Dennis Ephlin

Head of Auto Industry, Innovation & Transformation | Capegemini

MBA Marketing. Innovative Marketeer. Over 27 years of experience driving brand and customer strategy into market and profit realization. Director and VP level positions in world-class organizations including IBM, General Motors, JD Power, and PricewaterhouseCoopers. Dennis has led multi-million engagements in go-to-market approaches, e-commerce strategy, revenue growth, and business transformation at blue chip clients, multiple industries, and successful start-ups.

Need Management over Lead Management

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It seems like a simple concept.  Take care of people’s needs first and foremost.  Yet, it continuously falls short on the planning and execution when the transactional mindset and objectives take over. We spent decades instituting and enforcing a “customer satisfaction” survey process.  That was supposed to put the customer first right?  But that was a post-mortem grade on how a dealer rated versus other dealers, in most cases on a transactional process, not really aimed at customer’s true needs in the first place.  We have now evolved to the concept of “customer experience.”  But we still chase it as if it is something we can develop and invoke upon the customer.   When in reality it is the “customer’s experience.”  They own it.   They dictate how they will perceive it and value it.  We merely need to be able to be flexible and personalized in our approach to their needs. I would argue vigorously that the future of retail, the success of the dealer footprint going forward will depend much more on Need Management versus Lead Management.  By its very nature leads are cold, transactional, and aimed at getting people into a car within the current sales month.  Needs are obviously more personal, more relevant and contextual to the exact need for the interaction and engagement.  Needs may not be aimed at a traditional sale either, but perhaps a service, or a question for now, or a more personal approach to the right vehicle and right financial arrangement. This proposition may sound basic, but the entire retail industry is built on a sales leads funnel to get people in and through the process and then survey them and ask how we did.  Our focus must shift if we hope to have long-term sustainability in retail in an industry and a function that is fast transforming.   As EV’s and other digital services and subscription models enter the scene, as new car inventories will be in flux through 2022 and used cars become an option, we must personalize the experience to focus on customer mobility and transportation needs. Even in the traditional new car sales process, we often miss the need.  As more customers move to digital shopping and retailing (you all know the increasing numbers), they are required to figure out their own need before they hit a human or the store.  We ask them to figure it out through a wonky pricing and configuration tool where they must select option codes and packages they are not even sure they want or need.  Most of us in the industry struggle knowing the difference between a trim level, model level or an option package.  The customer often muscles their way through it and lands on a “build and price” vehicle.  That then becomes the lead!  But have we really identified and resolved the need? I believe the whole process needs to be tipped upside down to start the with the need.  What does the customer (The “UP”) need?  It may sometimes be information they want to support some decision making that is hard to find in a sales brochure online system.  It may be information about best mobility options.  Assuming for a moment it is a vehicle that they want to own and acquire, is a new or used vehicle the best fit?  What type of driving will they do?  What are their weekly commuting needs?  What is their budget target?  Are they better of buying, leasing or even subscribing where available? I am not naïve enough to believe that the very process of moving inventory, monthly sales targets, transactional commission-based sales people are supportive of the idea of taking the necessary time to understand the customer need and taking the appropriate actions to deliver on that expectation.  What is success in automotive retail and sales will have to change. I would argue it already has changed.  Good dealers were already transforming processes and success metrics to understand that the future retail sustainability will be based on lifetime value, products and services, experiences and customer affinity to the dealer brand and experience.  The past year and a half with a global pandemic that changed customer expectations and mobility needs, and also disrupted supply chains for the foreseeable future, have all created more value on build-to-order (personalized orders) and personalized engagement for customer fulfillment of needs (not just sales). The new business imperatives that will drive success in the auto retail industry include: Access over Assets  The importance of the ability to engage the customer where they are in their journey as opposed to simply having inventory available.  That “permission” and capability for access and engagement is move valuable (even on a balance sheet) than the physical assets. Personalization over Transaction How much of the customer’s true needs were met versus our simple goal of a unit sale.  