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October 21, 2021 07:18 AM

How dealers can win in the omnichannel age

The digitalization of the entire car retail journey has been accelerated by the COVID-19 pandemic

Marco Marlia
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    MotorK CEO Marco Marlia

    Marco Marlia is CEO and co-founder at MotorK, a software-as-a-service provider to the automotive retail industry in Europe the Middle East and Africa.

    Luxury goods retailers have been investing heavily to start building an omnichannel customer experience. High-end consumers now seamlessly move between multiple channels at different stages of the retail journey because these retailers know their clients demand the same level of service whether the interaction is online or offline.

    In the very near future, the car retail experience will be much like this.

    Customers will move between different online and offline touchpoints, receive dedicated and customized support and services, choose to carry-out the entire transaction online or decide to work with a dealer.

    The core driver of this transformation will be the digitalization of the entire car retail journey, which has been accelerated by the COVID-19 pandemic.

    According to Capgemini, 72 percent of consumers now expect to be able to purchase their next car online.

    The analysis we conducted on our partners' websites showed an increase in traffic of around 23 percent in the first eight months of 2021, compared with the same period in 2020.

    While the data seems to indicate the decline of traditional auto retailing practices, I am convinced that automotive dealers are the one most capable of creating an experience that customers want.

    Auto retail is complex. Experience and execution are crucial to creating a profitable and sustainable business.

    Last year, digital players such as Cazoo and Cinch sold about 57,000 units combined online, which represents less than 1 percent of the total number of units sold in the UK, according to  Autocar. This result came despite the boost given by the pandemic and the fact that those players seem best positioned to succeed in the digital era.

    Why didn't they dominate?

    According to Capgemini, 92 percent of customers consider a personal touchpoint with the dealer to be essential in their decision-making. This is also why the so-called “digital disruptors” are going offline, investing in traditional showrooms or outlets. An example is Cazoo, which has announced plans to open more customer centers around the UK to create “a hybrid model for selling cars.”

    In an analysis of the link between Netflix and technology, Ben Evans, one of the most prominent Silicon Valley venture capitalists, points out that the content giant, although backed by a powerful and excellent technological infrastructure, is not a pure tech company but a TV channel that uses technology wisely.

    The same applies to Cazoo or Carvana. They are not technology-only businesses even though they are currently valued and seen by the market as tech players. Both are retailers that use online channels wisely.

    Similarly, using technology in the right way can enable traditional car retailers to not only compete with the newcomers, but to have a competitive advantage because dealers can offer a superior in-store experience and integrate it with new online capabilities.

    After more than a decade developing digital products for auto dealers, I'm convinced that the shift to the omnichannel model is imminent for car retailers.

    The speed and the complexity of the market's evolution cannot be understated. To remain competitive, dealers and automakers need to take a hard look at their technological infrastructure, which in many cases is fragmented and hindered by legacy, bespoke systems.

    This means traditional automotive retailers must adapt and seamlessly integrate world-class technology into their existing brick-and-mortar operations to win the market.

    This is the time for automakers and dealers to investment in technology, logistics and brand support opportunities for rapid innovation, as luxury brands have already done. To do this, they will need the support of partners that can ensure dealers successfully adapt to meet the needs of an omnichannel age.

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        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
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        • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
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