March 30, 2021

CLICKS ahead of BRICKS ?

“And there’s no stopping us right now, I feel so close to you right now” Calvin Harris’s ‘Feel So Close’

Where are we on our Journey?

In recent years, the Automotive industry has seen the move from an ever-increasing spread of disconnected online services to several players providing their first embryonic joined-up customer journey for direct customer sales. In addition, we have also seen technology giants entering the space looking to create true mobility ecosystems.

Having spent the last 4 years, working with some great colleagues to create Polestar’s global online platform, allowing the brand to transact online from initial brand awareness through to ownership, I’ve spent many hours contemplating and continually learning what good might look like. It’s a large sector, and in reality, there is very little truly seamless digital penetration. So, what does the future omni-channel retail strategy look like within mobility?

Before we look forward, it’s worth reflecting on how much the digital world is already influencing our traditional new car purchasing experience. We are generally more prepared, well researched and better informed when we enter the physical showroom. An increasing majority now having trawled the internet, read the journalist reviews, played with the online configurators, evaluated the comparison tools, used finance calculators, and understood the residual value of our proposed purchase by looking at used car sites and trade-in tools.

Traditionally, depending on your age, gender, and status, physical showrooms and the process sales staff follow to sell is not on everybody’s must-do bucket list! That’s even before you consider the whole negotiation process. It is just like Marmite – you either love it or hate it. Some favour the retail experience by sitting in and test driving the latest models, challenging the staff on the car’s functionality and specifications whilst drinking copious amounts of vending machine coffee…..or maybe that’s just the petrol heads that I mix with? Others, like myself loathe the whole process simply wanting to drive out in a new car as quickly as possible. What about you, do you love it or loathe it?

Covid-19 brought economic uncertainty and showroom lockdowns which, in turn detrimentally impacted new car sales. However, with increased screen time and our basic human instinct to survive it has accelerated our desire and capability to transact online. Some experts have stated that the pandemic has fast forwarded the automotive sector by at least 3 years. Last year’s statistics show the uptake in the omni-channel approach has not been as noticeable in automotive compared to other retail sectors. If we used the Apple experience as a benchmark, can you image how slick the new car purchase process would be, how many clicks to configure, pay and arrange collection?

What routes can we take?

For those consumers who want to avoid the negotiation process and complete the financial and registration process remotely at a time that suits them, I’d argue that all that has happened with both new and used car purchases is that parts of the existing traditional process have been digitalised. This has resulted in leads being turned into finance qualified deposits for a specific model, that in turn the sales administrators manually match with pipeline orders or stock and complete the transaction and registration remotely.

Many Automotive OEM’s and Franchised dealers have not yet fully embraced the opportunities to streamline their existing processes, change their operating models or alter key touchpoints through the customer journey to ensure success and meet the increasing demands of the digital-savvy consumer. This leaves the stage open for disrupters to take their share of the marketplace from the traditional key players.

It is possible that, as long as the physical showroom experience adds customer value to the transaction it could well remain, it’s even feasible to consider that just like marmite many will favour it. However, although I have no actual empirical evidence to support my argument, I would hypothesise that as our Gen-Z matures and that traditional passing down of practices from generation to generation diminishes further, the number who see the need to visit a showroom will reduce to a minuscule minority.

I’d suggest the heart of the problem is NOT the complexity of the customer journey, the ability to finance and register the car or the high purchase cost! The issue is that, like many other major change programmes that have digital at the core, this pivotal transformation is often misconstrued as ‘simply’ being a technology initiative with the focus being drawn towards the technology stack the provider and the IT department to make it happen.

Don’t get me wrong, technology is critical, but it should be balanced with a focus on understanding more about the consumer demands and the ability to flex the organisational structure and process together with technology to meet these changing demands.

Where is the ultimate destination?

It is clear

  • New Business Models create opportunities: The subscription model is here to stay, in the same way that streaming has become the new normal, true mobility services will follow. This ownership shift from traditional purchase or lease schemes to subscription services is an example of a new operating model, one that is well suited to an online experience.
  • Enrich existing touchpoints: Alongside additional business models, I believe that the desire for home delivery options and experience-rich test drive events will provide great opportunities to further exceed consumer demands.

The real winners will be those that are able to support the consumer seamlessly throughout their own unique journey, making each experience special through interweaving online content, material and functionality with human interaction. These human interactions will become the real differentiator that adds memorable consumer experiences and creates those delight moments and advocacy stories as more and more of the transaction is completed digitally.

To wrap up, I think the sector still has a long way to go before we can honestly say we have developed a seamless omni-channel customer journey from awareness through to advocacy. However, I do believe that the desire and expertise are growing, with other sectors being used as the benchmark. The Automotive sector, accelerated by the pandemic has turned a corner, referencing back to Calvin Harris’s lyrics “And there’s no stopping us right now, I feel so close to you right now”.

Do you agree, is there no stopping us and are we close?

I will be looking to share further thoughts and insights on several other automotive-related topics in the coming months so please continue to look out for further blog posts. As always, I will be keen to hear your views, learning and observations.

Here at changemaker, we support organisations and individuals in delivering sustainable and lasting change, especially during pivotal times of transformation. When supporting teams in the change we work with the human being as well as the process, enabling organisations to ensure they can succeed in delivering sustainable change.

If you want to learn more about us, take a look at our website www.changemaker.org.uk or email myself at jason.craker@changemaker.org.uk.

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