As discussed in one of our recent blogs, the coming years will bring a lot of change to the car industry, pointing it firmly in the direction of digitalization. We’ll see a significant move from our glass and concrete showrooms towards all the information being stored and accessed in a cloud. This comes with the inevitable challenge of reorganizing budgets to increase the investments going into technology. But this is not the only obstacle to overcome.
Embracing the new
As much as the current situation and ever-changing demand from the customers is steering the car industry towards digitalization, embracing the new and letting go of the old may be quite challenging for some dealerships. What 2020 has shown us is that we have to be able to adapt and do it quickly in order to stay on top of our game.
It seems that the willingness to change differs quite a lot in different regions. As countries in Eastern Europe have had to grow and develop fast to catch up with the Western countries during the last decades, they seem to be more open to embrace the new and make the necessary adjustments fast. On the flip side, countries in Western Europe are more prone to holding onto traditions and not as eager to pack up the physical showrooms and setting their businesses up in a cloud.
Another thing that plays a part in this switch is the size of the showrooms. Big dealerships and showrooms that have had a strong online presence for a while thanks to their quality webpages and top-notch car configurators are clearly more prepared to move their businesses online. During the time of social distancing, many showrooms put out boxes where the customer could leave their keys and pick them up later. This was another clear step towards self-servicing and reducing the need for human interaction.
However it’s important to note that the move towards digitalization is not solely in the hands of dealerships and showrooms. Their development relies strongly on the steps and speed of factories and car manufacturers.
All in all, the readiness to change seems to be there. It’s more of a matter of who can adjust the fastest during these confusing times.
What is happening online?
Before taking your dealership online, there has to be a clear understanding of how to make the most of this opportunity. One of the most important things to have is a quality car configurator. If the customer can’t physically touch and inspect the car they’re after, they need to be able to get a detailed overview of what the vehicle looks like. This means being able to change to color, add equipment, view of the car from different angles, etc. Modera Webfront offers a great tool to help the customer build exactly the car they’re looking to buy, while giving the buyer the confidence to make the purchase.
Another aspect to consider is the fact that customers want to be able to reach you at all times and have their questions answered fast. If a customer contacts you via Messenger, the salesperson has to be ready to carry out the conversation then and there and give the customer all the inquired information. As this is a real-time conversation, people expect to be responded to immediately.
As mentioned before, digitalization also means the rise of self-service. Giving the customers the option to easily pick up and drop off the keys in a specific box, saves time not only for the customer but for the salespeople as well. Not to mention the convenience aspect of it all.
As e-commerce is on the fast lane to success with no finish line in sight, the best location for any store seems to be online. Taking that and the importance of our environment into consideration, Modera has started to build a purely digital car sales platform. The project has received support from Norway Grants and EAS and is well on its way. You’ll be able to find out more about it in the future from here.
Innovations in the digital world
The changes don’t just stop after moving the showrooms online. The digital world of the car industry is constantly growing and new innovations are coming in by the minute. We can already see showrooms implementing virtual reality into their sales process giving customers the chance to take a test drive without leaving the lot.
The main challenge lies in making the transition from online to the physical showroom as easy as possible for the buyer. The whole process should feel like one smooth ride from doing the research online to booking a test drive and finally visiting the actual showroom. Modera Showroom helps guarantee that each step in the purchasing process is as simple and smooth for the buyer as possible. Consumers are looking for convenience in all areas of their lives and purchasing a car is no different.
Is this the end of physical showrooms?
Although a huge portion of the car sales process has and will continue to move online, we don’t see this being the end of physical showrooms. The yearning to touch the vehicles and actually try them out is still there for the customers.
The biggest difference compared to the past is the amount of investments that need to go towards technology. So far all emphasis has been on building a glass and concrete infrastructure. Now it is increasingly important to build a digital infrastructure to match the customers’ expectations and this means reorganizing annual budgets significantly.
An opportunity for the newcomers
While big and established car manufacturers have ruled the market for decades, it hasn’t been easy for newcomers to find solid ground. With the exception of Tesla, consumers haven’t exactly welcomed them with open arms. As digital cars are now hitting the market, this may present an open door for the newer and smaller brands.
As technology is developing at a rapid speed, cars communicating with each other or with their owners is not some crazy concept only seen in movies. We’ll most probably see this happening in the near future and if new companies jump on that trend, there’s a good opportunity for them to really make a name for themselves.
However, these developments come with high risks, which cannot be overlooked. With cars communicating with each other, manufacturers must take extra precautions to guarantee the safety of the consumers. Just imagine a scenario where a terrorist decides to hack into a manufacturer’s system and push the gas pedal of each car to the floor. This is where big players in the car industry bring in small up-and-coming companies to help them guarantee a smooth and safe implementation of digitalization.
Volkswagen, who is one of the biggest car manufacturers in the world, has recently announced that from 2021 to 2025 they will be investing 73 billion dollars into future technologies and 27 billions of that amount will be going towards digitalization. It is clear that the investments going into innovation are significant. Established and respected companies are more open to involving new and innovative companies into their development strategies.
With all the innovations and new technologies, consumers will be looking to, first and foremost, invest in safety, so this should be the main focus on any brand when embracing digitalization.