Industry veterans understand that manufacturers and dealers are essentially separate businesses. But while the two entities are also felt to be separate from a consumer experience standpoint, consumers don’t particularly care how the industry is structured. They only remember the experiences they have when buying their cars.
Walking through a typical buyer’s process reveals flaws that can – and should – be addressed. These customer-dealer discrepancies have become the focal points of many industry startups. Taking a customer-centric approach on the automotive space, these newbies are blowing up the status quo – and digital integration remains one of the incumbents’ only ways out of the rubble.
In the used car segment, a new breed of auto start-ups has cropped up with digital retailing at their core. Examples such as Beepi, Carvana, and Shift are leading the charge with enhanced consumer experience and service through mobile and digital channels.
Another market force, outside of the competition for online sales, is the shift in consumer behavior precipitated by changing generational ideals. These core values and expectations are ultimately shaped by major events and technological developments within a specific generation’s lifetime. Millennials (those born between 1981 and 1996) make up over one-quarter, or 27 percent, of the US population. Over the next ten to twenty years, this group’s spending should rise as they approach middle age, thereby increasing the group’s influence on future dealership trends and viability.
With increasing competition and consumer expectations, how can leading auto players shift their business gears to digital?
Dealers, and the original equipment manufacturers (OEMs) that support them, need to figure out where in the process digital automation versus personal interaction is required. While inventory tools and payment calculators can be automated, deal formation and test drive coordination cannot. Like many others, the car business is built on relationships. Both the digital tools and (more important) the people behind the tools, need to work in concert to help build these relationships and reinforce trust by giving consumers a sense of ease, consistency, and control.