To gauge the pace of change in the automotive industry consider this at its peak in the autumn of 2021 Teslas market cap was equivalent to all of the next ten most valuable carmakers combinednot bad for a company that was less than 21 years old Times are changing and its not just about the shift from the internal combustion engine to electric Even the most cherished car brands are racing to find new and better ways to connect with modern audiences.
Engaging the next generation of consumers who are environmentally conscious digitally savvy and have higher expectations of brands than ever is a huge challenge for the traditional manufacturers From the billions BMW has spent modernising the Mini to the queue of companies announcing plans for an all electric future classic car brands are reinventing themselves across the automotive world Heritage and status aren't enough today a challenger mindset is critical to stay ahead.
Skoda voice assistant
Skodas vehicle assistant Laura proved so popular that it was promoted into a sales support role.
Simultaneously with the product transformation the retail experience must also be reinvented given that consumers expect to be able to experience and buy almost anything online While a car will never be a one click impulse purchase EYs Mobility Consumer Index has indicated that up to two thirds of car buyers now use digital channels to gather information That figure is highest among Gen Z and Millennials Meanwhile a recent McKinsey survey found that 29 of European customers want to buy their next car entirely online.
Therefore a shift from traditional showroom models to digital first retail experiences is underway in the automotive sector and the most successful brands are getting ahead by crafting an online customer experience that fires on all cylinders.
Digitalising the retail experience
Aided by emerging technologies like augmented reality AR virtual reality VR 3D visuals and the metaverse some automotive brands are now offering customers immersive online experiences which allow them to explore car models customise features and take virtual test drives from the comfort of their homes.
Brands including Audi Skoda Auto and BMW were the first off the starting grid Recently Ford unveiled a virtual test drive experience for the launch of its all new electric Explorer SUV available on desktops and mobiles. For Ford this is only the start Two months after launching the Explorer it announced plans to transform the customer journey for EVs introducing digital touchpoints at every stage.
Last year also saw Fiat dive into the metaverse Accessed directly through Microsoft Teams Fiats virtual dealership recreates the feeling of a showroom.
Fiat Metaverse
Fiat believes the metaverse showroom represents a revolution in customer experience.
Leveraging cutting edge technology will likely separate the winners from the losers The tech allows automotive brands to reach new and existing buyers at a far greater scale while still providing the personalised experience of a traditional showroom.
Building trust in online
But theres still a lot of work to do to build trust in online car buying Most buyers still want to physically inspect and test a vehicle and according to EY only a quarter prefer online channels for their final purchase Innovative solutions like virtual consultations can help to build that confidence Fiat isn't the only brand experimenting with AI chatbots as part of the sales process Skodas in vehicle assistant Laura proved so popular that it was promoted into a sales support role acting as a personal consultant for customers Laura has since been rolled out across several European countries.
New digitally enabled financing options are also becoming increasingly popular Subscription models which give drivers access to cars without longterm financial commitments arent new but the rising cost of living has generated new interest McKinseys survey indicates that 33 of buyers are now open to trying them.
If more is needed to show the direction of the automotive industry just look at Amazon The tech giant is a bellwether of e-commerce and this year the platform intends to begin selling cars To survive past icons must become the bold challengers of today That means adopting a positively dissatisfied mindset never settling and always striving to be one step ahead In an ever changing digital landscape brands cant afford to be slow especially when some are already speeding ahead.