How the internet is changing the automotive industry

Dan Hartill, Performance Marketing Executive - Driver #138

Emission scandals, electric cars, car comparison sites, availability challenges, lorry driver shortages and now an emerging ‘agency model’... who’d want to run a car dealership right now?

The virtual car showroom

The evolution of the internet over the past few decades has had a profound impact on the automotive industry. Long gone are the days where showrooms are the only place to see and indeed buy new or approved used cars. The advent of car comparison sites (think Cinch, Cazoo, Carwow, Heycar, Cargurus etc.) means that for many car buyers, it’s quicker and easier than your weekly grocery shop. In fact, according to a recent survey conducted by Autotrader, 42% of us are completely comfortable buying a car without a test drive or even seeing the vehicle. But this poses an interesting question around the currency of trust.

Reliance on a digital-central sales model

For dealerships who have historically relied on test drives as their most trusted source of conversion, this has to be a major concern. The EV market has also added another layer of complexity too with many networks assigning dedicated resources to deal with enquiries. But perhaps most uncertainty is centered around the so-called ‘agency model’ that’s emerging.  Whilst this isn’t new, OEM and dealer networks are now wrestling with the pros and cons of a centralised sales model run solely through digital channels. According to a recent webinar by Auto Retail Network, the dealership of the future will not sell cars but become the facility for car collection and delivery only, leaving OEM’s (original equipment manufacturers) to control the attraction and conversion of customers.

So what can manufacturing partners and traditional dealerships do about it? We explore the opportunities and offer some guidance for automotive brands to keep their engine running in a forever evolving market.

69% of UK consumers expect to be able to purchase their next car online

Regardless of the size, market share or popularity of the marque, manufacturers will be required to adapt. For all OEM’s, the consumer is always king; they increasingly expect to be able to shop and purchase their next vehicle from the comfort of their own home. In fact, according to a study undertaken by Capgemini Invent, 69% of UK consumers expect to be able to purchase their next car online, with 94% of consumers requiring a seamless, simple, and efficient ordering process.

The Personalised Car buying experience

Unlike the three-tiered sales models of the past, the new agency model should ensure a highly personalised consistent customer experience for the end consumer and this organically supports a customer experience across all channels. In turn, that will build trust but it has to be done properly to keep customer satisfaction high and crucially ensure a higher retention rate in the future… but how?

One way in which this can be achieved is through a high level of personalised communication and support to help build trust between the OEM and consumer. For example, rather than using a generic and often laborious ‘car configurator’ to specify your next vehicle, why not utilise existing car info (simply enter your reg) with lifestyle information to offer the perfect specification? This would bring to life features and benefits in a highly personalised way and streamline the process of stock availability.

With 86% of consumers open to sharing their personal and vehicle data with agents or OEM’s (according to Capgemini Invent) this could become a new industry standard almost overnight.

Adding value to customers experience via digital channels

Irrespective of how we buy our cars in the future, traditional dealerships will still play a pivotal role in the future of car buying. The customer experience related to servicing, warranty repairs, aftermarket sales and even MOT’s, all reflect on the brand value and ultimate trust associated with the marque. But it shouldn’t stop there; the evolution of the digital space has created opportunities for traditional dealerships to add value. If customers want a seamless, simple and efficient ordering process, why not deliver this? An app for servicing appointments, additional products, tyre monitoring or even branded merchandise could help dealers connect more effectively with customers and boost revenue.

An ever-changing industry

Just like many industries under pressure today, the automotive sector is being forced to adapt, and quickly! Due to the constant changes in technology and the digital industry itself, consumer expectations are growing and those who can adapt the quickest will win. So, whether you are looking to step up your technology, improve your email marketing content, develop your website’s capabilities or simply grow your online presence, do it at speed without breaking but always check your mirrors. Alternatively, cab engine can help you do exactly that. Contact us today to help your brand keep ahead of the digital curve through one of our partnerships. From building your marketing engine and driving performance to the next level, cab engine is here to help.

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