How to create an e-commerce channel in the automotive industry?
The automotive industry is changing quickly to include the purchasing of vehicles online, and very soon companies who do not include this option as part of their buying process are going to be left behind.
Lots of car buyers can’t be bothered to visit showrooms and browse dozens of cars. Many of them already know what they want, and they want to go online and order it for delivery, the same way they order most other items. This means the automotive industry needs to look into creating an e-commerce channel.
The online purchasing experience has progressed from simply purchasing books to purchasing homes, boats, and even cars. Shoppers who have taken a liking to the speed and ease of online shopping are driving these changes.
But how do you create an e-commerce channel if you’re in the automotive industry?
Statistics tell automotive companies what consumers want:
- With the rise of digitisation, consumer satisfaction with car purchases has risen to an all-time high of 72% in 2020, up from 60% in 2019.
- Currently, 80% of consumers say they want to do at least some of their vehicle shopping online.
- In comparison to the last time they purchased a vehicle, 64% of car buyers want to handle more of their purchase online.
- In 2021, 25% of consumers said they would only buy online.
- Online-only retailers are seeing annual revenue growth of more than 100%.
How to start transitioning your automotive site to an e-commerce friendly platform
At the moment, there’s a good chance you aren’t set up for e-commerce yet. This is a relatively new concept in digital land, most certainly fast tracked by COVID, and so lots of smaller car providers don’t have the capacity to set this up properly yet, but that doesn’t mean there is nothing you can do to prepare yourself.
To get started, begin the process of transitioning to an e-commerce-ready-platform by initiating online lead generation that focuses on getting people interested in your product and then, over time, make this more advanced by allowing for the configuration of products you are selling, as well as product add-ons as part of the e-commerce journey. At this stage, the functionality of the platform is considered as static.
A content manager will be able to help you with this, or you can try generating content yourself by taking note of the most common search terms that lead people to your site or others, then writing content around this.
You can improve this as backend systems are added to your organisation that allow for live pricing and product fees
Keep your eyes on your major competitors
Don’t stop there. This is now a very basic set-up. These systems are moving constantly, technology is fast-paced and ever-changing, and your car buyers will not expect a clunky system, so it’s best to be aware that you’re going to have to make constant improvements to your system. This is a never-ending process once you’re in it but one you can’t afford to miss out on. The sooner you adopt an e-commerce channel, the better your revenue will be in years to come.
Once you have a basic set-up and lead generation system, your next step will most certainly be giving business access to the new backend systems to ensure that changes to products, prices and the content on your website are instantaneous. This will give consumers what they have been craving for a really long time; real-time data about what is available for them to buy.
You’ll need to take extra steps with fully online/e-commerce retail to ensure the car buyer fully understand how the tools work, offer speed and efficiency, keep providing transparency into pricing and process, develop clear and fair guarantees and warranties, as well as provide individual assistance when necessary.
Your organisation’s agility is most certainly determined by how quickly you can make changes to live systems, and often we find that web developers and engineers are still responsible for making changes. The main issue with this is that people are slower than machines. The process is lengthy and there’s lots of work involved so the ideal would be have streamlined workflows that feed into the system automatically. That’s time your technical staff could be spending on doing other, really important things, like figuring out how you can stay one step ahead of the competition with a top of the range and agile online system.
At Digital DOM, we often speak to clients about how fast changes can be made to the production system, by gaining feedback, and reiterating what the users and stakeholders demand and we often find out that this can take weeks or even months, even when there are processes that are performed daily.
Personalisation for e-commerce
The next most important part of creating an effective e-commerce channel is personalisation. It is extremely important that you are able to gather data and make sense of it, then utilise this data to create personalisation for each customer. That’s how you’ll sell more cars.
That’s the ultimate goal, right? To sell more, make more revenue and to keep up with the latest consumer demands?
A case study – Ford adopting e-commerce
Ford has always been known for being forward thinking and quick to adapt to the market, and the case is no different here. Now, they want to go fully online when it comes to e-commerce, and the company’s agile way of working means they will probably achieve it.
They’re already reinventing the supply chain with systems that automatically update manufacturers when parts are needed, to reduce the risk of slowing down production and make them more efficient than ever before.
Now, they’re using the number one e-commerce site in the world – Amazon – as their inspiration.
