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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.
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.
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:
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.
So, if you’re set on creating a top-notch customer experience for the modern consumer, take on board these five automotive industry trends.
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.
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.
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.
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.
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.
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.
As an automotive brand, you need to find ways to incorporate these trends into your overall strategies to stay relevant in future. And that requires real practical steps. You could:
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.