Transaction may help the monthly sales quota, but personalization will contribute to the customer lifetime value and the business sustainability. Service is not an event, it is an experience Treating every service experience as an opportunity to engage the customer deeper in their needs fulfillment entirely as opposed to a maintain or repair the product only mindset Users over Owners Leverage any and every customer who may want to engage with us at the retail level whether that be for product information, used cars, mini-fleet access or subscription models, digital services, maintenance and updates, charging, or future services as the goal over simply supporting owners only with the basic vehicle services.  They may not even be a “customer” in the traditional sense, but every interaction is of potential value for both parties in building a long-term relationship. Retail is not a location, it is an action and a relationship This means more than mobile delivery or service pick-up and drop-off.  How do we use retail experiences, which should include every interaction through every channel, to build a relationship and understand the customer’s context and needs?  Retail, and all it entails, is an experience building opportunity. While I mention these as imperatives, there are objectives and measurables that should be assigned to these efforts.  There should be focus on the people, processes and technology all aligning to this mission as the North Star experience.   It’s always easy to raise issues, but what are the solutions?  There is no one path forward to achieve these objectives and each dealership will need different focus and transformation depending on its maturity towards this goal. Let me offer a few thoughts and enablers I would consider critical to pivoting to need over lead. Define your North Star customer experience.  Clearly and concisely.  Is it well understood and communicated through the organization? Is the North Star experience supported by the right processes and measurables? Personalization not Transaction focus.  Do we really know and understand the customer needs? Do we have the right data and information to understand and respond appropriately to the need?   Are we asking the right questions and capturing the information? Does our technology share actionable insight, or does it just enable transactional processing? I would not suggest that this initiative mandates and overhaul of your technology platform and entire business processes.  But could they all be sharpened and aimed at the right objective?  I would suggest they could be optimized for this long-term success strategy.  Let’s utilize customer management systems and data across the organization (regardless of department or function) to create additive customer journey and customer need insight at each interaction.   Let’s evolve our business processes to be “customer-centric” and not functional-based or organizationally standard. Overall, the future of retail success will be predicated on the ability to deliver personalized, valuable engagements on the terms of the customer.  Their needs being fulfilled is the future of retail, not transactional exchanges.  That includes the what, where and how.  Retail is not a physical location; it must be an experience.  Customer needs will be met by somebody, it is up to you to make sure that somebody is you.  
The Coming Wave of the Electric Vehicles and the Impact on Auto Retail

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The State of EV “Oh we gonna rock down to ELECTRIC AVENUE!” We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious! Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority. According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts: Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030 The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends . According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options. So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption? A few quick questions I have heard? Do I need to treat an EV customer different from my “normal” customers? Will I need a separate showroom or sales process? How will this affect my service business? What other considerations will I need to train my staff for in selling EV’s? The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on. So What Really Changes for Retail? We Just Sell Cars, Right? Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey. There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive. We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer. Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment. Major Challenges and Disruptions Growing customer expectations (On Demand Economy / Instant Access) Mobility needs shifting Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital) Electric vehicle growth (global view and movement) Autonomous vehicle technology On Demand services (including vehicle features themselves) Covid after-effects / Urban exiting / Virtual working (commute) Increasing mobility choices (mode, access) All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more. Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future. Shift Happens So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include: Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter) Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities. Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street? Enable employees to do what is right, not what is standard and expected. Leverage technology to enable frictionless experiences, not become more cumbersome. Always be customer-focused, agile and adaptive to their shifting needs These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.
