The last few years have been eventful for the automotive industry to say the least. The Volkswagen emissions scandal sent shock waves through the market. It shattered trust and consumer confidence in the automotive industry. At the same time, sales shot up to 17.55 million in the U.S. and 73.9 million globally in 2015. This goes on to show just how much the automotive industry stands to grow in the years ahead.
This industry faces some very unique challenges that need to be addressed tactically to ensure growth. The most important of these is to shift from a product-centric to a consumer-centric industry.
The consumer today is far more aware and demanding than ever before. They are aware of laws, regulations and safety standards. They want only the best products and they want to enjoy the process of buying them.
Digitization is another challenge automakers have to face, as it stops for no industry. Consumers are using the internet for most of their research during the purchase journey. They have access to reviews, reports and recommendations. In short, consumers are empowered, and this is not to be taken lightly. There is a paradigm shift in the way consumers buy cars and the industry must keep up.
The industry needs to satisfy the growing expectations of consumers. Automakers have to innovate their distribution and sales model to deliver a seamless experience from browsing the brand website to taking a test drive at the dealership.
Here are the 3 key challenges that need to be tackled effectively –
1. Challenge: Adopting Better Digital Marketing
Despite the phenomenal growth over the last few years, the automotive industry has been rather slow at creating a strong digital marketing strategy.
A survey conducted by Accenture showed that 80% of car buyers like to perform their early or mid-level research online. This includes viewing different options, gathering critical information and comparing products. While earlier, a customer would ideally visit 6-7 dealerships to make a decision, customers now visit only 1 or 2 dealerships and do the rest of comparisons on their computers.
According to Changing Lanes 2015, a study conducted by EY, consumers spend more time researching online for a car purchase than for any other product. An average of 10 hours per person per car to be more specific.
However, most buyers have to rely on websites like Edmunds and Cars.com for this research, as dealership websites don’t provide the information that allows consumers to make confident purchase decisions.
2. Challenge: Gaining Trust and Managing Expectations throughout the Customer Lifecycle
The transformation of a shopper into a buyer and then, a brand advocate, is founded in trust. Automakers and dealers must establish a trusting relationship with the customer to increase profit margins throughout the customer’s lifecycle.
In the EY survey, 72% of people said that an improved buying experience would make them visit the dealerships more often.
To do this, you need advanced customer relationship management across multiple touchpoints throughout the purchase journey. From the first interaction to online research, test-driving, financing and after-sales service, you need to engage the customer and reinforce trust building attributes at every step.
3. Challenge: Provide Better Services across Multiple Touchpoints
While the dealership will still remain the most common touchpoint for buying cars, the possible impact of online channels cannot be ignored. 80% of people are likely to use multiple devices to research a car. It is crucial to provide a balanced mix of real and virtual experiences.
Floor spaces need to be redesigned to include digital experiences. 52% of car buyers visit the dealer’s website during the purchasing process. So in addition to providing great service at the dealership, the digital platform needs to be taken care of too.
A streamlined process is vital to maintaining consistency across channels. Information provided at the dealership must be easily available on the website for the customers to refer back to.
How Digital Advice Can Transform the Automotive Industry
Next only to buying a house, buying a car is one of the major life decisions a consumer makes. An average person only buys one or two cars in a lifetime. That is why buying a car is such an important decision. Needless to say it takes a customer an enormous amount of effort to make the right choice confidently. With dozens of brands and thousands of cars to choose from, consumers could use some help deciding.
“Is this the right car for me?” is the most fundamental question automakers and car dealers need to answer.
Understanding the customer’s needs and helping them find a car that perfectly suits them, is the one major step underlining all the aforementioned challenges. Once you do, you’ll be more likely to have their trust and business. You’ve made their purchase decision easier and they are ready to buy from you or even become brand advocates.
80% of the consumers surveyed in the Accenture study stated that they want access to more intuitive, customized online content. 75% want dealers to provide a simpler, faster and more transparent process for purchasing vehicles.
Digital Advice helps you do just that.
Example: Digital Advice by WhatCarFitsMe
Personal questions that can be answered easily…