Omnichannel increasingly part of vehicle buying process in key markets

12 December 2017 5 min. read
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While changes in the automotive industry are transforming cars, a new study has examined how shifting customer expectations around the car buying process are set to affect how car dealers are perceived. The omnichannel experience, in particular, may play a key part of the wider purchasing process.

The automotive industry is undergoing significant changes, as climate changing pollutants and various health damaging pollutants are increasingly removed from the wider transport value chain, largely by a shift to electric vehicles and renewable energy generation. Automation  is on the horizon too, while new sharing models and connected vehicles shift ownership and change how vehicles are used.

A new report considers how dealership may change as well, as customers increasingly shift to online channels as part of their wider purchasing journeys. A new Bain & Company report, titled ‘The Future of Car Sales Is Omnichannel’, explores the effect of changing consumer behaviour on dealerships whose models, by and large, haven’t changed from traditional dealership methods and channels.Headline results

The 5,000 car buyers involved hailed from five of the world’s largest markets, namely China, Germany, India, the UK and US. The headline results regarding how consumers are now engaging with the car market, highlights increased inter-action between online and offline shopping channels.

For instance, around half of respondents begin their purchase journey online, while the research to purchase process takes 9 weeks on average. Buying online has become a norm among some of the group, with 25% noted as potential users of such a service by the firm

changes in omnichannel journeyThe research sought to identify the interactions between online and offline behaviour, and how those interactions resulted in eventual purchasing decisions. While almost 50% started online, a good proportion would then go on to visit a dealership, before returning to an online channel.The second touch point noted a higher proportion of those who use an online channel (47%) to those who visit a dealership (41%).

By the third touch point, 31% of respondents had made a purchase, while the split between online and offline touch point stood relatively evenly at 35% and 34% respectively. The split between those who shifted from an online to an offline channel was relatively consistent throughout the shift between touch-points, which points to a relative interplay between channels.Test drivesThe research also found that dealerships are frequented less, on average, than in previous years – now 2.4 times before a purchase decision. The dealership remains a key touch-point, with test drives remaining a particularly important part of the process, particularly in India and China with 3.1 and 2.7 such drives respectively, while UK drivers required 1.9 such trips.

Test drives are not the only type of use that respondents make of the dealership. The research found that, in addition to testing, determining final configuration and making the actual purchase in person at the dealership were also key factors.Key decision points already madeOne area that dealers need to take into account is that various decisions are often already made prior to visiting the dealership. Customers in India (75%) are particularly set on key decisions, including price, brand and model. In general, decisions around price stand at around 65% for pre-determined decision making, while it comes closer to 70% for brand. Decisions on model are somewhat lower, at around 60%.

In recent years, brand loyalty has decreased with customers, with the report noting that the pre-determined decisions do not necessarily stem from loyalty as such. One area that impacted on decision making, was word of mouth from friends, family and colleagues, which represents a key information source for 44% of respondents; online reviews and test sites were relied on by 30% of respondents; while dealers come in third at 26% of respondents.Car configuration sourceFinally, when it comes to configuring the vehicle, various external sources were leveraged for advice. Dealers remain a key decision support, although the website of the manufacturer comes relatively close as a proportion of the total. Brochures come a distant third, while few rely on an app produced by a manufacturer. The respondents also noted that dealers tend to be the most recommended source in terms of net promoter score (at a net 48), followed by websites and app (38 respectively). Brochures are relatively underutilised.

“Automakers and dealers must adjust to the changing expectations and needs of the digital natives, whose importance to the broad automobile market continues to grow,” explained Bain partner Dr. Klaus Stricker, co-author of the brief and head of the firm’s global Automotive Practice. "Enabling customers to seamlessly interact between digital and traditional channels requires enormous investments in omnichannel concepts."

Recently, BCG Digital Ventures demonstrated how digital natives may change the nature of car dealerships. The digital solutions arm of the consulting firm helped VW leverage a new web platform to sell second hand vehicles, partnering with a number of second hand dealerships to ensure quality and pricing control.