Auto Retailing: Customer Experience Transformation Starts with The Basics

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The Steve Jobs quote has never rung more true. There has been so much conversation of late about digital transformation, auto retail reinvention and the "new normal." I have contributed to much of it. But what does that all really mean? What can a dealer or dealership really do to transform? What does "transformation" even mean? I believe a dealer needs to go back to basics and not get caught up in the hype of Digital Transformation. There is no silver bullet. In good automotive retailing, it has always been and will always be about delivering an exceptional customer experience. Technology is one enabler to support that effort. But it is not the end-all and be all. In today's high-tech world, we often approach an issue in the manner of  "the answer is technology, what's the question again?"  A dedication and execution of processes that are seamless, frictionless, integrated, omni-channel and personalized are ultimately what enables the orchestration of a customer experience. We have been swept up in Digital Retailing, Internet Sales, eCommerce and Mobile Delivery as a pursuit of shiny objects. It is all retailing at the end of the day. To the customer, there is one retail experience (sales and service and ownership journey). Their experience. Online or off-line and through every channel, the customer wants what they want. A Frictionless Experience As a consultant and an avid forum member in many groups, I have heard the word frictionless evolve over the last year or so as it pertains to great customer experiences. To be honest, the word first hit me as rather crass and not fitting for the concept of customer experience. But in actuality, it is the perfect description. What a customer really wants is seamless engagements, personalized recognition of their need and ease of interaction (through any channel, any time and without pause or reaffirming context each time). Frictionless also is more a result of a solid and integrated process as opposed to just a simple technology. I personally don't even like the phrases digital transformation and digital retailing. It is just transformation and it is just retailing. The idea that if something is "digital" or has a "digital" component that it is better or works well is not necessarily true. The technology or digitalization still is part of or encompasses a full process. That process has workflows and steps and sometimes humans that must all work in concert for the same alignment and direction to deliver the experience through that process, including the technology. Current State Many dealers have increased their technology spend and digital efforts significantly over the last few years. An average dealership now often has: Call Integrated Voice Response (IVR) systems,  Lead Management and CRM modules Internet Inventory, Search, Price and test Drive Requests and Lead Submissions SMS / Text capabilities Online Scheduling (sales and service) Online self-help or virtual assistants/chatbots Mobile Delivery and Service (Customer Pick-up and Drop off) Yet, with all those technologies and recent expenditures, the auto retail industry's general CSI scores compared to other industries have not risen and in fact fallen behind in relative comparison to other industries. In many cases the same issues and customer dissatisfiers prevail now as they did a decade ago. The following is just a compilation of some recent Consumer Reports and Forum posts on common customer issues: Why is it so hard to buy a car over the phone? Can't I complete the deal over the phone and Internet and just go in to pick it up? Why do I have to go into a dealership to get a price? How come I keep getting shuffled around the phone system and back to the operator? Why can't they honor the online price or quote? Why do they pretend not to know the correct sales tax or other fees? Why does it take 4 hours from the time I say I want the car? No matter what time I schedule to come in I always have to wait. It seems almost impossible to get an update on my vehicle in service. The final price for service always seems a lot more expensive than the original quote. I don't feel they really know what I need in a vehicle but they sell me what they want. Do any of these sound familiar? Technology or digitization has been added in most sales, service, and dealer operations areas, yet these issues persist. In recent IBM research, Millennials overwhelmingly stated they would rather go to the dentist than a car dealership. Perhaps the issue and root cause lie more in the overall mission, process and measurement of success for the customer experience. In some hopeful news, 65%+ of Millennials also stated they would be willing to pay more for a good experience. Basic Steps Forward The journey of transformation should start with a focus on basic processes and never stop evolving. Eventually, 90% or more of a dealership's workflows and processes either touch the end customer or affect their experience in some capacity. Those processes must be scrutinized to remove friction.   In order to maximize the transformation to a value-driven customer experience, start with some basic steps. The following is a framework to approach an honest view of your dealership process issues and potential resolutions. Define Success  - Of course, the ultimate goal is sales and profit. But what other measures define success for your dealership and your customer experience. What is the North Star vision you hold up as your customer experience? Can you define it? Can you measure it? If it can't be measured, it can't be improved. Customer satisfaction is too transaction and rudimentary. Deeper measures around customer engagement, information of value, time to interact and value of contact need to be assessed. Outside-In perspective  - Look at any process or workflow from the perspective of the end-user or customer of that process. What is it they are ultimately delivered in terms of interaction, value and personalization? Identify Barriers  - Assess what barriers exist from your dealership delivering the customer experience you have defined and laid out above. Is a process too complex? Does it have too many hand-offs? Does it require approvals or time to process? Root Cause  - Once barriers are identified, assess the root causes. Root causes could include lack of technology but often may be more about process definition, training, administrative complexities and lack of operational focus on what matters to customer experience. Process Improvement Loop  - As processes and barriers are assessed and changes and improvements are made, they should be documented and measured. But they should also never be at a finished state. The evolution of customer experience driven by customer-focused processes is an ongoing journey. This will continue to evolve the dealership in a more agile and flexible way. There is no "big bang" or "silver bullet" or technology that will solve all the issues. It takes a continuous and iterative process that starts with the basics. Summary Start with the basics. Do not be swept up that a technology or quick fix exists to change the actual dealership DNA of customer experience. View the processes, barriers and friction from the customer's point-of-view. What do customers want and expect that is not being delivered? Then work can begin on evolving the WHAT is expected and WHY it is not currently being executed. Make or keep your North Star of customer experience as the target of all processes, and continually work on evolving them towards that goal.
