How can car dealers and importers meet the increasing customer expectations towards digital sales and communication channels?

In my first article, I introduced key trends that I think are going to have a significant impact on the automotive industry and highlighted the ones importers should focus on. The pandemic had a big impact not only on the automotive sector but world economics, hence priorities should be realigned. In this article, I will write about ‘digital sales channels and their importance in this new world. Read on if you are curious what dealers and importers can do to meet the increased customer expectations towards a more digitalised sales and communication experience.

A radical lifestyle shift: Increasing presence online 

Unfortunately, the pandemic is still on, despite vaccines becoming available globally. Vaccination of masses is still a considerable amount of time hence many countries are still under heavy lockdowns. Many, traditional brick and mortar sectors had to become creative and go online in order to function or survive. One of the hardest-hit industries—the service sector— had become digitalised quite fast. Many restaurants had established online ordering systems, online cooking classes or came up with extra services in alignment with government regulations.

E-commerce is booming, as well as streaming services and now—since there are no other options available—we can watch opera or our favorite symphonic online with just a few clicks. Most of us are forced to work from home; it’s crazy to think it’s been almost a year. 

Now companies are settling into this new norm and the automotive industry is no exception. With this shift in people’s lifestyles, the demand for a more seamless online buying experience is becoming significant. 

Therefore, one of the most urgent priorities for car importers and dealerships is to find and implement ways to meet the customers’ rapidly changing expectations in regards to online presence, remote booking and buying, and increased convenience in general. 

Remote selling becoming the new normal

In Europe alone, the use of digital channels has increased by an average of 13% according to the recent McKinsey digital sentiment analysis. Interestingly enough, the biggest growth has happened in Germany—with one of the largest car industries— as the use of digital channels jumped 28% in response to the COVID-19. Additionally, 72% of first-time users in Germany said that they will continue to be regular users of these online channels. Looking at these metrics changing in radical ways only in the past year, online presence will be—and already is—a game-changer for businesses. 

The 2019 Digital Quotient analysis also from McKinsey revealed that the average automotive business has a need to digitalise, with the industry scoring below average compared to other B2C and B2B businesses. 

Remote selling and better customer service and experience becoming priorities for most businesses and there is nothing to be afraid of. Recent experiences show that those businesses who have shifted their go-to-market models online think that the newly digitalised model is just as effective or more than before. 

We start to see that even though digitalisation was forced in many industries due to the pandemic, it eventually brings positive outcomes to many. Let’s look at how digitalisation shifted the car industry, towards a hopeful future. 

Selling new and used cars - learning from the pioneers

The good news is, that we can see good examples already that we can learn from. In 2020 February, China experienced a huge, 80% decline in overall automotive sales. Tesla however almost doubled its sales in China in 2020 by establishing an online sales channel with a well-structured online shop, contactless test driving, and car home deliveries that have become effective during the national lockdown. 

If we look at the used car sales we see successful initiatives there too. 

The UK-based Carzam is a new online business venture selling used cars online. They offer a seamless end-to-end e-commerce experience as well as simplicity and convenience through a next-day home delivery service for their customers. The core technology behind their business is NetDirector? Auto-e, an e-commerce platform that makes buying cars fully digital and extremely simple. It is a testimony to their business model that they sold 1000 cars within the first 6 weeks of their launch. Carzam basically has transformed their dealership into a fully online one where customers are in the center with strong customer support. 

If we look further, there are many more great initiatives. Autotrader launched its Home Dealer Services, a set of online tools to help dealers provide a contactless experience or Shop Click Drive from General Motors which allows customers to order a car online and collect it from a local dealer. On the extremes, we have Carvana in the US, which have built “car vending machines” where you simply pick and choose your new car from a 20 story vending machine, pay with your card, and drive back home in your “new” used car (or order it online and get it delivered at your address within 24 hours).  

COVID-19 will have lasting effects on the way cars are sold and customers used to the convenient way of buying a car, will most likely continue this.

Volkswagen Group Australia has already realized and acted on this. Kudos to them for their change-ready mindset, which enabled them to be one of the first VAG importers to accept online orders on all of their vehicles, a move that has already proven very successful during the pandemic.

But what about the aftermarket sales?

When people talk about selling cars, there’s a segment that is just as important but oftentimes disregarded, and that is aftermarket sales. The biggest revenue in this industry segment comes from car service, spare parts, and accessories; and the older the car becomes the more revenue it generates. Keeping the aftermarket sales just as up to date to current trends as regular car sales is key for the whole ecosystem. Workshops’ interest is to keep customers loyal through a seamless customer and service experience. OEMs and importers’ have just as much interest in customer loyalty, as they produce and deal with spare parts. It is a well-known fact that most customers leave their designated workshop after their binding contract or vehicle warranty ends, to find a cheaper alternative. Losing customers is a big cut for every business. 

But what can car importer and dealer actually do about all this?

From my point of view, they can do a lot! It is now time for the car importers and dealerships to start applying a more experimental mindset, and test out new sales and distribution models on a more structured and frequent basis.

As Jeff Bezos says: 

“Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day.” Jeff Bezos

Therefore, I suggest that all dealers and importers should actively focus on allocating resources (money and time) to experimental projects that have a clear target of meeting the customers’ increased online expectations. At the same time, it is important to adjust the mindset to allow failures along the way. 

Back to our good friend Jeff; 

"To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there," Jeff Bezos

These experimentation projects should not be long, academic research projects where the results will never see the light of the day. They shall be short, sharp, and most importantly, they shall be achievable for a single dealership or a small team within the importer to form, implement and measure within a few weeks or months. It's not a matter of bringing new state-of-the-art solutions to the market, it's all about testing different models and finding out what works, what doesn’t, what needs reiterations, what shall be matured and released on a broader scale. 

A few ideas for projects that can easily be implemented and tested are: 

• Online chat or chatbots on the websites
• Online booking at the workshop 
• Online test drive bookings
• Begin working with your customer database (send out targeted emails and campaigns)
• Implement and manage your online reviews (trust scores) 
• Video presentation of your work at the workshop (and also of your cars for sale)
• Implementation of a retrofit car telematics solution 
• Be proactive with service and warning lamps
• Give the customers an app and direct communication channel with your workshop

At Connected Cars we already see great success among our customers. Workshops are able to generate more revenue due to the service leads, keep customers by establishing strong relationships as well as simplify and plan effectively their workloads. Best of all, it's very easy to get started! Do you want to test it out yourself? Book an online demo and we’ll tell you how!

Conclusion: 

Customer expectations are changing, but with every change, also comes a great possibility to stand out. So right now, the timing is perfect for car importers and dealerships to start their journey into the new digital future and make a difference for their customers. Every big change starts with one small step, so let's bring the experimentation into the daily work, and take the first steps of a long and exciting digitalisation journey!

Interested in how Connected Cars’ can bring the digital transformation to your dealership? Book a time now for a demo here.