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Julia Manoukian


August 3, 2018

Analysts Weigh in On Purchasing Trends Shaping The Future of Auto Sales

Julia Manoukian

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As much as Americans love their vehicles, purchasing those vehicles has too often been perceived as a chore. Not anymore. New trending data indicates that the purchase experience is about to become as thrilling as driving with the top down on an open road.

The growth of the auto industry has been a reflection of (or perhaps the impetus for) the economic growth of the nation ever since Henry Ford’s Tin Lizzie democratized the automobile. The US now has the largest controlled access highway network on Earth, which represents just a tiny fraction of the 4 million miles of roads crisscrossing the county.

Over the past 100 years or so, innovation in the design of the automobiles has come in intense waves of activity, while the channel for purchasing vehicles has remained astoundingly constant. The pattern was that prospective buyers did research (first with newspapers, now with the mobile web), then went to a dealer for a test drive, accompanied by a bit of hard sales techniques.

That uniform structure is going into history books now. Just as connected cars, driverless tech and electric engines have redesigned the basic concept of how a car looks and what it does, omnichannel purchasing strategies are reshaping the customer journey and the buying process. New data capture, event and experiential marketing technologies are making offline marketing easier to measure, run and scale. 

We’ve put together insights from some of the sharpest minds in the auto industry today for a glimpse of what’s coming next in vehicle purchasing.

Integrated Software as a Single Source of Truth

Erik Almadrones, managing director with Deloitte Digital, observed that one of the most significant trends over the past few years has been the crumbling of silos within auto organizations.

Managers in charge of incentive programs can no longer afford to operate independent of marketing teams that promote experiential programs or programmatic ad buys. Almadrones suggested that success in the industry hinges on tighter integration around agreed on metrics.

He wrote, “The goal is to enable the people who plan, manage and execute incentives to directly coordinate and collaborate with their counterparts in brand marketing, and for both groups to jointly plan the company's advertising and incentive programs.”

Personal Connections in a Cold, Digital World

Handshakes are hard to come by as online connections multiply. For Louis Falco, Cadillac’s Head of Customer Relationships and Brand Loyalty, the future belongs to those players who make the buying process painless, whether that means more positive in-person interactions or more valuable online portals.

In one of Limelight’s own webinars on the topic, Falco explained, “The most important thing… is identifying the moments that matter and the pain within the journey. You succeed as a top brand by understanding what consumers value and where you're failing to deliver on the value for those consumers.”

Driving Value After the Sale

In the World Economic Forum’s examination of digital transformation in the automotive industry, Giuseppe Moder, Digital Marketing and Customer Relationship Management Director at Fiat Chrysler, pointed out that the value offered by industry leaders must continue long after the vehicle purchase.

The industry leaders of tomorrow won’t be concerned with just making or selling a great car anymore, they will be building digital ecosystems to improve the lives of their customers. He said, “It doesn’t make sense to be a car manufacturer anymore. I need to give you an integrated solution for your mobility.”

Digitization of the Customer Journey

Many common operations that were once considered impossible to digitize have already moved online, such as shopping for clothes, choosing the freshest produce and going to the doctor for a checkup. While only a small percentage of buyers now purchase cars entirely online, majority of those crucial interactions have already moved online.

Premium and luxury car buying experiences have always been more personal, but that doesn’t mean they will always be in person. New data revealed by the Harvard Business Review indicated that an average of 8.9 touch points lead up to the purchase of a luxury car today, but 5.5 of those normally occur online. Although only 2 percent of contemporary car buyers completely purchased their car online, 77 of those surveyed said that they anticipate purchasing cars online in the months ahead.

Experiential Marketing at the Dealership

Based on the data about the dealership’s role in the buying process of the future, expect dramatic changes by industry leaders in the very near future.

In Accenture’s report on The New Automotive Dealer, Managing Director and Global Automotive Lead Axel Schmidt wrote, “Dealerships will remain the lynchpin of the automotive distribution chain and customer interaction—but not in their current form. The automotive dealerships of the future will be networked mobility hubs that engage, entertain and delight customers, and now is the time to start creating them.”

Excellence in Cross-Channel Handoff

Customers move effortlessly among and within their swarm of personal devices. This is just as true in auto sales, where customers slide across to different online and offline channels at least four times on average before a purchase. They expect their suppliers to know them and remember them, carrying data across those fluid boundaries.

They don’t want to keep entering the same info over and over, either on paper or online. The absence of data flow tech is experienced as a brand who doesn’t know and doesn’t care who they are. Bain partner Dr. Klaus Stricker, head of global automotive research, advised that auto industry professionals must start now if they haven’t already invested in the necessary software to keep up with this essential cultural shift. He wrote, "Enabling customers to seamlessly interact between digital and traditional channels requires enormous investments in omnichannel concepts."

Sharp Turns Ahead

It’s hard to imagine what Henry Ford would make of the electric-powered, self-driving, highly-connected vehicles operating on roads today. Even as global populations increasingly swell the populations of cities where cars are problematic, individual ownership continues to be thought of as a rite of passage for the next generation of Americans.

People are more mobile than ever and they need transportation that will go their way, on their whim, with minimal impact on the environment. They expect to buy these futuristic vehicles in the most convenient way – on their phones, with virtual test drives, after experiential events at dealerships, etc. They also expect their cars to usher them into a digital ecosystem of partners that keeps delivering value long after the sale. Perhaps the most amazing part of this story is that auto industry leaders are already delivering on all of those promises.

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