5 Automotive Industry Trends in Customer Experience

April 29, 2020
12:00 am

Let’s face it – getting a new car isn’t something people do on a whim. It’s a big decision made on a high-ticket item and customers are understandably concerned about getting it right. That, combined with the expansion of digital resources, has led to customer journeys that are serpentine, packed with a litany of review sites and personal research that leave buyers far better informed than ever before.

In fact, Google research has shown that automotive purchasing decisions can be influenced by as many as an astonishing 900 touchpoints.

 auto shopping moments

Image source

This is part of a broader pattern of shifting automotive industry trends. And millennials – who will represent more than 45 percent of the potential car-buying cohort in 2025 – are the driving force. As the soon-to-be biggest purchasing demographic, adapting to their needs and behavior is of utmost importance – survival depends on providing them with the best customer experience possible.

Why CX matters in the automotive industry

Success in the automotive industry was traditionally seen as a consequence of a superior product. But despite problems per vehicle more than halving between 2003–2012, retention rates have stayed the same.

So clearly, superior products are no longer enough. And without product as the main differentiator, customer experience is the new king.

A number of factors have contributed to this shift, including:

  • The switch to a digital customer journey
  • Environmental concerns
  • The move towards more flexible ownership models
  • New finance products
  • Advanced technology in cars

But the automotive industry is lagging behind. As soon as the digital researching journey ends and customers physically walk into a dealership, the buyer journey is hampered by archaic sales techniques, vast swathes of paperwork, and a rigidity of approach that wastes time. This simply doesn’t reflect the modern marketplace.

How does your CX strategy stack up?

Take the assessment to find out.

Test your CX >

So, if you’re set on creating a top-notch customer experience for the modern consumer, take on board these five automotive industry trends.

5 automotive industry trends

1. Customers expect omnichannel buying experiences

Although research has become much easier thanks to the internet, customers now expect omnichannel experiences across multiple touchpoints – seamlessly integrating digital and in-store experiences – all the way through to purchase.

The Rockar platform in the UK, for example, sells cars online and in small stores within shopping centers. Product experts do not work on commission, and shoppers are assisted in buying from the online Rockar platform. Although many consumers begin their journey in a showroom, 60% of customers purchase online at home. Automotive Management Online reported in March 2019 that Rockar claims to have generated 1.6 million store visits, 12,500 test drives and 1.7 million digital journeys in five years.

hyundai digital car showroom

Image source:

2. Digital content has become essential

According to a J.D. Power study, automotive shoppers spend an average of 14 hours researching cars online before making a purchase decision. In total, 61 percent of their vehicle shopping time is spent online. So ensuring it’s easy for customers to conduct in-depth research makes total sense.

Honda understands this well. Its ‘test view drives’ video series gives customers an up-close and personal experience of driving their cars by filming from the driver’s perspective. Viewers feel like they are there. A split-screen also gives the option to continue driving or find out more information about the vehicle’s specific features. This immersive content, paired with key product information, is very effective at creating engagement.

honda real view test drive

Screenshot from YouTube

But it’s not just the car itself customers are researching, it’s help and advice for loans and insurance as well. In the UK, AutoTrader launched an online finance calculator in 2018, designed to help consumers work out a realistic budget based on their personal circumstances. To promote it, AutoTrader even ran a campaign called #KnowYourNumbers, enlisting a UK TV personality to front it.

AutoTrader launches finance calculators

Image source

3. Cars are getting more connected

From 2014 to 2015, the number of customers who said they would switch brands for better connectivity features almost doubled, to 37%. In fact, more than a quarter say connectivity is more important than features like engine power and fuel efficiency, and 13% won’t even consider a new vehicle that doesn’t have internet access.

Companies have been keen to capitalize on this trend. For example, in 2018, Ford announced the launch of the FordPass Connect system, an upgrade to its previous FordPass app. The upgrade means users can connect remotely to their vehicle through their smartphone, allowing them to lock or unlock their car, find it and start it, or even monitor diagnostics in real time.

FordPass Connect system

Image source

4. AR and VR are finding their feet

Virtual reality means automotive brands can bring products to life, helping connect the brochure to the showroom, and allowing users to get a feel for the car before taking an actual test drive. Customers can even use the technology to see how they might personalize a car based on their individual tastes before committing to purchasing.

Used-car dealerships such as Vroom are adopting this technology to showcase their range remotely. Physically taking products to customers purely for demonstration purposes is expensive and customers themselves are only willing to travel so far. VR solves this problem – and all without customers leaving the comfort of their own home.

Vroom's virtual reality showroom

Image source

5. Mobility is changing ownership patterns

Our mobility habits will change

Image source

According to Accenture research, by 2030, revenues from manufacturing and selling vehicles won’t have increased much. Revenues from mobility services on the other hand – more flexible models based on needs – will skyrocket to near on $1.2tn. Profits could reach as much as $220bn. And, research by PwC suggests that by 2030, more than one in three kilometres driven could involve sharing. This reflects the shift in attitude towards cars, from status symbols, to simply a way to get from one place to another. Personally-owned transport is being shirked – especially by the younger generations – in favor of mobility solutions like ride-sharing, subscription models, or even rental services.

In response, Porsche launched its ‘Porsche Passport’ service back in late 2017. Customers pay a fixed fee per month in return for on-demand usage of up to 22 different cars. The idea is that customers can enjoy greater flexibility, with the option to switch between different cars based on their needs or desires.

Our mobility habits will change

Image source

How can you go about harnessing these new automotive industry trends?

As an automotive brand, you need to find ways to incorporate these trends into your overall strategies to stay relevant in the future. And that requires real practical steps. You could:

  • Identify and digitize key customer touchpoints. Even small changes can make a difference. Findings from Cox showed that 74 percent of consumers were satisfied with their purchase from the dealership when the paperwork was completed digitally. In contrast, only 65 percent of buyers were satisfied when the documents were completed in-person.
  • Establish an effective customer feedback process. Many manufacturers still opt for long diagnostic surveys that stifle opportunities for open-ended feedback. This is simply out of sync with how customers share feedback today.
  • Experiment with new customer experience ideas. This approach involves identifying winning ideas using A/B or multivariate testing in the form of randomized controlled experiments.
  • Leverage content and tech. Look for opportunities to create interactive and immersive customer experiences that showcase the cars, their features, and their capabilities, as well as the ethos of your brand.

Look beyond the sale

Today, consumers put enormous effort into researching their potential car purchase, and may even be more knowledgeable about the car they want than the salesperson – after all, they have a number of different models to think about.

But, they spend even longer servicing their cars – as much as 50 hours during the ownership lifetime. Retailers therefore need to look beyond the sale. Given that more than half of car buyers return to the dealership website within 90 days of their purchase date, the opportunity is clearly there to create a unique customer experience that builds long lasting relationships. Effectively harnessing automotive industry trends is the perfect vehicle for doing that.


Related Articles