A lot of changes have occurred in the automotive retail industry over the past few decades, including three big paradigms in particular.

The first one is what our grandfathers like to call ‘the good old days’ when the main driver for selling a car was… the car itself. Occurring in the 70s and 80s, each dealership had its own brand niche and competition was moderate.

This changed in the 90s-2000s with the consolidation of automotive manufacturers and the rapid spread of large multi-brand dealerships. Competition strongly intensified as retailers began selling the same brands within driving distance from one another. Customer loyalty and margins went down as a result, and offline customer service became the new basis for competitive advantage.

The third paradigm emerged within the last five years – driven by digitalisation, social media, smartphones and car aggregator websites. All of which have created more visibility for customers and 2.0 customer expectations, among which:

aureso_connecting automotive apps like facebook1. Real-Time Availability on Multiple Devices

Customers, especially millennials, are not used to waiting for the availability of businesses to serve them. They order food on their smartphone in just a few clicks, do shopping online and receive items the next day, and get immediate support thanks to 24/7 answering services and live chats.

The automotive retail industry is no exception. With customer expectations to connect to manufacturers and dealerships in real-time, customers want to get in touch not only during working hours over the phone, but also on a website, social media pages, dedicated mobile apps etc. for vehicle and service queries.

Additionally, they expect continuity across every channel. Across every interaction, they expect the dealer to have ready access to the information they shared on that journey. Dealers and OEMs need to collaborate – using dealer, customer, and vehicle data – to provide this seamless, digital brand experience throughout the retail network.

2. Personal Relationship & Trusted Expertise

This day & age, customers expect something from dealers they can’t find online: a personal relationship based on trust and expertise.  A Mckinsey study* showed that over 40 percent of customers rank product expertise as the most important element of a dealer consultation. Even when purchasing a second-hand car, customers expect to have a closer consultant relationship and better service than they did in the past.

“As customers increasingly collect general information online, dealers are ever more being viewed as an advanced ‘second-level support’ for questions and doubts that neither the online configurator, the OEM Web site, nor the various car forums or third-party Web sites are sufficiently able to clarify,” advises McKinsey.

Manufacturers can arm sales managers with mobile dashboards of real-time inventory stock, pricing, & customer preference notes, to empower sales teams to coach and support. Transforming salespeople into trusted advisors who provide deep technical and market expertise, will become a competitive advantage for brands throughout the shift.

aureso connected retail map
3. Country-Wide Connected Brand Network
Customers no longer automatically purchase and maintain their car with the same dealer. Much like other industries – banking, insurance, telecommunications – they expect to walk into any brand-recognised dealership for maintenance or emergency repair, and easily retrieve their car history and personal preferences. This is a challenge for dealers, if disconnected from the rest of their retail network.

OEMs and dealers can start to build a connected framework, in order to utilise dealer, customer and vehicle data, to benefit the customer. While vehicles can anticipate service requests – low tire pressure, oil change needed, low battery, etc. – OEMs and dealers can proactively automate service appointments. Dealers will be equipped with more timely parts management, and customers will gain a simple, worry-free maintenance experience. Together, dealers can leverage their extensive network to share the same database, and standard of quality, to gain customer loyalty and retention.

Overall, three core customer expectations are reshaping the retail automotive industry; forcing dealerships and manufacturers to become increasingly interconnected and customer-focused. The customer expectations will certainly grow and strengthen in 2016 and beyond, notably with the emergence of connected cars and autonomous driving.

For more discussion, contact our CEO, Tobias Meister, directly.