A new journey: Shifting from dealer-centric to customer-centric selling

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Slumped in a seat, drinking her third cup of low-grade complimentary coffee, the customer glances at her watch to see that nearly 45 minutes have passed since she first arrived at the car dealership. As she flicks through her Facebook feed, one of the employees calls over to assure her that ‘Dave’ is on his way.

When Dave finally arrives to greet the car-buyer, he comes with news that some of the specifications she requested are not currently available, and that there are extra charges for the particular in-car entertainment system she has requested. Oh, and the car itself will not be ready to pick up for another week due to a mix-up at head office.

Such a frustrating scenario is drearily familiar to many UK car buyers. In a marketplace where consumers are increasingly able to set the terms for their shopping experience, the car buying process has remained resolutely rooted in the adversarial negotiation rituals of old.

Car companies created sales and marketing structures to fit the so-called purchase ‘funnel’, wherein consumers steadily whittled down the number of brands under consideration. However, the introduction of digital, mobile and social media communications is widely considered to have rendered this method obsolete. McKinsey, for instance, advocates a ‘circular’ model with a ‘loyalty loop’.

Digital technology is key to creating a purchase journey that matches changing consumers’ behavioural habits. Take the initial ‘discovery’ phase: as with almost all large-scale purchases, the bulk of preparatory research carried out by customers has moved online, and in particular to mobile devices.

According to a 2014 study by AutoTrader.com, buyers of new and used cars spend three-quarters of their product search time online, up from 62% in 2011, while the figure rises to 82% for the younger Millennial generation. On average, buyers visited nine websites per purchase, and two-thirds arrived at the showroom knowing exactly which model of car or van they wished to buy.

Google has encountered a similar pattern. In its 2013 automotive report, the search giant found that buyers in the market for a new vehicle encountered an average of 24 digital touch points, including review sites, online videos and social media feeds. Nearly half of respondents (42%) checked the price of vehicles using their smartphones in the weeks leading up to a purchase, while 36% reviewed the description of a model. A mobile-optimised research experience is vital.

Consideration

Once consumers have reached the next ‘consideration’ phase, they must be offered the right tools to find the right product. Auto brands have spent large sums in optimising websites to work across devices, and boosted the sophistication of digital marketing campaigns, all of which is well-received by consumers. If anything, they should go further.

Analysis carried out last year by management consultancy Arthur D. Little said that 60% of consumers view interactive configuration tools, allowing users to select combinations of colour and accessories, as “very important” to the decision-making process.

Technology can also be used to enhance the one-to-one contact between brand and consumer in the real world. Rather than expecting people to go out of their way to visit a showroom, Hyundai brought the showroom to one of South-East England’s busiest shopping malls, Bluewater in Kent.

The Rockar Hyundai ‘digital automotive retail experience’ entices people as they are shopping for new clothes and gadgets, offering an immersive Apple Store-style experience. Around 500 people now pass through the outlet each day. Crucially, the majority (54%) of visitors have also been female, while the new showroom has also resulted in a 92% conversion rate to the brand.

Trial

Once customers are ready to ‘trial’ the product, car companies should look beyond the ritual of the test drive. As outlined in the feature on the future of automotive retail, Audi has invested significantly in virtual reality services for its chain of inner-city showrooms.

With the smaller floor space only able to host three or four actual cars, the Volkswagen-owned brand uses digital technology to showcase its range of products, as well as how they may be personalised. This “showroom in a suitcase” could eventually be brought to people’s homes and places of work, eliminating the need for consumers to visit dealerships at all.

Purchase

Despite all these improvements to digital experiences in the early stages, there has been a distinct dearth of innovation around the ‘purchase’ phase of the consumer journey. Indeed, market research provider Frost & Sullivan claims that, even by 2020, only 5% of cars will actually be sold online.

There is undoubtedly a growing willingness to buy cars through the internet. Consultancy firm Capgemini found that 28% of UK consumers see themselves as ‘likely’ to purchase a vehicle online, up 4% year-on-year. That figure trails the willingness found in markets such as the US (34%) and China (61%), suggesting the viewpoint is likely to become more common.

Buying online for used cars has gained greater traction in recent times, and start-ups are seeking to find ways to make it easier and more secure for customers. Apps such as Vroom and Beepi have created online marketplaces for US drivers to buy and sell, with investors taking a keen interest in the trend – Vroom, for example, raised $54m in a fundraising drive this summer.

Just as online marketplaces like Amazon and eBay have become trusted intermediaries between buyers and sellers, intervening when necessary to resolve disputes, the apps promise to inspect all vehicles before reselling them. They also allow users up to 10 days to decide whether they are happy with the product, or wish for a full refund.

Entrenched new car sales channels and networks have prevented manufacturers from fully committing to ecommerce, while the modest success of previous UK upstarts Virgin Cars and Jamjarcars has also added caution to online strategies.

A new UK business, called Carwow, is positioning itself as the Expedia of the automotive sector. Carwow helps users to choose their preferred car, and then passes the lead on to 1,000 participating dealerships to seal the deal. It eliminates the need for onerous negotiations, although requires users to interact directly with traditional automotive retail outlets.

Ownership

Once the purchase has been completed, a new consumer journey begins, with judgements being made about the quality of after-sales service.

As we observe in the next feature on the future of car ownership, mobile apps can be used to enhance the consumer experience and encourage a greater level of dialogue between driver and car maker. Digital services offering maintenance and support will help foster loyalty and boost the brand when the consumer is ready to purchase a new vehicle.

Car buyers have grown accustomed to feeling in control when shopping, be it online or in a physical store. Yet, when it comes to buying a car, the actual purchase is still largely determined by how car companies want to do business.

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Rather than hoping to augment existing retail networks with websites and apps, motor brands are realising they must fundamentally transform the way they sell to consumers. By combining digital innovation, including enabling direct online sales, with a more consumer-centric approach to real-world retail, automotive companies can generate the same brand love and loyalty enjoyed by other technology firms.

The product is not the problem. Offer a new buying and ownership journey around ideal needs of consumers, and increased sales will undoubtedly follow.

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