34, 42, 82 – we are not talking about years in which your favorite sports team won a championship. These numbers are survey results which should remind automotive Original Equipment Manufacturers (OEMs) and their dealers that the classical sales model that was established more than 100 years should be revised.
34% of all respondents of our new Cars Online 2017 report, 'Beyond the car', are likely or very likely to buy a new vehicle online. In this case, the complete sales process – from information gathering to the actual purchase and payment – is done digitally.
42% of respondents state that they would consider car sharing as an alternative to owning a car. Other mobility services such as ride-sharing services (e.g. the German BlaBlaCar) or mobility-on-demand (e.g. Uber) show similar results.
82% of all respondents from our latest Cars Online Trend Study, 'Online Sales', stated that it is nevertheless important for them to physically experience the vehicle; to touch it or to conduct a test drive.
Here, the big challenge automotive manufacturers and their dealers are facing becomes obvious. On the one hand, customers expect the digitization of the sales process. On the other hand, they still like to experience and touch the product in real life. These customer expectations need to be served – online and offline. Many OEMs and dealers have realized that and as a consequence are working on new and innovative sales concepts.
Online-offline integration and new roles at the dealership
Online sales alone will not be sufficient to fulfil customers' expectations. Dealer outlets must still offer the possibility to test drive a vehicle and to experience it in real life.
But again, thanks to high customer expectations, innovation and change is a must. Customers enter the dealership already very well informed and with clear ideas and opinions, due to their previous online research. The sales staff must be informed about these ideas and opinions before the customer visits the dealership to be able to consult him in the best possible way.
Therefore, a seamless transmission of information between online and offline is necessary. On top of this, customers don’t expect sales representatives at the dealership. Instead, they would prefer to speak to a product expert. Complex products such as e-mobility solutions or features for (semi) autonomous driving increase the need for advice and should not be mixed up with a sales pitch. BMW was one of the first OEMs to install such a role with their Product Genius, and others are implementing similar roles now as well.
Close to the customer
Besides roles, locations of the dealership outlets are moving as well. 'Urbanization' is the buzz word, 'Mercedes me' stores and 'Audi City' are only two out of many examples in which automotive manufacturers are following their customers into the bigger cities. Surrounded by a cozy atmosphere and while drinking a well-brewed cup of coffee, products can be experienced and talks with product experts can be held.
Tesla completely renounces large dealerships but focuses instead on small stores at city hot spots or in big malls. As a consequence of the missing space at such locations, digital tools are needed to provide a complete experience of the vehicles. In order to be able to present all models and features, OEMs and dealers are using virtual reality glasses or big wall screens. As a result, customers get a close-to-reality feeling of their desired vehicle configuration.
Mobility instead of an own vehicle
As mentioned at the start of this article, many customers are interested in alternative mobility solutions. Since OEMs are already becoming mobility providers (e.g. Daimler with Moovel), these additional products and services should be integrated into one holistic sales concept. Customers should get the perfect mobility solution that fits into their respective needs at the specific moment of time. By doing so, expectations will be met and customers will show their appreciation through increased loyalty.
But what does this all mean? Changed customer expectations inhabit chances and risks for OEMs and dealers. As a consequence, we see various new and innovative sales formats – online and offline. And there are more and more on the road to come. How all this is influencing the used car business, you will learn in the next article of our blog series.