Auto Retailers: Customer Experience Needs to Be Your Differentiator

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Tom Knighton said it best, Customer experience is the next competitive battleground Customer Experience - the term is everywhere in business and even in society now. As with many business practice movements, the term has been misused and misrepresented. Over the past few decades, business has used and practiced the art of Customer Satisfaction, Customer Relationship Management (CRM), Customers for Life, Customer is King and even more mantras. They have all been attempts to put focus on the customer. But they often based those concepts on technology or a belief that there were tools that make this happen for a business. Customer Experience (CX) is not the same as Customer Satisfaction. Customer Experience is an emotional attachment and value that the customer owns. I would explain it using something we all understand. Ever have a meal and say "that was satisfying"? Simply asking this to yourself meets basic criteria but does not create a lasting memory. Now if you have ever gone out to eat, no matter how typical or fancy the restaurant and had a great table, fun company, excellent service, fantastic food, tasty beverages and overall enjoyed the event, that becomes an EXPERIENCE. You will likely continue to talk about it and treasure the experience, not just the food. What is CX Really? I would also push the concept further that Customer Experience is not the new business practice, technology, department or business function we simply build. In fact, Customer Experience is not something we as a business own at all - it is also personalized and individualistic. The customer owns it. The customer experience is what they think, feel, and believe they experience as a holistic interaction. We as a business can merely build and align the business processes, technology platforms, channels, training and metrics against a good customer experience. We must do it one customer and one experience at a time. We need to stop measuring and driving the industry on a transaction focused Customer Satisfaction score. We must begin to really understand, align and deliver against personalized customer expectations and needs to deliver a holistic experience. The Industry Issue In auto retailing, it is true that all the horror stories of the past and the bad image perception have scarred the current thinking about buying and servicing a car. Perception is reality. You will often hear people get excited about the prospect of the new car, followed by a sigh that they have to make a trip to "the dealer." In recent research, it has been conveyed that the Millennial generation would in fact rather go to the dentist than visit a dealer. According to several Consumer Reports articles, the main dissatisfiers with the retail process (despite vast improvements) continue to be: The sales representative made the experience a challenging and unhappy one The F&I process was too time-consuming, wasteful and confusing Getting the run around on the phone Not being able to match an offer or vehicle to a real deal All the haggling Lack of visibility, transparency and trust All the "back-and-forth" and time wasted Not concerned about the customer needs Now, compare that with experiences we have all had in other industries. The pandemic itself has highlighted and accelerated the ability of many businesses and industries to become more customer experience driven. Many are offering curbside pick-up and drop off, mobile delivery, omni-channel access, more virtual agents and self-help options and more personalization to suit the customer needs. I always like to share one simple CX example from an industry we can all relate to in our lives - pizza delivery. For a $5 pizza order from Domino's, or almost any pizza chain for that matter, you begin a customer experience journey. The full experience can include: Order through multiple channels Recognized by your name, an account ID, or your phone number as a previous or new customer Able to repeat a previous order with one swipe Given the ability to track your order through multiple devices Receive order updates Ability to change or add to your order up to departure of the delivery Notified when your driver is on your street or in your driveway Delivered within 30 minutes, as promised in the majority of cases  Given a discount or earn loyalty points for your order in many cases Asked (surveyed) after delivery about your experience. Not the pizza, the experience.  In some cities, the delivery is being tested with an autonomous delivery vehicle, or to a hot spot or mobile delivery spot of your choice All of this for a $5 pizza. At IBM we have a saying, "The last best experience you have, in any industry, becomes your standard going forward across all industries." So we all carry these experiences and increased expectations from recent events and business service levels into the auto retail environment. The stakes have now been raised even further for auto retailing. So Why is CX So Important? In my last article , I wrote about the possible future outlook of 2030 in the industry and auto retailing. The fact is that it is quite unknown. Will retailers become less relevant? How will service and parts business be sustainable in the current footprint with more electric and autonomous vehicles in the sales mix? What will be the new car sales levels in the next few years with the pandemic effect and more at-home workers (less commuting)? These are unknowns but the constant for the industry, or at least the shifting of the industry from new car vehicle transactions to a mobility enabler will be the customer. Traditional new car sales will not sustain the industry forever. The customers will. Customer expectations and customer needs will continue to shift, but we must adapt and be the provider of the experience. If you follow the customers, you will