'The day of buying a car online has arrived' - AM Customer Service Summit

25 February 2016

Dealers need to take action now to prepare for the changing face of automotive retail, Catherine Hutt, principle consultant for automotive at research consultancy Frost and Sullivan, will tell delegates at AM's first Customer Service Summit.

Hutt (pictured) will provide a glimpse into the automotive retailing world of 2020 exploring how the customer experience will evolve, how digital will continue to impact the purchase experience and how the role of aggregators will grow when she takes to the stage at the summit which takes place at Whittlebury Hall, near Silverstone, on April 14.

Retail formats are already changing and whilst this is perhaps more apparent in other sectors, these trends are impacting automotive retail.

Meanwhile, new business models are also emerging.

Hutt said: "In the past consumers have been happy heading to out-of-town retail sites where we could find everything under one roof.

“That's all changing now. We want smaller, targeted, urban outlets which are closer to home or work. We also expect the online and physical experience to merge, so we could be researching a product on the website one minute then expect to be able to access an advisor immediately to answer a specific question the next minute.

"The digitisation of the customer experience will become an expectation rather than a 'nice to have' extra.

“We will expect to configure a car online in the evening, generate a code and pop into a dealership in our lunch break, hand over the code to the sales consultant and for the information to be retrieved immediately.

“When we return home, we expect to be able to see any updates following our conversation with the sales consultant to have been incorporated online.

"We should then have the option to complete the transaction online.

“To say the day when car buyers purchase their next vehicle online is still a long way off is to bury your head in the sand. That day has already arrived.”

"We are becoming increasingly exposed to and accepting of digital in our everyday lives such as holograms already in use on the underground to provide directions, and this kind of technology will become more widespread helping to change the traditional retail model with virtual sales people.

"In addition, dealers need to understand and embrace the role of aggregators, online portals which gather information in one place making it easier for consumers to compare prices and services."

Other changes include the reduction of floor space; by 2020 the typical automotive retail footprint will have shrunk by a third. Alongside, 70% of marketing spend will be allocated to online with 70% of leads coming from digital channels. Even though the physical space will reduce, dealers can expect to dedicate 20-30% of the showroom to digital technology such as virtual assistants and interactive screens.

Hutt said: "Dealers and manufacturers will need to collaborate in order to redefine the dealership which will meet consumer expectations in 2020.

"Practically everything from an increased digital presence to new KPIs and even a revised pay structure which reflects the changing retail model will have to be taken on board if dealers and manufacturers are to create sustainable businesses."

Supported by: