Key industry figures discuss how digital is revolutionising the automotive sector
“We’re determined to make buying a car as easy as ordering a pizza” is the noble ambition of USA-based automotive e-commerce business Vroom. They're not alone: manufacturers and dealers are racing to deliver the type of frictionless, seamless experiences their customers are now demanding when purchasing a vehicle.
But delivering on that is easier said than done: the car-buying journey is a complex one, with multiple considerations, dependencies and participants. Friction prevails due to the fact that typically different parts of the journey are owned by different parties: OEMs, dealers, publishers, financiers…
Candyspace have produced a white paper looking at how the sector is meeting those challenges and innovating to create superlative experiences for their customers – with insights from key figures across the industry.
In it, Claire Andrews, Mazda’s marketing director in the UK, discusses the difficulties: “Our biggest challenge is that as a brand we don’t own the experience end to end so it’s really difficult to imbue the same philosophy throughout.”
But at the same time she recognises the need to deliver on the expectations of their customers: “Everyone's hard-earned cash is spent wisely these days so you need to give people not just the product, but also a great experience that’s enjoyable, that they’ll want to come back and do again in the future, and that they’ll want to recommend.”
Bridging the physical and the digital
Digital tools are helping to remove the need for physical interactions in the car buying process – “Simple things like making reservations, down payments or even things like video live chat and a virtual walk around of the car,” says Christian Loeer, Marketing Director, JLR Germany.
Ford, for example, has introduced VR car configuration and Skoda’s AR app allows you to see your potential new car in situ – on your drive, or perhaps outside your favourite restaurant! Mazda, meanwhile, employed AR and VR to enhance the launch of their CX-30.
But there’s also an acknowledgement that right now it’s difficult to substitute feeling and touching the product. “There are limitations for people’s desire to do everything online,” says Victoria Rhodes, marketing manager at a luxury automotive brand. “People do want to see, touch and feel products and there is no substitute for creating a fantastic physical experience.”
So the integration of the physical and digital remains important, so manufacturers are continuing to innovate to smooth the transition between on and offline. For example, DS Automobiles have launched a “Test Drive From Your Drive” service, in which customers can choose to have a vehicle delivered to a location of their choice. They’re given a feature walk-through by a DS Ambassador and then left with the vehicle for 24 hours, after which it’s picked up again.
“We see this as being critical to giving the customers the confidence to go from research to purchase online without having to visit a showroom,” says Jules Tilstone, UK managing director of DS. “And that opens up the possibility of a seamless transition between online to to offline, as and when the customers want to go either direction.”
The data challenge
Data, of course, is critical to the ability to create and deliver superlative customer experiences, but currently data is fragmented, has multiple owners and is being managed using a variety of platforms on both the manufacturer and dealer side. “I don't think the automotive vertical is as advanced as other ones in terms of our ability to use data,” says Claire Andrews. “We are investing a lot in trying to turn all of that data into something that is usable and meaningful. And I think that's the key to unlocking outcomes that enable businesses to thrive.”
At the same time, research shows that manufacturers still have a big job in ensuring their websites drive conversion – with on average only 0.08% of visitors progressing through the sites to book a test drive. Recognising this, Mazda, for example, put an intense focus on this during 2020 and 2021 – particularly with dealerships closed for a number of months – and through improved UX and customer journeys were able to increase conversions by 55%.
They’re one of many businesses that recognise the need for an enterprise-level DXP such as Optimizely, with the ability to deliver personalised and data-driven customer experiences at scale. “The most successful companies will use data to drive the customer experience and to create compelling and powerful journeys for the modern consumer,” says Joey Moore, Senior Director of Product at Optimizely.
Selling direct to consumers
Automotive e-commerce is the topic currently driving digital strategy for most OEMs. Some provide it already and most are working towards it, but there are clear barriers not least: price point; selecting finance; incorporating test drives; delivery; part exchange.
“It will come, but right now the vast majority of our customers are saying not quite yet – they would like to do the research and discovery online along with the physical experience and face-to-face interaction with the dealership,” says Claire Andrews.
The role of dealers is a critical one: “As long as there are multi-franchise dealers, it will be very hard to deliver a seamless customer experience,” says Victoria Rhodes.
One potential route for OEMs to sell direct to customers is the agency sales model. In this construct, instead of dealers taking responsibility for the sale of the vehicles on their forecourts, they become “agents” who act on behalf of the OEMs – and take commission for doing so.
This can help with the all important move towards a more single customer view. CapGemini’s Agency Sales Model report states: “The agency sales model requirement for a single data ecosystem offers strong potential for both OEMs and dealers. Both can participate equally, enjoying access and enrichment of customer data as well as the possibility of gaining new customer insights.”
There is no question that the rapid acceleration of digital tools, systems and processes is enabling OEMs and dealers to enhance the experience of buying vehicles for their customers. That will only continue, with more and more friction being removed through the smart use of technology.
To truly deliver those superlative experiences requires a relentless focus on the evolving demands of customers – and finding the sweetspot where that aligns with the needs of the OEM and dealers’ businesses.
“Customer experience is at the very top of our agenda,” says Jules Tilstone. “Because advocacy is so important in terms of our growth we can’t afford not to be brilliant.”
Claire Andrews adds: “The customer is everything – they have to come first, otherwise why are we all here?”