Customer Experience Joseph Lanners's post
How the automotive customer experience will evolve in 2019
FEB 11, 2019
A wise man adapts himself to circumstances, as water shapes itself to the vessel that contains it. --Chinese Proverb
Who doesn't love a good quote? This one in particular seemed appropriate as I considered the year ahead for automotive retailers. There is no denying that the automotive industry is in the midst of significant change. With the introduction of new technology, and new consumer trends, the car buying process for both buyers and sellers is rapidly evolving. Now that 2018 is closed 2019 is upon us, and many automotive retailers might be wondering what trends will reshape the industry over the next few years as we rapidly approach 2020.
In this article, we will look at the evolution of the car buying process, how it compares to the Consumer Packaged Goods (CPG) buying process, and how consumer expectations will shape the automotive customer experience. In the long term, these trends have the potential to become the new standard. Those dealerships that get a head start on both preparation and implementation of strategies will benefit for decades to come.
Retail Customer Experience: CPG Retail vs. Automotive Retail
To better understand the trends that are reshaping the automotive buying experience, you must first understand the current dynamic of the traditional Consumer Product Goods (CPG) retail buying experience. The traditional consumer retail experience for items such as clothes, food, toys, and more is heavily investing in the integration between the online and in-store experience. Consumer retail is moving in the right direction and building towards creating a more tailored consumer experience from start to finish.
For example, today's savvy consumers typically complete their entire buying process online. They go online and research the product, compare reviews, and in some cases can design a custom version of the products and services they are interested in such as an athletic shoe, a pizza, eyeshadow palette, or handbag. From here they are able to save their shopping cart for later use or immediately check out with the options of (hopefully free and fast) home delivery or in-store pick-up. Customizing your purchase is easy even though there are thousands of combinations. Examples of these fast and free solutions are evident at companies like Adidas, Dominoes, MAC Cosmetics and Coach.
The automotive retail experience starts similarly but breaks down once you leave the digital experience and walk into a dealership. The buying process is bogged down with old sales techniques, a mountain of paperwork, and an inflexible model that forces buyers to waste time and effort they would rather spend elsewhere. This model is incredibly ineffective, especially considering that 69% of dealership website visits consist of actual car shopping activities (Autotrader). Addressing these pain points will make dealerships more relevant in today's market. That's why accounting for consumer pain points in the automotive buying process is one of the most significant trends of 2019.
Consumers Expect a Seamless Buying Experience
Consumers want their auto purchasing experience to match their retail purchasing experience. Car dealerships are starting to address this trend by integrating tools into their dealerships that ease the transition from the digital experience to the in-store experience. However, while most consumers want a smoother transition from digital to in-store, the preference of consumers can vary when it comes to what type of experience they want. Some customers prefer a consultative experience, where the dealership sales representative engages the prospect with provoking questions and provides them with the insight and information necessary to make an informed decision; this is a more traditional approach.
Other customers prefer a self-service model, where they do the research themselves, select the type of automobile they wish to buy, then pick the car up at their convenience. Unfortunately, the automotive industry has not been able to effectively and consistently integrate self-service technology throughout the customer journey.
Forward-thinking automotive retailers are taking steps to digitize the entire buying process through digital signage, interactive kiosks, and loyalty programs. All of these efforts are centered around creating a true omnichannel retail experience that not only eases the path of consumers from touchpoint to touchpoint but also engages with them every step of the way. This extends through the F&I process, a critical and often overlooked point in the car buying process, as well as post purchase add-ons such as maintenance, extended warrantees, anti-theft protection, tire and wheel packages, etc.
In today's market, data is everything. Information allows brands and retailers to create a curated shopping experience that will provide more convenience to shoppers, which results in more ROI. Consider this: more than half of car buyers return to the dealership website within 90 days of their purchase date, likely in search of more information about their recent big ticket purchase. Dealerships can capitalize on this opportunity to remarket to these customers by showing them tailored add-on suggestions according, such paint or fabric protection on a luxury vehicle. As the automotive retail industry moves into 2019, there will be an increased focus on seamlessly connecting the in-store and digital experience while also interacting with consumers and meeting their expectations.
Dealerships Close the Sale
In days past, potential buyers would go to the dealership looking to be educated by sales personnel on which automobile might be right for them. In this old model, there was an inherent amount of trust between the salesperson and the consumer. Today, the consumer goes to the dealership having thoroughly researched their potential purchase, sometimes having more knowledge about the car they are interested in than the salesperson selling many different makes and models of vehicles. Since the research phase has moved online, it’s now up to the dealership to close the sale in a memorable and engaging way.
2019 looks to be the year where many dealerships face up to the new dynamic in the buyer-seller relationship. Due to this changing relationship, advertising and selling will need to change. OEMs realize that they will have to work with their franchise dealerships in new ways while personally-owned dealerships are already beginning to implement some necessary changes to their dealership experience. One dealership installed large digital display in their dealership which show, in real-time, car servicing processes on the users vehicle, including car inspection, oil-change, tire rotation, and more. While this is just one example, these types of innovations make visiting the dealership an enjoyable, interactive experience.
The dealership needs to be a place where automotive customers feel comfortable spending time. Providing comfort items like snacks, beverages, and lounge furniture to sit on is just the beginning. Automotive retailers’ goal is not just about getting the consumer to buy a car. Dealerships need to create a unique customer experience that makes customers want to come back for future services and second or 3rd vehicle purchases. As the first place consumer get to physically experience your key offering, the dealership sets the standard for their overall impression of your store, enabling you to better position those strategically important, high margin add-on services.
The digital customer experience is changing how we interact and buy goods and services. Automotive retailers can learn from CPG retailers to be embrace change and be open to evolving. Regardless of industry, all retailers must move towards an omnichannel, multi-touch experience that allows sellers to seamlessly integrate digital and in-store experiences while collecting the data necessary to adjust to their customers' expectations. The linear nature of the buying process has moved to a circuitous journey, filled with review sites and personal research that equips buyers with more information than ever before. The effectiveness of traditional KPIs is no longer able to keep pace with the emerging trends in the buying experience. Understand the new complexities of the buying journey and reacting to the demands of consumers will be the most critical factor impacting the trends of 2019.
While the trends of the near future will not become standard overnight, they do indicate a pressing need, and opportunity, for dealerships to adapt their retail experience. If dealers can install technology that accounts for the multiple touch points in a customer's journey, create a dealership atmosphere that promotes interaction and comfort, and integrates each solution with a data management tool, they will be well positioned to handle whatever challenges 2019 brings.
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