Remaining personal, responsive, and connected in a digital world
Global automotive industry challenges necessitate the revision of business strategies for both Original Equipment Manufacturers (OEMs) and retailers. As technology transforms consumer buying behaviour, OEMs and retailers need to achieve digital transformation in sales, to ensure they remain competitive and connected to their customers. For the OEM, this requires a balancing act of retaining the personal touch of face-to-face interaction while also ensuring an online approach that makes transacting simple.
As consumers become increasingly digital, they are looking to their automotive brands to do the same. They want to connect and engage with them online. This is prompting OEMs to identify which aspects of the retail sales process requires physical interaction, and which needs an online approach. For example, a customer who wants to book a test drive online and wants to be at the dealership in person to test drive the vehicle. The challenge is to find a balanced approach between the digital and human experience, while maintaining the same level of exceptional customer experience.
Introducing the agency model
To meet customer demands, OEMs have been exploring the benefits of adopting the ‘agency model’, also known as the ‘direct sales model’. In essence this is a retail strategy where vehicles are sold directly from the OEM, through various platforms, to their customers. The agency model allows automotive brands to engage directly with their customers, which was rarely the case in the past.
There are several ways to structure a direct sales model – all with varying degrees of challenges linked to the ownership of the roles and responsibilities within the retail space. Vehicles have been sold the same way for decades, with buyers accustomed to the sales process being handled by their trusted sales executive at a dealership. During the buying process, the customer is expected to do very little work, more so, if it is a luxury brand. Now that OEMs have adopted a more hands-on sales approach there has been a fundamental shift in the manufacturer’s roles and responsibilities.
It is now up to the OEM to be make themselves visible to customers and to take control of the sales process. Despite a lot of excitement about adopting and implementing the direct sales model globally, automotive brands can often lose sight of the key reason for the model change in the first place – ensuring the customer is at the heart of the transaction. It is imperative for any retailer to maintain a personal touch with customers, while at the same time developing a strong digital vehicle purchasing system.
Understanding the customer journey
Automotive customers buy vehicles for various reasons, including for affluent or utilitarian purposes. One vital aspect of any purchasing process is the customer experience. A vehicle purchase is often an emotional one for consumers, as vehicles are big-ticket items. As a result, customers will often look to retailers to navigate and guide them throughout the process. The face-to-face experience can facilitate an emotional connection, often leading to closing a sale.
One key advantage of digital purchasing is the opportunity for OEMs and retailers to source key data from consumers that will enhance the level of personalised service offered in the future. Today’s digital buyers are open to sharing their data so that companies can tailor their future transactions. Personalisation reinforces the emotional experience of vehicle purchase; enhancing elements which customers look to derive from the purchase such as status, respect, and positive self-image. However, a key disadvantage of a digitised sales process is the missing human touch and face-to-face interactions that build trust between the company and its customers.
The digital sales ecosystem
To overcome these challenges, OEMs and retailers need to work closely to identify how they will differentiate specific touchpoints to ensure that customers are made to feel unique and special. Today’s customer expects to be treated as an individual, and for the retailer to be well versed in their personal preferences and purchase history.
For a digitised sales environment to work optimally, OEMs and retailers need to significantly invest in resources to develop an omni-channel customer experience. The aim is to leverage technology to drive better relationships across all platforms despite customers’ different profiles.
Reimagine the customer journey
As OEMs begin to address critical challenges, they should not neglect exploring new ways of reaching the digitally conscious customer. OEMs should explore strategies that will mitigate the current industry pressures – declining sales due to Covid-19 and a sluggish economy – focussed on innovative ways to satisfy customers’ needs e.g., global automotive brands have explored the use of contactless test drives through virtual reality and car home deliveries. To succeed in today’s fast-moving, always-connected world, OEMs and retailers need to prioritise and embrace digital transformation, while remaining focused on providing a customer journey that is simple, engaging, interactive and enjoyable.
For more on digital transformation in the Automotive industry – both OEM and retailer specific, see www.Letsema.co.za
