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How will the contactless customer experience affect automotive retail?

With over 20 years working in Automotive (many of those years leading teams focused on customer journeys and improving the digital to physical experience at Arnold Clark and Lookers), it’s fascinating to see how the industry is adapting to the unprecedented challenges of the last few months, whilst helping to facilitate ongoing change.

Even before the current pandemic, the demand for online retailing was growing exponentially. According to a report by Statista into online retail sales, the value of ecommerce in the UK exceeded £2 billion in 2019, up from £777 million just three years earlier. Now, with lockdown and social distancing part of our everyday lives, we’re seeing businesses in all industries having to adapt to meet the increased demand for online and contactless interactions – and some are more prepared than others.

Woman using her mobile phone at a deskConvenience is often cited in consumer surveys as the main motivator for buying online, with ‘always open’ websites providing unlimited access and flexibility to fit in with our busy lives. The ability to compare quickly and easily the products and prices from different retailers online is valued particularly highly at a time when access to physical retail centres is limited.

During 2019, it seemed that the automotive world was catching up with other sectors on ecommerce. In recent years a number of manufacturers and retailers have invested heavily in their online ‘shop-fronts’ to meet increasing consumer demand for digital interaction. With 92% of car buyers researching online before they purchase a car, there was a growing need to support a seamless sales journey that could shift from digital to physical and vice versa, according to the needs and preferences of the individual customer and where they are on their purchasing journey.

This shift, combined with the Covid-19 pandemic, is posing new challenges for automotive retailers, many of whom operate costly showroom facilities, staffed with sales teams remunerated largely through commission. Those retailers who were early ecommerce adopters are reaping the benefits now. They have been able to hit the ground running as lockdown restrictions ease, with a better understanding of customers’ online behaviours and how this differs across various age groups and demographics.

Man with tablet device typing on it, stood next to a white SUV car inside a showroom during bright daytime

A recent McKinsey Insight article into how businesses can prepare for the ‘next normal’ outlines three key priorities to deliver short term success and strengthen long-term strategic positions:

Strategic Positions
  • Prepare for Digital Recovery
  • Accept a safe and contactless customer journey as your default
  • Anticipate, don’t just ask for, customer feedback

My view is that automotive retailers need to consider each of these points as they prepare for the future and understand the vital role video can play in achieving these priorities.

Prepare for Digital Recovery

Now more than ever consumers are taking control of how and when they want to be contacted – and video is becoming an increasingly important tool for businesses.

According to a recent survey by marketing software experts HubSpot, 72% of consumers said they would rather “learn about a product or service through a video” than via any other means. Our experience at CitNOW confirms this fast-growing trend: in 2019, a record 11.95 million videos were created by car retailers using our platform, up from 9.95 million in 2018 – a 20% year-on-year increase.

We expect this trend to only increase further as lockdown restrictions have resulted in many people using video as their main form of communication with friends and family, and as a result have become more accustomed to interacting via video. For automotive retailers, video provides customers with the next best thing to face-to-face contact and the personalisation it affords is key to its popularity. It provides a level of emotional connection comparable to visiting a dealership, enabling the retailer to share detailed vehicle information and deliver a tailored response to meet the exact requirements of the customer.

Responding quickly to leads is extremely important. A study by LeadResponseManagement.org found that a salesperson is 100 times more likely to connect with a prospect when responding in under 5 minutes compared with responding after one hour. They are also 20 times more likely to qualify the lead. This is reinforced by an EY study into emerging trends in automotive retail, which found that four out of five people buy from the first person they come into contact with. Video can be a vital tool for boosting responsiveness: bespoke video messages can be filmed and delivered to a customer’s inbox in a matter of minutes, ready for them to view at their leisure.

Accept a safe and contactless customer journey as your default

Have you taken time to plan your new customer journey? CitNOW has started to chart what this looks like in the short term. Of course, it is important that consumers are able to take any route they wish through their journey. Don’t forget to add the customer delight.

Diagram showing reciprocal sales cycle. Too many words to list unfortunately.

CitNOW recently launched a new live video feature for retailers within its CitNOW Sales and Workshop apps, to enable remote face-to-face interactions with customers. The live video functionality enables salespeople and workshop operatives to hold two-way conversations with customers to deliver a seamless yet contactless journey. Look to see how this feature can improve your new contactless journey.

Anticipate, don’t just ask for, feedback

Once you’ve mapped your journey and agreed the tools you are going to use, test it yourself. How do you feel? Are you getting the emotional connection that will trigger you to trust your company? Are you enjoying the experience and will you feel comfortable stepping out of your comfort zone? If not, change it. It’s ok not to get it right the first time.

Carol Fairchild (CCO)Ensure you look at your customer feedback once live and evolve the journey. The chances of you getting it right the first time are highly unlikely. For example, I regularly check the CitNOW ratings and feedback numbers and globally our customers achieve 4.8 stars from 5 on average. Do we look at these and congratulate ourselves, or do we pick out the low ratings and try to understand the issues to make sure we introduce the right changes?

As we start to emerge from the effects of the pandemic we are seeing volumes of video output approach pre-crisis levels. The diversity in output is also increasing as businesses develop a better understanding of new customer behaviours – and these new behaviours are here to stay. It’s highly likely that consumers who get accustomed to this new contactless world will continue to use the many new digital offerings that have soared in popularity during the crisis, with safety a top priority. For the auto retail industry this means more virtual tours, increased transparency around hygiene in dealerships, remote services and contactless vehicle handovers.

And while circumstance and necessity have been driving the rapid uptake of video production, recent events have made the public even more comfortable receiving information via video. So now is the time for businesses in all sectors to integrate video into their sales and aftersales processes, to allow them to adapt quickly to changing market conditions and demonstrate their understanding of what matters to their customers.

Connect with me on Linkedin to further engage with all of the changes in the automotive industry.