Like most retailers, the automotive industry has been heavily impacted by COVID-19.
With many car showroom doors closed for over three months, it has been almost impossible to go about business in the same way.
Even as lockdown eases, we should not expect a return to normality, though.
A market that was already changing – with increased digitalisation and altered consumer habits – will now be further affected by the economic recession, job insecurity and concerns about the safety of visiting dealerships.
Customer behaviour will be transformed in a post-pandemic world - and we must take this opportunity to innovate.
Customers no longer view the dealership as their only point of contact when it comes to buying a car. In fact, 95% of customers will search for information about buying a car online, spending a large portion of their time on research and identifying the car they would like before they ever set foot in a dealership.
The landscape is changing rapidly, and the automotive industry must adapt to better serve their customers in this new digital world and use the lockdown as an opportunity to innovate.
Closing the gap
This means closing the gap between the increasingly polarised stages of buying a car.
Many customers are still unwilling to make such an important investment before viewing a car in person and testing it, yet there is no industry-standard way to match the wants and needs of a customer researching cars online with their in-person counterpart, and vice versa.
In a situation where 72% of customers would visit dealerships more often if the buying process were improved, and sales could rise by 25% if the retail experience became better, the automotive industry must act now to optimise the process, drive sales and better serve their customers.
Central to this is making better use of a resource already at their fingertips – data.
Enhancing use of data
Safe, secure and GDPR-compliant use of data has the potential to enable brands to generate valuable insights that benefit both themselves and their customers.
Through enhancing the way they use their data, automotive retailers can show their customers the cars most relevant to their preferences, reducing the time and hassle spent on finding a car and thus improving revenue.
For example, insights developed about in-store engagement among a certain age demographic can be applied not just in store, but also online; through reaching this demographic on their websites, dealerships are able to provide a more personalised service to their online browsers and improve the chance of a sale.
Collaborating for success
But the biggest opportunity to drive shorter sales cycles and higher quality customer interactions may be from a special type of data that most dealerships do not have access to: partner data.
Partner data comes from other businesses that often co-market with, but don’t compete with, the automotive manufacturers themselves.
These could be sponsored sports and racing teams, or even retailers like Sainsbury’s.
Data connectivity can enhance customer knowledge. However, partnering companies need transparency and privacy controls in place to build trust and create better customer experiences.
If core automotive buyers are flocking to cricket matches on TV, start a local advertising campaign targeting Old Trafford for Manchester United fans.
If you are getting data signals that more of your key audience is willing to accept financing but is hesitant to make large capital purchases in this time of uncertainty, start highlighting easy leasing rates with quick approval stations in your main showroom.
If a new-fangled 3D TV becomes popular, start offering these as special incentives for new car purchases of slow-moving inventory.
This level of consumer engagement — targeted, appropriate, appreciated — can provide effective differentiation in a flattened landscape where consumers can research every aspect of the car experience, from purchase to maintenance to value depreciation.
And new marketing technologies are being deployed that are aimed squarely at this opportunity to secure and analyse privacy-first automotive partnership data today.
The future of the industry
Decades ago, automotive partnerships were unheard of. Today, we read about the latest news from Renault/Nissan/Mitsubishi, or from Fiat/Chrysler, or from auto tech partnerships like Honda/General Motors.
In the future, it may well be the data partnerships between automotive businesses and non-automotive businesses that will be the most significant of all, as they will create the foundation for successful consumer engagement, for effective prospecting and communication, and for widening the awareness and personalised appreciation of automotive brands.
COVID-19 has undoubtedly affected the industry, but in many ways it has only highlighted underlying issues of fragmentation that were already forming long before lockdown began.
Through harnessing technology and making better use of the data already at their fingertips, the automotive industry can collaborate, bring value to their businesses and not only survive the impact of the lockdown, but emerge stronger.
Author: Vihan Sharma, European managing director, LiveRamp