What does digital mean in today’s automotive industry?
Digital has become an overused phrase when discussing anything that isn’t ‘physical’. In the context of a dealership Alistair Jeff, Commercial Director at RTC, defines digital as ‘a forward-thinking consumer-centric process that encapsulates both the physical and online processes into multiple channels that support the customer when, where and how the customer wants.’
If businesses don’t keep up with the pace of digitalisation, they risk falling behind and potentially losing customers. This is a very real threat for dealerships. According to Michael Widdup, Head of UK Aftersales at Inchcape UK, ‘digitalisation and connectivity is still in its infancy, we’re just switching on to the fact that this is our future way of retaining customers and communicating. Especially in the automotive industry, technological advances are going as far as self-diagnostic vehicles, so digitalisation will be key to the future of the industry.’
But this shift isn’t just pushed by manufacturers, it is demanded by customers themselves. As technology becomes integrated with everyday life, from a young age consumers start to expect digital options at every stage of the customer journey.
This choice, says Christian Mark, CEO and Co-Founder of Tjekvik, is an essential part of the customer journey: ‘We’ve reached a critical point where consumers consistently ask for digital solutions and automotive is no different. People want flexibility and choice. That’s what makes a good digital dealership.’
How can automotive retailers start moving towards a digital future?
To transition successfully to a digital future, dealerships need to be prepared, starting with a proactive, decisive strategy. Anders Kragelund, COO at Tjekvik, suggests that retailers should anticipate the impact of electric vehicles to deliver digital solutions and self-service options worldwide. The importance of preparing for digitalisation is to ensure that both service teams and customers are ready for the changes. Digital solutions should seamlessly integrate into the customer journey without competing with human advisors, but rather compliment their existing work, providing necessary relief when the dealership is busy.
Embracing digitalisation will improve customer service, making dealerships stand out against their competitors. Andrew Moss, Aftersales Director at Inchcape VW, advises learning from your competitors and moving quickly and efficiently to set the standard for self-service in the automotive industry and establish trust with your audience.
According to Alistair at RTC ‘A modern dealer doesn’t have physical and digital as separate channels but blends them seamlessly.’ A good dealership tailors to everyone’s needs, whether they are a tech savvy user who prefers to check-in online or someone who prefers to chat to service advisors. The key is to integrate the two so that if a customer changes their mind, their information is already in their preferred channel, ready to use.
Consider the benefits
Digitalisation can offer numerous benefits to dealerships, such as improving document management, reducing environmental impact, and enhancing customer experience.
One of the primary advantages of digitalisation is the ability to manage documents more efficiently. This means that instead of having to deal with stacks of paper documents that can take up valuable storage space, digital documents can be stored on secure servers that are easily accessible and searchable.
In addition to improving document management, digitalisation can also have a positive impact on the environment. By going paperless, businesses can significantly reduce their carbon footprint and show customers that they are committed to sustainable business practices. This can help improve the dealership’s reputation and help to attract environmentally conscious customers.
‘Digital’ can also help improve customer experience. Digital service receptions can be personalised to each dealership’s requirements, allowing them to show customised questions that are delivery-driven and target the customers with relevant offers. This can generate £25-30 of extra revenue per check-in, and improve the customer experience by providing a streamlined, convenient process for servicing and repairs.
What are the challenges to digitalisation?
One of the first challenges the automotive industry faces is acceptance. Encouraging staff to see digitalisation as a way to ease their current workload and decrease stress is critical. Digital solutions give staff the opportunity to undertake higher skilled work and to focus their effort at delivering exceptional experience to their customers.
Another key aspect of change management is the understanding that the customer has made the choice to use a digital solution long before they set foot in the dealership. Today, the customer journey begins with online research. ‘In our industry, the customer should have the ability to do 80% of the whole buying cycle 24 hours a day, 365 days a year, because of digitalisation. The same applies to aftersales,’ says Christian. ‘Dealers need to deliver digital options, as the best customer experience is the one the customer chooses, delivered well’.
From buying a car online to using a digital check-in desk, the automotive industry must therefore consider how they can integrate digital solutions at every stage of the customer journey, because however challenging, it’s what the customers expect. As Alistair points out ‘Gen Y and Gen Z consumers expect a blended ‘digital’ approach and will start looking for dealers who offer these services. Cars are getting more technical and have integrated apps and connectivity. Retailers must therefore embrace this opportunity – there is money to be made and costs to be saved with ‘digital’.
Looking forward to a digital future
Alistair’s advice is: ‘If your digital partners can’t help you with things like online booking, digital check-in and check-out, and paperless processes you need to question whether they are the right partners for you.’ Though developing and integrating digital solutions may be a hard task, it will be the key differentiator between a struggling and a thriving business in the future automotive industry. So, dealers must prepare, assess the competition and embrace technology in order to prosper. As Andrew puts it, ‘if you don’t do it, chances are you won’t be successful.’
