Subscription News delivered straight to your inbox.


How Can Auto Brands Futureproof their Businesses in a Digital World?

Sarah Ramamurthy

This article is taken from OMG Transact’s latest report on 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.

Additionally, there are new players disrupting traditional trading models – such as Tesla, which, like Apple, sells its vehicles direct.

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.

Understandably, Covid-19 has accelerated certain trends and there’s been a massive need to drive e-commerce further and quicker across multiple categories.

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

If brands don’t set up a new strategy for success, they risk failing their customers. It has never been more important for brands to speak directly to their customers to ensure they have a seamless journey from start to finish.

So, what are our top three tips for success?

1. Reassess the role of the dealership

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.

Take Tesla, for example. It doesn’t have dealerships and instead has Tesla Stores that are usually found integrated into a popular mall or shopping centre. But these stores are just showrooms and to make a purchase you must go online.

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.

Ultimately, nowadays the research has already been done before you step into a dealership – the consumer has already read the reviews, configured specific models and seen how it drives with augmented reality and videos.  

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.

2. Embrace digital and data with a sophisticated strategy

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.

For maximum success, however, these five steps should be followed to ensure digital and data is holistic from product development through to point of sale:

Align technology so you can manipulate the first-party data.

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.

As the service versus product sales continues to grow, applying AI to create up-sell and buying opportunities will be critical.

Having a plan for data that can be leveraged to commoditise partnership opportunities is critical, eg service stations, grocery stores.

Decide the role for virtual showrooms, VR and video content.

3. Adapt your retail model

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.

The cars of tomorrow will have a fixed fee at the point of purchase and buyers will be able customise the car as and when they want. For example, unlocking the ‘cheetah mode’ for the weekend when driving on the German autobahn. Or, if it’s an electric car and you’re in a hurry, unlocking a faster charging unit.

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 ensure success in the future, it is now imperative for automotive brands to adapt business models and adopt new technologies and initiatives to ensure consumers are getting exactly what they want, how and when they want it.

To download the full report, Future Proofing Your Business in a Digital World: The Auto Industry, click here. Sarah Ramamurthy is the marketing and PR manager at OMG Transact. This article was written by Sarah Ramamurthy from The Drum and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected].

Fresh subscription stories delivered to your inbox, weekly.

Subscribe to Subscribed
By using the website, you agree to the use of cookies. Head to our cookie policy to learn more about cookies and manage cookies on this website.