CommentaryMay 26th, 2020

Everything has Changed, FOREVER! The Post COVID-19 World of Automotive Retail


The world’s great philosopher Mike Tyson said it best:

“Everybody has a plan, until you are punched in the mouth.”

Well, we all just got punched in the mouth. As a business, we had plans to become more digital; we had plans to keep evolving customer experiences; we had plans to provide more technology and tools to help us do business with a customer. These plans just became the new standard price of entry into a consumer’s consideration of buying, leasing, or servicing a vehicle with a specific brand and dealer.

The Long-Lasting Effects of COVID-19

As we look to emerge from the immediate impacts of COVID-19, there will be long-lasting effects on auto retailing:

  • Some consumers might not want to shop at a physical dealership ever again (fear of crowds or even financial fears of having to invest or make payments for an automobile if they are struggling financially)
  • Jobs for some consumers might become more remote (work from home) permanently, and thus their need for transportation (at least owned) may diminish
  • The On Demand and Gig economies are now at the forefront with the recent stay at home orders. We have found ourselves able to sustain our way of life with goods and services delivered directly to us.
  • Others will look to manage future life mobility needs with more On Demand and accessible platforms (car ride services, car sharing, subscription models, etc.)
  • Many people are becoming more technologically savvy than ever before. Some are relying on apps like Zoom for communication, YouTube videos for instructional information and life tips/tricks, and general communication on connectedness and overall experiences.

So, what does this all mean for Automotive Retail?

It means the “WHAT” to provide and the “HOW” to provide it must change immediately.

WHAT: Auto retailers must provide a completely customer-centric experience. This is not about a transaction but rather a relationship. Customer interaction will be as, if not more, important than a car sale. How can we bring the customer into the platform or eco-system of what we offer? New cars, used cars, service, parts, and maintenance are a given. But the right package for mobility, the right financial arrangements, and the right set of services and experiences are all necessary.

Perhaps customers will need a car just on the weekend, or servicing done at remote locations, or transportation on demand, or the phone and Bluetooth available to be transferred from car-to-car frequently. Think of consumers’ mobile lives and their access to available service in an instant–that is the world a dealer must now be a part of going forward.

Auto dealers must continue to adapt to even more services and offerings around fleet management, EV charging and services, rental, and subscription models, and more. But, the main immediate “WHAT” that auto retailers must provide, is a personalized experience and ongoing journey relationship. Consumer wants and needs will be further magnified in this current and post COVID-19 world. Customer relationships, offers, and experiences have to be customized. From the beginning stages of engagement, the traditional internet lead, to test drive, to hours of paperwork and process, needs to change.

HOW: If the “WHAT” is changing, the “HOW” must also change. Starting now, there will be more need in the future for:

  • Complete virtual shopping (research, pricing, comparisons, guided services). More online chatbots and virtual assistants will be integral.
  • Inventory, the right vehicle, and the right mobility package offerings that go beyond just what a dealer has in stock; it may require a creative package of different vehicles, services, and payments.
  • Test drive availability anywhere, anytime. This includes vehicle drop-off and pick-up outside dealer locations (customer home locations.)
  • As with a sale, provide the same pick-up, drop-off, and remote availability for service.
  • Complete online financial process (offers, reviews, affordability calculators, and all paperwork.)
  • At home delivery and walk-arounds (that may be done through virtual assistants as well.)
  • Used vehicle or trade-in remote and virtual evaluation (photo uploads and price guarantees.)
  • Other accompanying services rolled into general services (insurance, window repairs, registration and titling, other mobility packages included.)
  • User-friendly tools and interaction for payments, vehicle reminders, necessary updates, and related conveniences.

Four Major Areas of Focus

In effect, there are four major areas of focus for now and the future, that will make your business sustainable.

  1. Focus on Customer Care: reach out to customers, find out their needs, create new ways to service their needs. More than ever, be “customer-centric.”
  2. Meet Customers in Context: be where the customers are in their needs and journey. Create methods for pick-up and delivery, engaging customers literally at the experiential and physical location of their needs.
  3. Imagine the Post COVID-19 World: understand what will be forever changed. The way customers will want to interact, the new business services they expect, and what it will mean for business models to be able to transform (process, technology, and physical changes).
  4. Become Adaptive: the biggest lesson and capability to focus on out of this crisis is to become more in tune with upcoming challenges and opportunities and the ability to sense-and-respond rapidly. Adaptability is the capability to be able to shift and pivot on the what you deliver, and how you deliver it.

This is the how of what we must do immediately and continue to build on for future sustainability. There is no maybe about this, it will now be the expectation and need of consumers going forward. The auto industry and the retail environment must be up to the challenge of delivering goods and services in a personalized, meaningful, and valuable way.

Our New Norm

While the pandemic has been challenging for all of us, it will have long-lasting effects on how we must do business with customers going forward. I have personally experienced all of the above in the last few days with food and grocery deliveries, lawn mower repair, ordering and delivering prescriptions and more. This will soon be expected and demanded in automotive retail. This is our new norm.

Ready the business model, ready the staff and training, and ready the communication and technology to be engaged with customers on their terms. While it may cause some pain and duress on the current business model, it is a model to sustain the future. It will move dealerships from being a physical lot of inventory and fishbowl of sales transactions to a future auto retail platform model able to adapt and serve customers in a new, more valuable, and forward-thinking way.

Dennis is the Head of Automotive Industry, Innovation & Transformation at Capgemini Invent. An innovative strategist and transformer, Dennis’ experience includes driving brand and customer strategy into market and profit realization. 

Dennis is a change artist who creates tangible business value through ideation and visioning, creative marketing strategies and process implementations, strategic business transformation and customer understanding and delivery.

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