Well before the current pandemic, disruptors aimed to dismantle the status quo car manufacturers had enjoyed for over one hundred years; largely wrought by visionary young tech companies of which the most famous being Tesla.  Founded in 2003, it is now a household name and synonymous with the cool aesthetic of battery-powered, electric cars which early adopters purchased in serious numbers that culminated in the delivery of more than 367,000[1] units in 2019.  Impressive certainly, yet small beer when compared to Volkswagen Group who delivered 10.97m[2] units worldwide in the same period.  Nevertheless, Tesla’s radical impact on the automotive industry has upset the assured space occupied by giants of the automotive industry and big names like Volkswagen Group, BMW and Mercedes are now fully engaged in the race toward fully-connected, software enabled electric cars.  No wonder that Chairman of the Board at Volkswagen Group, Herbert Diess, recently emphasised that software expertise would determine the company’s future success, telling senior executives: “We are valued like an automotive company, while Tesla is valued like a tech company.”[3]

Volkswagen Group chief Herbert Diess

Yet, disruption in the automotive industry is not merely confined to manufacturing, distribution and the development of proprietary OEM connected car software subscriptions.  Huge advances in digital innovation have fuelled consumer adoption of ‘mobile-first’ lifestyles. As the ultra-portable computer that we carry in our pockets, the smartphone has 3.2bn[4] global active users and provides on-demand access to pretty much everything – 24/7/365.        

1 The Verge

2 Volkswagen Group News

3 Financial Times

4  newzoo

As such, this is undoubtedly the ideal channel for car companies, their franchised partners and third parties to engage and interact meaningfully with potential and existing customers.

Yet, compared to the digital convenience offered and fully embraced by consumers across wider retail, the automotive industry lags behind.  Amazon is a perfect example of leveraging mobile customer engagement; a global, dominant behemoth that sells everything you can think of from

A-Z, including Fiat motor cars, is often the first port of call for consumers.  Their huge success and popularity is largely built on the back of outstanding customer service which in turn breeds trust that ensures exceptional customer loyalty.  This outcome is exactly what needs to be replicated in automotive retail.

Customer loyalty is critical to the health of the automotive industry across all retail departments, be it new or used vehicle sales or aftersales.  While securing new vehicle market share through the conquest of customers from other brands is clearly an important aspect of a sales strategy, retaining a loyal existing customer base is equally critical.  Moreover, personal recommendation is still by far the best sales tool: a delighted customer is a tremendous asset and a superb brand ambassador who will help a brand grow revenue and market share in good times and help sustain it when the trading environment isn’t as rosy

Autofutura believe that the new normal will see a swift acceleration and uptake of innovative, interactive digital customer services.  By leveraging Smartphone technology, a highly personalised, relevant and timely customer engagement proposal can be created and delivered directly to customers allowing both seller and buyer to interact efficiently and effectively – most importantly, at the customers convenience.  It is fundamental to our success that, at all times, we adopt the mantra of think like a customer or TLC2.

Car manufacturers, their national sales companies, finance partners and franchised networks have experienced a seismic downshift over the past few months.  With dealerships closed, the ability to meaningfully engage and interact with customers has evaporated; something that the deployment of digital customer engagement tools will reverse.

What’s more, the automotive/mobility sector has been further stimulated by the expansion of established companies into the technology arena as well as the huge growth in start-ups that inhabit every conceivable area of the digital landscape. These companies, established and newly incorporated alike, are now starting to bite hard at the heels of the traditional marketplace and exerting considerable influence across a number of areas, three of which being:

  1. how consumers think about mobility
  2. how customers engage and interact with brands and their franchised networks
  3. how brands interact with consumers to create an ever closer 1 on 1 relationship

From a traditional car purchase via retailer on or off-line using a personal financial plan, to exploring a P2P car sharing option or a ride hailing provider, or even a car subscription plan from an OEM or third-party vendor, digital engagement will be front and centre of the customer’s activity.  A superb example of this would be Fair.com, a US car subscription company only accessible via smartphone app, from consideration to completion of contract docs, the entire customer journey is digitised.

Digital is the game-changer

Autofutura is entirely confident that the ‘new normal’ post-Covid months will see an aggressive adoption of digital technology that will accelerate and usher in lasting change of how the industry drives customer engagement and loyalty.  Car companies and their retailers will respond more quickly and with more gusto to existing or promising new digital strategies.  Undeniably, the tools that enable an acceleration of a fully digitised customer journey to seamlessly blend the on-line and off-line experience will occupy pole position.  There are a limited number of examples of achieving an automotive retail nirvana but an excellent UK example of a bricks and mortar scenario is the Jaguar Land Rover digital experience at Westfield London, in partnership with Rockar.  Other examples of online experiences would be the car manufacturers virtual showrooms, which over the past weeks have provided consumers with convenience from the comfort of their own home. However, as an industry we still grapple with a fully digital customer channel, we haven’t fully squared the circle in providing the customer with a truly dynamic and interactive real-time journey as a genuine alternative to visiting a physical showroom.

Several manufacturers offer an online sales process all the way through to click-to-buy or handing over the last step of the journey to a dealer of your choice.  As discussed, Fiat Chrysler Italy are currently testing the water for sales through non-traditional channels with Amazon.  Meanwhile, in France, sales of the  Citroen Ami, an ultra-compact, all-electric car have got off to a strong start in its home market, with 200 orders received within hours of its sales website opening; all orders were processed online, with 85% involving some degree of customisation on the part of the buyer. But such examples and other on-line sales initiatives still only account for a tiny fraction of vehicle sales.

While the bricks and mortar or virtual car buying experience is an intrinsic part of the consumer journey, it is the mass deployment of bespoke digital tools that will allow an accelerated enhancement of customer engagement while simultaneously enabling real-time interaction.

There’s an old three-step saying that goes something like this. ‘You have to secure the consumers attention, to create the opportunity that allows them to want to buy from you.’  With that in mind, what better way to secure a customer’s attention than via smartphone.  That my own screen time use averages 59 pick ups a day illustrates its power in communicating your message.

The author of this paper is:

Paul Bennett

Autofutura Ltd

Director |International Business Development

T: +44 (0) 7796 872122

paul.bennett@autofutura.com