follow the revenue and profits. Their needs and their journey are what the industry will transform around. Auto retailers must build and become a "Customer Network Platform" for mobility, providing access, services and experiences... whatever they may be. An engagement, a bond and connection must be fortified between retailers and customers to transform together and not focus on the product, or the transaction, but on delivery of a mobility experience. That will secure the sustainability of a retailer in the future. As mentioned in the opening quote by Tom Knighton, "Customer Experience is the next competitive battleground." Businesses who deliver upon an experience, will find the right products, services and value bundles to offer and deliver to customers. The customers value the experience and they will drive their needs into the industry, or others will come in and deliver upon it. Five Action Steps to Take Now I don't want to paint a total doom and gloom picture here. Many retailers have taken great strides to improve customer processes, customer engagement and the overall experience. Much work has been done by many to improve system integration and data availability to help support a holistic customer experience. More focus has been placed on this issue and that is a good thing. Here are 5 areas I suggest be constantly focused on to continuously improve and keep customer experience the driving mission in your business. The recommended actions are: One view of the customer - Continue to integrate systems and data to have one single view of the customer. A service experience should not be a separate incident from a sales transaction or part purchase. It should be one single journey of that customer with personalized engagements along the way. Work to get one single source of truth of customer information across all channels, all departments and all engagements. Focus on need not the sale - One of the major reasons customers are so dissatisfied with the sales and service process is the lack of understanding, empathy and fulfillment of their actual need. Customers are often not asked about their needs for a new car, or their needs around timing or availability of a service experience but are rather mandated their options. Don't reward and measure metrics that only focus on transaction volume or transaction satisfaction. Make the customer experience the focus, the priority and the mission. Channel Consistency and Information Access - The customer process across any channel at any time should be one of consistency. Starting this process over and over each time they access a new channel or talk to a new person should not be part of the journey. The ability to quickly access information and find value is of utmost importance. Leverage virtual agents, chat functions and self-help functions to assist customers to access what they need quickly and easily. Examples include service updates, price information and inventory availability. Personalization - Don't lose sight as you begin building tools and capabilities to deliver customer experiences - they need to be adaptable to individuals. Each customer is unique and the focus should be on building and delivering capabilities that can adapt and personalize each and every experience. Customer recognition, customer specific need fulfillment and unique treatment will make each customer experience special. It keeps customers coming back, no matter the actual product or service of the future. Create "Wow" Factors - Find, develop and deliver experiences that set your dealership apart. What will make your dealership relevant and differentiated from the rest? Become known for something special that you can "own" and deliver. A "wow" builds the overall experience. Summary The Customer Experience will be what defines the future of our industry. The product, the transaction, the specific service will matter less. Why will they come and do business at your dealership? It cannot just be because of price or product availability, it must be more holistic and meet the customer's needs. Build and deliver a customer experience on each engagement, with each specific customer, over and over each time. This experience will define your dealership as being relevant and differentiating to a customer's mobility needs. This experience will sustain your business through unknowns of the future of the industry. If you enjoyed this article, take some time to listen to the latest podcast episode on Experimarketing  with  Colin Carrasquillo
What Will Automotive Retailing Look Like in 2030? A future perspective on the possible & probable scenarios

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Introduction Slight disclaimer, I am putting forward my thoughts and perspectives on the future of automotive retailing in 2030, not based on specific research, but rather on my years in the industry, the evolutions we have seen already, and the disruptive shifts of this global pandemic that all will carry forward. It is also not possible in a short paper to encompass all of the entire changes, but rather tries to highlight some significant transformations. More than anything, this perspective is based on the standing principle that the core business model of the way we buy and sell cars is not sustainable and survivable into the future. Something has to change dramatically. The industry will have to find new revenue sources, new offerings, and become part of a larger mobility ecosystem. So, what are some of the possible changes and shifts we will see in 2030 in Automotive Retailing? Overview One of the most significant shifts in the future of auto retailing will be the very concept itself. Retailing will not mean just physical selling. It will not mean a transaction at the brick and mortar dealer storefront. The very idea of "automotive retailing" will come to be known as a valuable customer interaction or engagement through any channel, any time and any way. The very differentiation of physical and digital will become blended.   