16th June 2021
The team at ETL were delighted to attend the annual Automotive Retail & Distribution Conference this week. The event, organised by ENG, usually takes place in a series of major European cities, but this year was held wholly online. Speakers from Jaguar Land Rover, Nissan, SEAT, Kia and more shared insights around the conference’s main topic of preparing the dealer network for crisis and post-crisis times.
These are some of the themes explored by the conference.
Create a seamless offline and online customer experience
The Covid-19 pandemic has necessitated a switch to online operations. Moving forward, omnichannel operations, encompassing both online and offline, will be important for successful retail. A speaker from Nissan anticipated that customers will revert to their previous behaviour to a certain extent; customers will expect to switch seamlessly between the online and offline worlds and a real requirement will be seamless integration.
According to a presentation by MSXi, 70% of customers start their car-buying journey online. A presentation from SEAT concurred, finding that 74% of car buyers discovered their vehicle online. But the same presentation showed that 47% of car buyers prefer to collect their vehicles from a dealer, compared with 25% who prefer home delivery. SEAT highlighted the importance of good remote assistance during the online journey to ensure high conversion rates, alongside a system that works on multiple device types.
While some aspects of the customer journey are expected to remain predominantly offline, SEAT are in the process of digitising the whole sales process, including aftersales. An online car configurator is one of their first initiatives. But from a dealer network perspective, some delegates were concerned that a tranche of dealers have yet to embrace new technology, and will struggle to move to a more digitised process. Other delegates were concerned that smaller dealers will find the costs and use of new technology to be prohibitive. For instance, creating videos of vehicles is a time-consuming process that is hard to scale. But there was agreement that dealers in good locations with well-trained staff are likely to continue to perform strongly.
Unhindered access to data
Delegates agreed that access to customer data – and their GDPR opt-ins – is far more straightforward for companies selling vehicles online. For traditional sales models, it is not always clear who owns customer data: is it the manufacturer, the dealer or, in some instances, the finance company? A speaker from Nissan highlighted the company’s very close focus on data. Nissan’s strategy is to share data with the dealer for mutual benefit. Jaguar Land Rover concurred, explaining how customer data is shared with the dealer networks to keep the customer connected throughout his or her journey.
The conference found that options such as predictive marketing, when data is used to predict customer needs, are still not always fully exploited.
A speaker from SEAT highlighted the need for robust online and offline systems integration to provide a seamless customer experience. Nissan’s speaker shared how speed of data movement is crucial.
Delegates agreed that the growing agency model will enable manufacturers to have greater access to customer data.
Focus on customer lifetime loyalty
A speaker from Jaguar Land Rover outlined a typical customer journey and demonstrated the need to engage the customer at every stage. The company aims to create a sense of belonging and a great experience by using tactics around CRM, the showroom experience and experiential marketing. One example shared was the offer of unexpected renewal proposals to prevent customers from evaluating other brands.
Speakers from SEAT highlighted the use of added value options such as service packages to keep the customer engaged with the company. This was backed by information from Jaguar Land Rover, who maintain customer contact via specific programmes to encourage their customers to visit service workshops after their third year of ownership.
A speaker from SEAT shared that flexibility is a new area of focus for the company. SEAT have identified freedom as a compelling new customer need, driven by new technologies delivering increasingly immediate gratification. This is reinforced by new competitors such as car sharing services. SEAT are therefore creating subscription models to improve the flexibility of their offering.
Part of the flexibility initiative is to ensure that all services are omnichannel, offering the customer maximum options and a seamless experience. Future initiatives include the sale of merchandise and accessories online for the Cupra brand, and improved online visibility of dealers’ stock.
Build a strong retail model for EVs
A speaker from Kia shared the company’s Plan S strategy, one pillar of which includes a focus on electric vehicles (EVs). The company plans to launch seven new EVs by 2027, alongside four derivative vehicles.
The conference was told that electric vehicles offer challenges for manufacturers, dealers and customers. Some dealer groups, for instance, will have high costs in getting sufficient power to their sites for charging points. A growing market in second-hand EVs will require charging networks to be designed for the future as well for current vehicles. Kia are partnering with the Ionity charging network to offer more charging options for their customers.
The issues range beyond the scope of the automotive industry, encompassing regulators and industries such as construction, who need to invest in EV infrastructure for their residential and commercial builds.
The conference agreed that consumer education will be key, not just in the various types of electric vehicles but how to live with an EV on a daily basis.
The conference looked at Norway as an example of a successful, if ongoing, transfer to EVs. The country’s success is driven by a combination of government initiatives, focus by manufacturers on battery life and range, and customer education by dealers.
Drive quality through the dealer network
A speaker from Nissan explained how the company is expanding its culture of quality. The aim is to be one of the top three brands for customer satisfaction.
Nissan dealers are increasingly measured in terms of customer quality and loyalty at every touchpoint. The company is using a combination of precise management reporting and mystery shopping to identify performance shortfalls and successes. These are then addressed with reward and recognition or greater management focus.
A culture of quality is being enabled with updated training and certification, staff retention initiatives and a scheme where external consultants work with dealers who require extra support. As a result, the gap between the top 25% of Nissan dealers and the bottom 25% has closed by 10%.
We’re looking forward to future automotive industry events; see ENG’s programme here.