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How can auto brands futureproof their businesses in a digital world?

The Drum 16 Oct 2020 11:00
By Sarah Ramamurthy-16 October 2020 12:00pm

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OMG Transact consider the changing future of the automotive sector and consider ways for marketers to get behind them.

This article is taken from OMG Transact’s latest report ‘Future proofing your business in a digital world: The Auto Industry’.

Convenience is now everything and digital disruption has prompted major shifts in consumer expectations.

Today, automotive brands aren’t just tasked with delivering a high-quality, reliable vehicle – they’re expected to make the trip simpler, more comfortable and more enjoyable. This has only intensified with the explosion of new models around sharing and owning a car.

However, the industry has been slow to adapt to this new world. Part of which is because of the legacy model with dealerships. But consumer demand and heightened expectations are making brands sit up and see that they need to change this model.

Yet, within the automotive industry, we are at the climax of transformation and should expect to see huge changes in the coming years.

So, what are our top three tips for success?

Is this the death of the dealership and car salesman? No, but their role will change. And in this digital age with the amount of people visiting dealerships declining, some tough decisions need to be made towards disrupting the old model.

Similarly, in May, Volkswagen announced that it was transitioning sales of its all-electric car to a direct-to-consumer (D2C) model. Customers choose their preferred dealer at the outset, who then organises the test drives, processes the transaction and arranges the handover. The dealer does not sell the vehicle, however, as the price is set by Volkswagen. Instead, the dealer receives a commission for facilitating the service.

The dealership of the future therefore needs to be an ‘experience centre’ where the brand can be fully appreciated and experienced. The future of business is personal, so dealerships need to follow suit and build engaging, dynamic and brand-centric spaces that put the customer in control.

Relevancy and personalisation have never been more important. Historically, a lot of data and communications happened through dealers and their CRM. But now with advancements in technology, particularly in digital, brands can personalise the consumer experience both offsite and onsite, based on their interests and behaviour using first party data and other data sources. In turn, brands can measure the sale more directly.

  1. Align technology so you can manipulate the first-party data.
  2. Consider how best to use first-party consumer data and know how to leverage the insights and commercialise it with the rise of the connected and autonomous vehicle.
  3. As the service versus product sales continues to grow, applying AI to create up-sell and buying opportunities will be critical.
  4. Having a plan for data that can be leveraged to commoditise partnership opportunities is critical, eg service stations, grocery stores.
  5. Decide the role for virtual showrooms, VR and video content.

We already know that shoppers are demanding new business and service models. And with the rise in connectivity, brands can be more innovative with subscription models to unlock further after-sales opportunities. Indeed, this shift is helping new retail models to emerge that are fuelled by connectivity and convenience.

Similarly, with the rise of the connected, autonomous car aided by cloud interfaces with fast processing speed, big data access and analytics, auto brands can now package up consumer insights for key partner companies. The biggest opportunities will lie around on-board driver assist voice ads, proximity-based partnerships or intelligent risk assessments linked with insurance brokers.

To download the full report, Future Proofing Your Business in a Digital World: The Auto Industry, click here.

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Tags

TeslaVolkswagenAppleSarah RamamurthyOMG Transact
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