Retail will be all "phygital"  (the intersection of digital and physical experiences), and merely an instance of experiences enabled through a customer journey. In addition, automotive retailing will not be centered around "selling" only, but be more inclusive of access and availability to experience products and services without a standard transaction of a new or used car as we know it today. It will include digital services, applications, brand attachment and engagement, and overall mobility platform access that is not about the sale of a physical product. The Future Perspective of Automotive Retail For the sake of trying to grasp a few major changes and shifts in 2030 for automotive retailing, I am going to twist the traditional sales cycle thinking into the "What," the "Where" and the "How" of what automotive retail consumers may literally not necessarily buy but "consume." The What To be clear, by the "what" I am referring to,  what  it is consumers will buy, or access, or consume. I firmly believe the idea of the industry being hinged to success or even survival as new car sales as the key success metric as a business model will not sustain. In 2030, and already underway, I see the "what" being  Access over Ownership.   Consumers of mobility will want and need access to commuting, transportation, or personal mobility. This mobility may be in the form of a new or used car in the traditional sense. Still, it may also be in some form of new transportation modes (including autonomous, ride sharing, high-speed systems, public city and urban mobility, mini-car fleets, electric bikes, and more).   The" what" will be a more personalized mode of mobility options and platform of access. The ability to access on-demand or leverage in short-term durations and have more choices that meet the consumer needs will be the key driver of benefit and success to this new model. The very "what" is the auto retailers and auto retailing will become about being a  customer mobility network platform , and not about vehicle inventory, transactions, and mechanical service. The Where This one is likely easier for all of us to imagine. The "where" is anywhere and everywhere. It is wherever the consumer of mobility and retail engagement wants it to be. It is digitally driven, and the majority of the process of engagement, if not all of it, will be accessible with a few swipes of a screen. But the "where" will also include the current dealer store and lot footprint. It will just be revamped to become more of a mobility access portal than just a blacktop of inventory (inventory station) and service bays in the back. The physical dealer in the future will contain other means of mobility accessibility, as described in the "what" above. The fleets of mobility access would include daily rentals and pay by the mile fleet availability, other forms of transportation such as autonomous and electric shuttles, e-bikes, and more. The "mobility center" (dealership) would also include electrification stations and the electrical shift from a car, or house, to powerplant and back as an exchange system and a means by which electric vehicle owners "make money" or transfer electricity as a value proposition. In addition, the "where" of assessing future mobility options will include urban centers, shopping malls, and various pop-up or shared brand locations. In these venues, people would be able to "test drive" or demo options of future mobility in virtual and augmented reality and gamification platforms. This digital gamification and VR/AR options would also be available online via tablets and mobile phones as applications. As for accessing the very mobility, this will include a much larger integrated footprint that is some cases, will include the OEM and dealer options and offers, but in other cases, be personal or city-owned options. These pick-ups, drop-off, and access centers could and will potentially include large parking lots, shopping malls, and other essential stadium and event venues, and in some cases, even smaller urban spots of convenience and high-volume easy access. The short of it for "where" is that where must mean anywhere and everywhere for the future of retail, as I have redefined it. Retail and access to retail options such as mobility access and digital services will be  "Phygital."  Retail will not be constrained to a physical location or a specific function, but be omni-channel, personalized value for meeting customers' mobility needs. The How I have eluded to the "how" in the what and where sections, but the "how" will be consumer-centric and consumer-driven. The how to access mobility could and will include various models such as standard finance or lease transaction and include subscription possibilities, membership or license models, daily and monthly passes, pay per mile and pay as you go options, and many more creative on-demand means. Just as the future of retail and the future of mobility will be a more dynamic and open platform, so to will the access and economic models have to be more personalized and inclusive of options. By many figures, the average household spends 10% or more of its net income on "subscriptions" currently. Those include streaming media services, gym memberships, cable and Internet access, and many other areas of our life. Why would our need for mobility not have such flexible, on-demand access? I know there have been some OEMs dabble in some form of a subscription model. Still, the retail level is where the consumer will be able to best physically and digitally interact with the available options and needs. I also don't want to blanket define "subscription" as just another fancy version of a lease. Whatever we may call it, the point is the "how" must be more dynamic, more flexible, more on-demand, and accessible anywhere and anytime. We have not witnessed much in terms of new financial terms or economic models in the industry since the creation of leasing in the late 1990s. Surely there can be more creative means to leverage the OEM and dealer assets in a value-add and additional revenue source while improving the actual customer experience and customer engagement options.   