Dealerships, Free Access Articles , ,

Karen Spear

FOR all the buzz surrounding ‘disruptive’ technologies and trends coming at car dealers, there are still plenty of car buyers who want a first-hand experience both in terms of touching the car and dealing face-to-face with dealer staff.

This was the view of a number of expert presenters addressing the potential for disruption flowing from changing consumer expectations at the recent Australian Automotive Dealer Association (AADA) National Dealer Convention on the Gold Coast.

Although dealers today face the challenge of keeping up with the expectations of consumers who are becoming accustomed to the extreme convenience and instant gratification provided by their smartphones, research shows they still value being able to touch and feel their prospective purchase and finalise the process with the help of a human.

Deloitte Private director Karen Spear said that during recent customer workshops conducted for an OEM, “every single customer spoke of how important having a physical product experience and that personal experience with a human was as part of the buying process”.

Several speakers described how footfall at showrooms had dropped dramatically so far this decade – but without harming sales volumes – and that customers were showing up armed with hours of research into the shortlist of brands and models they were interested in.

“They are informed when they come into the dealership, so they have quite high expectations of what they are going to get when they actually arrive,” said Ms Spear.

“However, at the moment there is a bit of a gap and we are not meeting those expectations for the delivery of that experience.”

The consensus at the convention was that for dealers to succeed in this environment would require integrating the customers’ online experience and to make the transition from there to the offline buying process more seamless, while upping the level of education about in-vehicle technologies and making the conversation about value rather than price.

Darren Slind

JD Power vice-president for South Asia, ASEAN and Oceania Darren Slind said consumers were subconsciously wondering why car dealerships struggled to match the slick, differentiated and convenient retail experiences they were accustomed to courtesy of innovative players such as Apple, Amazon and Starbucks.

“Those dealers who ignore the customer experience revolution will be challenged by non-traditional competitors,” he said.

Google automotive industry manager Alex Heat concurred.

“Customers are comparing you to the best retail experience they’ve ever had,” she said.

“So have a think about how you’ve seen technology integrated into some other experience like Apple for instance and you start to get a feel for what really delights customers.”

Ms Spear also recognised this trend, with 80 per cent of automotive customers surveyed by Deloitte regarding experience as important when deciding where to buy their vehicle.

Mr Slind was one of several speakers who recommended dealers should take advantage of the “democratisation of technology” happening in mainstream cars by evolving into the role of educator and facilitator.

“I think we have a tendency sometimes to assume customers understand all this tech. But the reality is often they are too afraid or embarrassed to ask and we have an obligation to not only facilitate the comfortable and convenient acquisition of their car but also to educate them to take full value of the technology they just bought.”

Speaking to GoAutoNews Premium on the sidelines of the AADA convention, ANCAP CEO James Goodwin used the recently-launched Toyota Corolla as an example of the education-based sales opportunity now opening up to dealers.

Alex Heat

“If someone today is trading in a three-year-old Toyota Corolla, when they last researched buying that model three years ago, technologies like autonomous emergency braking, lane support system, traffic sign recognition was unheard of in that price point,” he said.

“We can see that education is important to enable to get the most from their car, and that Toyota Corolla is quite a stark example.”

Ms Heat told the audience that 77 per cent of Australians thought the car-buying experience could be improved.

“They want a more personalised experience, a more helpful experience. How can we rise to this? Obsess about their needs and meet the high bar of their expectations,” she said.

“We can’t influence what’s coming off the manufacturer’s production line, but we can absolutely influence how we engage and communicate with potential customers.”

Ms Heat described a trial using Google technology by a Sydney BMW dealership that enabled customers to educate themselves about in-vehicle systems and technologies before they took a test drive, so they would get more out of the experience.

Toyota Australia vice-president of franchise development and regional operations Evan Tsirogiannis also demonstrated a potential merging of the customer’s online research experience with the traditional human-to-human contact of a dealership through an online chat portal in which the entire process could be conducted through a smartphone, or as a combination of online and in the dealership – with the same sales representative during the whole process.

Using technology to improve both customers’ experience and outcomes for the dealership is not limited to the sales process. Mr Slind described the effect of introducing a tablet-based system for service advisors that made customers feel the process was more transparent.

He said it increased the uptake of recommended work (beyond what the customer originally came in for) from 15 per cent to 27 per cent, boosting the average value of a repair order by $150 yet customer satisfaction was also higher – so they were happier, despite spending more on vehicle maintenance.

Mr Slind also pointed to JD Power research that found the 10 per cent of customers who scheduled their vehicle servicing through websites or apps were measurably more satisfied than those who did not, and that 22 per cent of customers said they would use self-scheduling if they knew it was available.

“Because it’s a grudge purchase, making it more convenient for the consumer is a great way to facilitate their ownership experience,” he said.

By Haitham Razagui

Manheim
Manheim
Gumtree
Manheim
MotorOne
AdTorque Edge
PitcherPartners
Gumtree
DealerCell
Schmick