The future of automotive retailing is evolving, once-again, and there are lessons to be learnt from changes in consumer buying trends as well as the successes of the wider retail industry.
In order to remain competitive to modern consumers, it is imperative that dealers have a deep understanding of what the customer of 2020 looks like.
The most vital tool for dealers is data, and having a comprehensive, up-to-date, database with information that allows you to engage with customers at exactly the right time is crucial if you are to best understand your customer. Today’s customer is highly informed, digitally active across multiple channels, expects a seamless experience and a range of choices.
Constant disruption industry-wide means that consumers are used to an increasingly high standard of curation and personalisation. Consumers are so acclimatised to having their needs not only met but exceeded in unforeseen ways, that this has become an ever evolving “new norm”.
The retail industry excels at anticipating consumer needs and making the path to purchase as streamlined and easy as possible, with something as simple as geolocation assisted address help to Spotify curating listening or Netflix gently directing viewing. When the automotive industry is benchmarked against this, or the extremely tactile experience consumers receive from high street retailers, it is evident dealerships have much to emulate.
The consumer’s path to purchase has also changed, with 90% of today’s multiple device owners switching between screens to complete tasks and using an average of three combinations each day. As a result, consumers expect retailers to be ‘always on’ and dealers must follow suit to ensure all touchpoints are synced in order to provide a consistent, engaging experience.
Research conducted by iperceptions shows that almost a third of consumers stop doing business with a brand they love after one bad experience. This indicates that consumers will neither forgive nor forget, and one slip-up could cost everything. Meltwater has also discovered that 52% of consumers are less likely to buy from a retailer because of a poor mobile experience.
With 88% of car buying research carried out online, it is vital is becomes core to the modern retail experience. Consumers want communications to be credible, useful and relevant and retailers to an extremely high standard.
Consumers are also driving three fundamental shifts across the entire retailing landscape, the desire for exceptional technology and technological fuelled experiences, demand for high expectations and businesses to exceed them, and democratisation of modern mobility and accessibility.
Capitalising on these insights, the automotive industry can evolve with the consumer and secure a brighter future by implementing three key tactics.
1) Think as a collective and become partners
A consumer’s engagement with a retailer must be consistent across all channels – essentially a single view that embodies the brand. Automotive manufacturers, retailers and technology solution providers must work together to deliver a better, more cohesive consumer experience. This should involve using the latest innovations and use of data to strengthen these connections for the benefit of the consumer.
2) Map the lifetime value of each consumer - the journey does not end after purchase
By combining consumer data and knowledge of relevant touch points, dealers can have more valuable conversations with consumers at every stage of the car buying and car ownership journey. Dealers must deliver service and value throughout the entire lifecycle of car ownership, as there are valuable gains to be made in the aftersales market, which is all too often ignored based on findings from recent CDK research. It is important to remember that aftersales, and continued communications, are vital to encouraging repeat customers. However, dealers need to focus not only on ‘harder sales’ sales such as VHCs, but also on customer birthdays and more personalised, meaningful communications.
3) Meet consumer’s changing needs
To not only meet but exceed consumer demands, dealers need to offer a convenient and connected experience, seamlessly transitioning between each relevant digital channel and the in-store environment. A better, more personalised digital presence can be shaped from being aware of the latest retail and tech trends, closely aligning with automotive industry leaders while also understanding consumer preferences to provide a more positive and engaging experience. As the modern consumer evolves, the automotive industry must do so in tandem.
- To further examine the lifetime value of consumers and aftersales potential for dealers, as well as the importance of partnerships and working as a collective, CDK Global and AM will be hosting two webinars in 2020. On January 29, the profitability of the aftersales market will be showcased (register here to join it), and the benefit of joining the CDKI Partner Programme will be explored in March.
Author: Marcus Dacombe, international product marketing director, CDK Global