Summary All of the above is meant to merely lay out food for thought and the possible and, in many cases, probable new business models and customer expectation and needs that will be upon us in the next decade. As a dealer or retailer today, what do I do with this? Well, for me, it would strongly suggest and encourage that I have an eye on the future and start building my business model and capabilities to enable the new type of transformative experiences and offerings. While still grinding at the core business, I would start to accelerate opportunities and capabilities such as: Deeper customer connections (better data, better personalization, more interactions, more engagement, and more value-add offerings) A customer network platform approach Build technology, data, and integrated systems and workflows to treat the customer in context in their journey through multiple channels. Identify and begin to leverage new "what" and "how" capabilities New business offerings such as mobile service, mobile delivery, customer apps, rental and fleet possibilities, servicing for P2P or car sharing platforms, other mobility options like e-bikes. Leverage creative financial and access models for customers to the transportation such as daily rates, subscription models, low and flex mileage leases, pay as you go, and more. In all, start to redefine your own dealership as a mobility access center and not just an inventory lot. Start to measure success through customer engagement and experience. Create and measure new business offerings and services that expand your footprint in mobility with the customer and create new revenue opportunities. It is coming. We can be part of it as a bigger ecosystem or slug away at diminishing business models and relevance. I believe the disruption we see now will only continue and accelerate and revamp the "what," "where," and "how" of automotive retail.
This Is How Automotive Retail is Transforming

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In the earliest of days, weeks, and even months for auto dealerships returning to business (open doors at the facility), we are getting some encouraging early indications of leads being a decent volume, retail sales bouncing back a bit, and revenue and profit returning to levels of operational survival. At least that seems to be the narrative. Inventory depending on the brand and model can be challenging, but nonetheless, a fairly good bounce back from the days of March through May, by most indications. As being reported by Ward's and others, June auto sales will defy bragging about compared to year-over-year and by expected standards, but at least they're on an upward trend. July retail deliveries aren't expected to set off firecrackers either, and fleet sales with the rental agency bankruptcy and economic woes deflate total volume as well.   On a yearly forecasted perspective, there is some upwardly hope as well. Wards Intelligence expects June's seasonally adjusted annual rate to total 12.9 million units  (See chart below).  That compares with May's 12.2 million and April's awful 8.7 million. Moreover, it is well below June 2019's 17.2 million-unit SAAR and the 16.8 million deliveries that were predicted, pre-pandemic, for 2020. Yes, unemployment and production start-up and interruptions, consumer confidence, the pandemic, and fears of normalcy all weigh in on this. But are we looking at the right figures and metrics to see what is really happening?   Are we even evaluating the right measures?   I would also argue that we will have to shift, and in fact, transform the very way in which we both "sell" cars and evaluate the industry as a whole. While some indicators may not be entirely easy to quantify, there are new measures and KPI's that we must start considering, and in fact running our retail business by and guiding our new business practices and operations towards. Some examples of the new metrics that I believe will 1) drive survival through this crisis, and 2) transform your retail business into a next normal thriver, include: Now I am not going to suggest we throw out the old standard measures, but in order to transform, in order to think differently, we must establish new targets and metrics. These new measures will keep us focused on what the needs of consumers are and will be and how we fulfill them. In order to accomplish an auto retail industry and business transformation, I believe there are four major components (or capabilities) to consider: 1. Not vehicle sales, but vehicle usage The industry analysts, OEMs, captives and banks, third party retail portals, and certainly dealers must all monitor shifts to measuring and supporting vehicle usage over vehicle sales. I won't go into a ton of detail why the world of vehicle sales, vehicle needs, and vehicle mobility has been disrupted forever, but I think most of us realize it has. What we knew as daily work and social commutes, weekend get-aways, road trips, and all of our life is under dramatic shift and unknown future. What will be constant is our need for mobility when we want, how we want, and where we want.   