With an increasing number of ongoing pilot projects, automotive eCommerce is picking up pace. Dealers are traditionally sceptical of Original Equipment Manufacturers (OEMs), and fear that online sales could be used as an “excuse” to bypass them completely. Car manufacturers, however, are simply responding to shifting customer expectations, which are based on the experiences customers make in other industries. These expectations include price advantages, convenience and time savings, as well as the ability to compare and choose from a larger offer.
Customer expectations are changing
Here are some recent experiences that contributed to my own personal expectations regarding automotive online sales:
- My bank is a “digital bank” that passes on savings from the lack of a branch network (for example by waiving withdrawal fees). In comparison, most existing automotive online sales offerings avoid discounts altogether, despite potential cost savings related to reduced service and real estate costs.
- My favorite hotel now offers a digital check-out and a room key on my smart phone. In comparison, just to change my car’s wheels to winter tires involved an extensive series of phone calls and emails.
- Amazon’s interactive product finder recently helped me to choose from a large range of robotic vacuum cleaners. The suggestion was further reinforced by positive customer reviews. Automotive eCommerce is still mostly limited to the proprietary brands and a limited product/service portfolio, often excluding aftersales and digital offerings altogether.
Despite the industry needing to catch up, promising eCommerce offerings do exist and also go beyond the ‘Tesla phenomenon’. Examples include numerous internet start-ups such as “Carvana” or “Roadster”, but also OEM offerings like “Rockar” or the entrant “Lynk & Co”.
An appetite for online sales
One of the many interesting findings of our recent trend study “Automotive Online Sales: The direct route to the customer” is that eCommerce is in the first place an opportunity for OEMs: automotive customers have the highest trust in online sales offerings from or related to OEMs. Yet, there are also manifold challenges for OEMs.
An example is the integration of the online and offline worlds and the replication of traditional dealer domains online; for example, the physical product experience or the obligatory price negotiation. Our trend study further shows that customers have considerable and concrete expectations as far as the online customer experience is concerned – they expect data security and privacy, price transparency and payment options, but also the offer of the complete, digital and physical product and service portfolio (not only vehicle sales).
Last but not least, our study shows that OEMs cannot forget about innovative mobility concepts and different use models such as pay-per-use. Thinking ahead, eCommerce will be key to all of the industry’s disruptive "megatrends". These include not only mobility concepts such as car sharing but also electric vehicles, functions on demand, and autonomous driving – be it regarding flexible ownership, new car sales or in-car commerce.
Our trend study offers further insights on why automotive industry players need to create a convenient, comprehensive and transparent online sales presence, as well as recommendations on how to get there.