Two Steps Ahead: How Buying Behaviours Are Changing in the Automotive Industry
Gone are the days of travelling to and from various dealerships week after week. Gone too are the day of scheduling endless meetings to check out a vehicle that may or not be suitable for you moving forwards.
Thankfully, the introduction of easily accessible dealership databases means the customer journey has been refined over time. Indeed it's now smoother than ever, making all that unnecessary hassle a thing of the past!
Access to the information of a vehicle remains a key contribution to the smooth running of the customer journey.
Having a car’s breakdown to hand will allow customers to instantly make decisions based on visual appearance and quality, specification, age and mileage. Moreover, they can align this with the needs of daily life.
Not forgetting the ‘filter’ tool in said databases, which allows for optimal personalisation of what the customer sees. This ensures they're presented with results tailored purely to their wants, as well as their needs. Who said beggars can’t be choosers?
But how does this all affect the buying behaviours within the automotive industry itself?
BUY AS YOU PLEASE
Giving the user free choice to see personalised search results is akin to putting them in the driving seat (pun intended). Suddenly, they control their purchase journey.
However, this means that dealerships will now have to keep up with those more particular needs.
One way this could be achieved is by ramping up marketing relevant to the individual customer’s online analytical data. This means if a customer is looking for opinions on a brand of car (Volkswagen for example) on Facebook, retailers will effectively need to ratchet up the display of tailored advertising. This will ensure the user will see advertisements promoting the types of Volkswagen they have in their storeroom.
This is another benefit of online automotive retail; the ability to visualise and process customer interest has made it easier than ever for retailers to show the people what they want to see.
This - by extension - allows them to make informed decisions about their desired product in a quicker timeframe.
ADVANCING OF THE PRODUCT
Equally as important as the evolution of tech linked to the customer interface is that linked to automobiles themselves.
Take electric cars for example. Socio-political interests have sparked a newfound public interest of eco-friendly vehicles, thus generating a new category of car entirely.
Post-COVID, a study from McKinsey and the World Economic Forum showed that interest in Original-Equipment Manufacturers (OEMs) had risen worldwide by 26% (Source: How is consumer sentiment changing in the vehicle industry? | World Economic Forum (weforum.org)).
Coronavirus clearly allowed customers to step back and reconsider their driving habits, with the rise of remote or hybrid working, as well as reduced spending on non-essential purposes at play.
The numbers would indicate that customers used this time to reconsider their current vehicle and ‘splash out’ on a newer, more sustainable model.
INTRODUCTION OF ELECTRIC VEHICLES (EVs)
Looking at electric vehicles in particular, the same study showed that “More than 70% of survey respondents stated that delivery of goods should shift from vehicles with internal combustion engines (ICE) to BEVs or H2EVs [Electric Vehicles).'
The demand for EVs has had a huge impact in the way that cars affect the climate. Moreover, the introduction of EVs has had a reciprocating effect with car manufacturers. This is true even of our Eurac site in Poole, where we’re cutting down on carbon emissions via the use of e-forklifts in our warehouses.
And it’s not just us. Manufacturers all over the world are focussing more on recycling, energy-saving measures and collaboration on pollutant-reducing processes... all in the interest of our climate. And our customers.
EFFECTS OF SUSTAINABILITY ON THE MARKET
One might think making the jump to a sustainable practice would be a high-cost, low-return operation. Interestingly enough, this is not the case.
McKinsey’s study reflected a large percentage of customers who were willing to pay the additional premiums for an eco-friendlier vehicle. To put it into a wider context, this shows that buyers are willing to pay more for premiums that fit their specific requirements.
Another article from McKinsey states the following:
“The automotive industry’s mobility transformation promises big changes for automakers worldwide. To win in this new, more extensive playing field, industry incumbents need to stretch beyond their current comfort zones to participate in new value opportunities.” (Source: Addressing automotive customer experience | McKinsey)
The battle between supplier and demander
In summary, the times they are changing, and customers are beginning to realise that the power rests with them.
Now that information regarding vehicles is readily accessible, dealerships must be wary that there is nothing stopping them from simply clicking away to another retailer with an array of better-tailored models, at better-tailored prices.
It’s a game of cat-and-mouse between supplier and demander, and it’s only a matter of time before the supplier accept it’s they who must remain two steps ahead.