This provides both a challenge and an opportunity for auto retailers. How do I support the market for people to gain access or usage of a vehicle, and provide the product, the service, and/or the experience to do so and make it a profitable endeavor for my business? In fact, how may that actually become the guidepost for my business of the future? Dealers (and OEMs and financial institutions) will need to redefine what success looks like and how it can be profitable. It will have to include the idea and strategy and measurement of providing access to vehicles, and not just the transaction of vehicles. This may or may not include versions of providing fleet and rental, subscription or license options, car sharing and car riding, new flexible lease and mileage options, other vehicle and service options like electric charging, vehicle and fleet disinfecting, pick up and drop off (not just to the dealership but as a more mobile customer journey service), and much more that will be supportive of overall customer vehicle usage and customer mobility. That is the target for future success. 2. Focus on customer experience The idea and practice of customer experience are certainly not new, but it did take on a magnified focus with the pandemic crisis shifting how many people interacted and expected any retail business to operate and accommodate. I even wrote about "experience" needs to be the North Star for an organization. It should be the ultimate goal, and the functional operations and capabilities need to be transformed and configured to deliver upon it. Customer experience and fulfilling customer expectations will be the very thing that defines the auto retail industry of the future as we work through this shifting landscape.   In auto retail, this is even more of an imperative. Consumers are now more than ever walking from one industry and one experience to the next, expecting a certain standard. We must follow the customer's lead. How can we serve them and empathize with their journey and daily life and intersect in a meaningful and valuable way? This absolutely means pick-up, drop-off, driveway delivery, "no touch" servicing, mobile service, omni-channel and preferred channel access, and support for their mobility needs. It will mean even more yet to be determined. The customers are telling us what they want and need. The key is, are we listening?   Be sure to listen. Apply your own experiences and expectations of other organizations and industries. Start by supporting customer empathy and customer experience, and you will find the revenue and opportunities from it. Customers will pay for better experiences. 3. Don't simply digitize current processes This is a pitfall too many businesses and too many dealers fall into. If I just add technology, it will help, and things will get better. The technology is then either not adopted, does not work well with the current business operation, and overcomplicates and becomes cumbersome for the users. Digital change ultimately comes through People + Process + Technology. But process is first! Understand what the goals are, the North Star of customer and employee experience, and then make sure all processes are focused on delivering value to that end. If the process is not aimed at value for the customer or employee experience, it is simply adding unproductive and unsatisfactory work and noise. A lot of current dealership processes need to change. It is great we have added more online selling and scheduling tools. But the workflows and processes need to support an efficient value-add process. There is no reason after conducting a majority of a sales process online that a customer should have to be at a dealership for, on average 3.5 hours to finish paperwork and take delivery. There is just not! It is the number one dissatisfaction with the car buying process and is just one of many that need to change. I can buy and sign for a house in less time. Before any technology is ever implemented or added, make sure to consider and re-design the processes it will support. It is your opportunity for transformation. It is the best chance to advance and leapfrog ahead of a current state. 4. Become flexible, agile, transformative Inherent in all of the above components and capabilities is the core principle to be agile and flexible. What does that mean? It means don't do business as usual. It means you may have to get uncomfortable. It means you may have to pivot and shift from a plan or previous strategy based on results and feedback and customer interest. Your transformation strategy and plan should be a living guidepost. One that can be altered and changed to adapt to conditions and opportunities. To be agile, flexible and transformative is an actual capability; and probably the most valuable one. It will allow you to not get stuck chasing decaying margins or performing tasks that are not valuable. A lot of insight and direction will come from your data, the old and new measures suggested your customers and a general sense of the business opportunities. Listen for it! Be agile, flexible, and humble enough to follow it. This is not an overnight challenge or change. What I am suggesting is that life as we know it has changed. How we interact with retail has changed. How we use our vehicles or need mobility has changed. All has changed at least for quite a while, and some like the raised customer expectations have changed forever. So, let's understand those factors before we simply try to optimize some already archaic retail processes. We must measure factors that are the real evaluation of what is happening with mobility, vehicle usage and access as well as customer mobility expectations. Those measurements are where we need to drive our future business to operate and perform. Those will indicate new capabilities an auto retailer must develop to keep evolving and transforming to a future state of what's next and what's successful. Start with a North Star guide of what you want to deliver as an experience to customers and to employees. From there, create a plan and roadmap to build towards the capabilities necessary to deliver upon it; the people, process and technology. But always be agile, adaptive and flexible. Listen, pivot as needed, and pursue the customer experience. That will lead auto retailing through this crisis and into a new era of high value, high engagement and high satisfaction retailing experiences.