They’ve started by letting everyone know their plans and being very transparent by taking us all along their journey. They’re looking to give customers an experience that includes a birthday party for your car, where they’ll update its software and give it a full detail.
They first wanted to do this in the year 2000, but the dealer network resisted. Now, Ford isn’t hanging around any longer. They’re looking for ways to work with dealers to sell online in a way that means cars are not only ordered online and delivered remotely, but where that happens 100% of the time, and where the system of taking care of those vehicles is all done digitally and without error. Their aim is to increase the number of customers who come back to buy another Ford car.
A case study – Hyundai UK digitalising the customer experience
Hyundai UK was a pioneer in digitalising the customer experience, first through its partnership with Rockar, and then through its national online sales platform. The Rockar store did the trick for Hyundai’s visibility, brand awareness, and market presence in the United Kingdom. Despite this, the success of a digital store with an online booking platform but it was very local, with 95% of buyers living less than 10 miles from the store.
Hyundai noted dealer proximity and relationship as key purchasing factors, with the power of bricks-and-clicks outreach done correctly understood to be the most important learning from the Rockar experience. Extending this concept to its entire dealer network may have sparked the concept of ClickToBuy – a national online sales platform that equipped and enabled potentially all Hyundai dealers to go online and reap the benefits of a seamless brick-and-click experience via a central new platform. However, the platform’s customer acquisition has been quite low, given that over half a million visitors to its platform have resulted in total sales of less than 2,000 vehicles.
Car manufacturers such as Volvo, Dacia, and a few other companies have initiated their own online sales platforms with their own process flows, and there is now sufficient data to close the gaps in selling cars online. The online platform is becoming more dynamic with each iteration and will soon be a natural alternative to visiting a dealership.
Digital changes automotive brands noted
Almost every notable car manufacturer, including BMW (one of the first to embrace the concept of an online vehicle retail platform), Mercedes-Benz, Jaguar Land Rover, Daimler, Peugeot, Citroen, Hyundai, and Ford, has set up a sales platform on their official website to sell vehicles either directly or through their dealerships.
In the automotive industry, there are numerous examples of excellent digital transformation, ranging from product innovation to operational change to customer-facing improvements. Here are some examples of how automotive companies have implemented digital change:
- Tesla has long been a forerunner in the use of artificial intelligence and big data. They’ve been collecting data from drivers using on-board sensors since 2014, allowing them to push a wireless update that improved the accuracy of their autopilot software.
- Polestar, a Volvo brand, has been named the best-positioned car brand for online sales. Their Polestar 1 and Polestar 2 models, like Tesla’s, are only available online. Volvo does, however, keep dedicated “spaces” at physical locations in partner dealerships.
- Volkswagen collaborated with AR-based application developers to label automotive parts with the appropriate tools. This system, known as MARTA, improves the efficiency of service technicians.
Automotive companies like these, understand that adopting digital innovative methods reduces human error during inventory and order management, in addition to increasing efficiency and lowering costs. These elements should be part of every carmaker’s and distributor’s future-proof strategy to help them scale, remain resilient, and expand into growing markets such as direct sales (D2C) or B2B2C alongside existing channels.
Digital DOM can help your automotive company embrace e-commerce channel sales
The automotive sales and distribution model has remained relatively unchanged since the 1980s, even with technology radically changing other industries. The way the world shops for fast moving consumer goods (FMCG), consumes media, and interacts with their friends has been transformed by technology and thus the automotive sector needs to take heed.
Changes are not happening all at once, and they vary by retailer and consumer, but the industry is nearing a pivotal point in its transition to e-commerce.
Which is why it’s important as an automotive dealership to partner with a company like Digital Dom to keep up to latest consumer demands. We deliver complex and high performing systems and help businesses increase speed of innovation.
Digital Dom offers full stack mobile and web development services based on agile practices empowering organisations with tools and processes for a truly enterprise-wide transformation.
We’re experts in digital strategy, agile programme delivery, web and mobile development, micro services architecture, and fully automated pipelines. Through large scale and high performing systems, we’ll help you increase your speed of innovation and decrease time to market.
We’d love to talk to you about creating an e-commerce channel for your automotive company. Please fill in our contact form to speak to a dedicated member of our team.