Automotive Blog

OEM new car sales initiatives online – more channels, more variety

PH Blog

Various players in traditional retail have begun to set up initiatives, giving customers the choice to shop for products via different channels and formats. As part of the mix, many operate B2C online sales channels. Take MediaMarkt as an example and imagine you want to buy a new mobile phone or TV, you would have the choice between ordering from home via their online store, or you could walk into one of their traditional stores, or buy from or deliver to one of their (currently few) Digital Stores. Ideally, there would be a high integration across the different touchpoints which enables the customer to switch channels whichever way easily – in reality, this is still work in progress.

Also with automotive, customers prefer a mix of touchpoints for different steps of the buying journey, with most still carried out at a traditional dealership. However, our 2017 Consumer Survey revealed that around 20% would ideally like to finalise the deal and finance online – this is based on their current experiences. And with whom would they generally like to do this? Of course, with an OEM and dealer online channels which they trust, instead of buying from physical/online retailers or other player types. Within the last couple of years, OEMs in particular - more than dealers - have addressed this demand by offering different types of online channels with at least some transactional capability.

There are offers around raising awareness and engagement for special or limited editions which are only or initially ‘sold’ online through deposit placement, such as for the re-launch of the French sportscar brand Alpine in 2017, or for the XC90 limited edition (back in 2014).  We have also seen more advanced lead generation channels, offering broader vehicle and specification ranges, e.g. Dacia UK or Smart Italy. Others – as the channels for Citroen and Peugeot in France – are solely focussing on selling cars from existing stock, initiated by the deposit payment followed by completion at the dealer. This is the only category where quite detailed lead-times and instant trade-in valuations are offered, with the latter considered as an important decision factor that is relatively simple to implement but not commonly on offer yet. We saw that some OEMs are trying to integrate the online channel with the dealerships, but the journey ‘flow’ is usually only possible from online to offline – a category we call ‘Limited Omni-Channel-Capability’, which would apply to the channels of e.g. BMW UK and Peugeot UK. One step ahead is the Rockar UK online channels (Hyundai and JLR) with has a seamless two-way connection between online and the stores, but not to the wider network. It is the most integrated model, offering the possibility to complete the transaction for a wide range of models and finance options, as well as instant trade-in valuation. Recently in November 2017, another new online channel has been implemented in collaboration with Rockar – Mitsubishi UK’s ‘Mitsubishi Buy Online’ ( Subscription type online channels are offered by Cadillac (’Book by Cadillac’), Porsche North America (‘Porsche Passport’) and Volvo (‘Care by Volvo’) across different markets and partly for now run as a pilot. The latter is related to the launch of the new XC40, currently only available when combined with a mobility services packaged ‘subscription’ for 2 years. Clearly, across all these initiatives, we have seen some differences by market and brand, and for single brands across markets.

Ultimately, OEMs need to provide facilities that match individual expectations and reveal needs in a convenient and engaging way, e.g. through lifestyle configurators. One of the core questions is around how to cater for the needs of engaged and unengaged customers at the same time, with the latter wanting to spend only a short time and completing the purchase immediately. Basically, the full buying journey can be supported online – under consideration of issues on implementation, price control, or distance selling protection – but may not be needed for all brands and models, or by all customers. Therefore, a kind of “anything is possible, but not all is required” mindset matching brand and potential RoI should be at the core of consideration when planning the implementation. This goes along with the main challenge to contribute to additional sales for the whole network, rather than cannibalising sales from dealers, which in turn impacts restructurings in returns for participants across the network that contribute to a sale in some way.

If I personally wanted to buy a new car, I would enjoy the convenience of conducting the next steps after desk research online, including placing a deposit. However clearly, no virtual test-drive or 360-degree configuration can replace the physical experience, touching and driving the car, if desired. So, I guess physical dealers will still welcome me in the future for test-drive and payment, and presumably similarly for most customers that value a direct personal relationship and support.

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