For many of us, the stereotypical notion of buying a car involves an over enthusiastic salesman, peddling his deals among rows of shiny motor cars on a large forecourt. But changes are afoot…The technological advancements that can be seen and felt in retail and hospitality environments, combined with the relentless march of online selling; have not spared the motor sales industry.
For starters, consumers are increasingly embracing the web as a means of purchasing goods and services. According to research, in 2017 approximately 87% of U.K. consumers have bought at least one product online in the last 12 months, with the UK being second only to Norway in making e-commerce purchases in Europe.
Car purchasing is becoming no different. Accenture recently reported that some 80% of all research into buying a new car is conducted online, with car buyers subsequently visiting fewer than two dealerships on average. So, while physical car dealerships are still relevant, it is crucial that automotive retailers find innovative ways to address this change in consumer behaviour. It is more important than ever that car manufacturers and dealerships create brand exposure in not only the digital, but also the physical world, before the actual need to purchase arises.
The Millennial generation is the fastest-growing auto retail segment, with 35% of all loans originating from this generation and a 49% growth in Millennials’ share for lease contracts from 2012 to June 2016. This generation is clearly interested in acquiring new vehicles and represents a lucrative segment for those dealerships who can make the connection with this group of car buyers, being fully aware and prepared for the fact that they are arriving at the car purchasing process with some completely new expectations.
Older generations are also picking up some new habits. This is because we are all conditioned by Amazon and other online experiences, and increasingly follow omni-channel customer episodes: We research, select and buy cars in different ways to our non-digital predecessors, and increasingly expect the same capabilities and quality of service when shopping for cars as we are accustomed to experience in other aspects of our digital lives.
In the physical world, the wealth of technology is becoming more prominent and is increasingly being used in the automotive industry to drive customer engagement. There are various examples such as Audi launching their very first Digital Showroom, bringing virtual reality (VR) technology and with it a rich and interactive experience, through simulated test drives on London’s Park Lane. Similarly, Jaguar Land Rover offers potential customers a virtual tour of life-sized, as-yet unreleased models, illustrating technical details through added animations. BMW, was also an early adopter of in-store digital technology, offering dealers worldwide a multi-lingual solution, displaying information and promotional material in showrooms, that can be controlled at a local level to meet the specific needs of a dealer’s demographic.
These days, more and more car manufacturers and dealerships are also electing to trade away from the traditional “out of town” forecourts and are instead taking up residence alongside other retailers in shopping centres and on high streets. The benefits to consumers are that they are offered more diversity while shopping, and that they get to touch and experience these cars, creating a connection and a familiarity with the brand, before the purchasing need arises. For retailers and landlords, it is a valuable use of excess space, and leads to an overall increase in dwell time.
For instance, if you visit Bluewater shopping centre, you’ll see a Hyundai store among all the usual retailers. The location of all of the cars out on test are displayed in-store, which creates an engaging visual for passing shoppers. Customers can visit the store to research Hyundai options and make their purchase, with the cars delivered to a place of their choosing. Bentley has opened in the middle of Westfield Stratford, with the introduction of their luxury studio that allows customers to design their bespoke Bentley onsite. BMW Mini has a presence in Westfield Stratford and Tesla has opened showrooms in Westfield White City and Canary Wharf respectively.
There is no doubt that car dealerships are here to stay. However, it will be the ones that continue to evolve, bringing technology, staff and online strengths together and creating a truly omni-channel automotive retail experience in order to meet the purchasing patterns of today’s customer, that will thrive.