn off-for many customers. For this reason, the decision to simplify this function was the first part of the design challenge. Suzuki’s new ‘Send to Dealer’ button enables customers to easily send their choices to a local dealer, prior to booking a meeting or a test drive.

Manufacturers that aim to get channels right for millennials will have the best chance of future-proofing their platforms for customers going forward

Not only does this feature bridge the gap between customer and dealer, but it has also improved one of the more arduous tasks in buying a car, namely the test drive booking.

Many commentators have questioned whether the new showrooming approach, trialled by some manufactures in retail outlets, will be the death of the test drive. Auto Trader’s study, however, suggests that test-drives will continue to play an important role in the car buying process: “88% of consumers said they would not purchase a car without test-driving it first.”

However, 80% of consumers also said they would welcome a different test-drive experience from the traditional accompanied test-drive model that predominantly exists today.

In the future, we can expect the booking of a test drive to be as easy as making a restaurant reservation. Customers will be able to book a test drive through their chosen dealer, selecting date, time and model from an online diary.

The future of ownership

Automated scheduling and booking of test drives is one development that will hugely benefit dealers by reducing the amount of time it takes to make booking arrangements with customers. Piloting this new functionality, in addition to continually learning from this initial implementation, will allow manufacturers to pave the way for other future innovation that could use digital channels to streamline the online vehicle buying experience.

For example, car manufacturers are expected to develop more subscription models to help consumers ‘rent’ rather than ‘own’ their car. This will go beyond the traditional personal contract purchase and hire purchase arrangements, and could include monthly subscription fees giving access to a range of cars that customers can book in advance. Date night on Friday? Book the two-door sports model. Carpool to football training every other Wednesday? Book the spacious minivan. Planning a drive on country roads? Book the SUV.

And the winner is…

The automotive industry must take note of established digital practices that are now mature and commonplace in the financial services and retail sectors. These industries have long since discovered the value and importance of experience design, product design, and service design methodologies to help create frictionless, elegant, and truly engaging digital experiences for their customers. The top brands in these sectors understand that customer experience is the best way to differentiate and create a lasting competitive advantage.

Those automotive players that adopt the same principles, as they move in to this improved digital phase, are the ones that will take the lead over their competitors.

 

This article appeared in the Q1 2017 issue of Automotive Megatrends Magazine. Follow this link to download the full issue.