The auto retail industry customer journey has traditionally been based on a face-to-face, transactional interaction at dealerships. There was broad agreement that Covid has sharply increased appetite for digital customer offerings. Even prior to 2020, around 90% of the customer journey started online, according to a McKinsey report. The digital future of auto retail runs throughout the entire journey, with structures that support the customer across multiple steps, not just when signing papers.
As electric vehicles (EVs) come in, one impact on the auto retail business model could be overlooked: the National Automobile Dealership Association (NADA) indicate that 49.6% of retailing revenue comes from servicing and, as EVs tend to be less prone to breakdowns/need less complex mechanical servicing, this revenue stream looks to be drying up. In fact, Futurice UK Chairman Trevor Didcock explored some of the implications of this with a recent article in Automotive World - COMMENT: Breakdown assistance must adapt to an electric and digital future
There was consensus throughout the discussion that innovation needs to be at the core of company culture. As companies digitise, deep-rooted structures can hold things back, so it’s important to build a team focussed on continual innovation and progression. A good tip is to focus on skills rather than niche sectors — skills can be adapted to changing market needs whereas sectors can become out of date.
Though auto retail has had a tough battle in 2020, in some ways it’s stress-tested the processes and plans in place. This has accelerated thinking about how to future-proof business models. Our conversation covered a number of ways in which we have – and sometimes should have – used this time to build a focussed and robust strategy to be executed into 2021 and beyond. Watch the full webinar for more insight and discussion with Simon Dixon and Giles Delafeld.