Are you someone who checks your emails on your smartphone over breakfast, consumes news at work on your desktop and shops online on your tablet when unwinding in the evening? The answer is “yes” for an increasing number of people.
The permanent availability of information through the internet is triggering a change in consumers’ daily lives. Being informed everywhere and at all times is taken for granted and it’s reshaping people’s information and purchasing behaviors.
These changes do not stop at the door of the automobile industry. Consumer online transformation is a megatrend emerging all over the world. It’s affecting automotive retail in a very real way. Until recently, the purchase process was strongly shaped by the physical presence of automotive dealerships and the dealers’ sales staff. But the internet is increasingly affecting customer preferences in the car purchase process.
Giancarlo Agresti, Head of Global Automotive and Manufacturing Group at A.D. Little, just released a comprehensive global study on how consumer online transformation is affecting customer behavior in purchasing cars and parts, as well as how the automotive industry is coping with the ongoing disruptive changes and opportunities.
The following are 10 key findings of the study with insights on how you might apply these revelations to your own business going forward:
1. The online channel has changed the rules of the game.
Customers are switching between various OEM’s own and independent sales channels, expecting seamless integration across touch points and through multiple devices; it’s a new challenge for OEMs and dealers to control the customer experience in this context. Meeting this challenge is no small task. Customers are truly in the driver’s seat.
2. Research happens online and drives offline sales.
In other words, cars are still bought at dealerships (for now) but the decisions are made online. Is your business available to answer questions during the consumers’ research efforts? We’re talking about meeting the customer where they are, no matter the platform or medium, and engaging them during their research to influence their purchase decision.
3. The research phase has been dramatically shrinking over time.
80% of surveyed customers stated that they performed the whole pre-purchase research within 8 weeks. You have two short months to attract their attention and convert them. What strategies do you have to increase your visibility online while making a lasting impact on your prospects?
4. Nearly 70% of surveyed customers spend more time online than offline for pre-purchase information gathering, with a relevant number researching online only.
It’s clear the online channel is a catalyst for purchase intentions. All interviewed customers considered the online channel the preferred way to interact with the brand by landing on the OEM’s website, engaging with social media activities or with mobile applications. Are your profiles saying what you want them to say about your business? Are you delivering the information people are seeking?
5. 87% of interviewed OEMs and 66% of dealers expect an evolving scenario for retail formats and the overall retail network.
Online transformation is having an impact on the whole value chain. Change like this has never been seen in automotive retail and those that are slow to adapt should consider the consequences very carefully. This transformation will require strong leadership if the value chain is to survive.
6. Blogs (relevant, dynamic website content) are just behind Search and OEM websites as the most important sources for customers to find information or to compare products.
Self-published content is what gets your business noticed by both search engines and consumers. Being useful is something every business can do. What’s your strategy for collecting content, editing, optimizing, and regularly publishing blog posts?
7. Marketing goes online but few OEMs are ahead of the learning curve.
Online channels (including mobile) are rapidly taking the lead in marketer’s preferences for brand promotion and CRM initiatives at the expense of traditional media. Seeking advice from an expert on best practices is warranted. Training should be considered at both the OEM and dealer level to change the current course and stay ahead of the learning curve.
8. Most customers expect 24/7 realtime response time.
The study investigated the dialogue ability in terms of the average response time for customer inquiries and the ability to provide consultation services outside the showroom. Although the dealers are mitigating the gap with a global average response time of 9.2 hours, OEMs are still targeting a service level of around 24 hours. This is a relevant mismatch when discussing possible ways to improve lead conversion. How responsive are you to consumer questions? When fielding a complaint through social media channels, do you have an online conflict resolution protocol in place?
9. 70% of customers appreciate getting advice at a location of their choice.
OEMs are still lagging behind customers’ needs: only half of them would offer alternative ways of consultation, the majority being premium brands. OEMs and dealers should consider this a wake-up call for engagement. If 70% of people want to converse with you on their chosen platform, isn’t it in your best interest to comply with that?
10. Social media and “user generated content” are still unexploited levers for most OEMs and dealers.
Social media plays a significant role in influencing the actual sales conversion. It represents a very important and cost effective way to increase loyalty and actively manage the brand image. For dealers, it’s a way to “touch the customer” on a regular basis, engage them in conversations and, with social advertising, convert some of your fans into customers. As of today, most dealers are just ‘taking their first steps’ in social media. User-generated content is in its infancy at the dealership level. OEMs would do themselves a great service (ie: deliver more cars, increase profits) if they offered social media marketing training to their dealers.
I’ve been talking about OEMs helping dealers navigate social media and online reputation for over 4 years now and I can only hope things will get better soon. Perhaps these revealing statistics will encourage movement. Dealers CAN transform their business into an online marketing powerhouse. To meet the demands of today’s consumer, the transformation must start from within.