It’s a New Year and everyone is buzzing about nascent trends that will go mainstream over the next 12 months. Nowhere is this more apparent than in the ever-evolving retail space. The important thing to remember is that the retail evolution is completely driven by consumer demand; Expectations from experiences in one category, translating to the next. So, it behooves us to look at macro trends and see how they apply to the industries we each live and breathe every day.
1. ecommerce moves in-store
Digital retailing has been a buzzword in Automotive over the past several years. However, like most buzzwords, the definition has been hazy at best. For some it has meant vehicle merchandising, while for others it has meant online credit apps, calculators and F&I. Last year, this definition began to converge around ecommerce solutions that allow customers to desk their own deal. However, for most, the word “digital” still equates to online activity outside of the dealership itself.
Retail experts predict a transformation of the in-store experience in 2017. Retailers will need to focus more than ever on how their employees can leverage retail technology to enhance the customer experience.
Shoppers want tailored solutions that lead to experiences—not just transactions.
For automotive, this means putting tools at the fingertips of the sales agent and ultimately providing a seamless experience from online to offline and vice versa. Gone will be the days when a customer walks in and roams aimlessly around the lot. Dealership personnel will be empowered with tools to assist the customer in narrowing their options, even integrating all of the research and preparation the customer completed prior to arrival.
At Roadster, we now offer our dealer partners an in-store app to facilitate the transaction in concert with a white-labeled ecommerce solution. We have just added a Vehicle Recommender tool to the App that empowers showroom agents to help the consumer explore and assess vehicle alternatives that satisfy their needs on the path to finalizing the perfect deal structure.
2. Shoppers demand co-creation
Since the dawn of time, the vehicle transaction has been a black box for consumers. They want a fair price but have a hard time understanding if they got one, let alone deciphering the details of the deal.
Retail experts predict a move to co-creation of the retail experience:
Thanks to the digital revolution, shoppers are empowered to take things into their own hands, often times translating their frustrations into solutions.
This is by far, the biggest opportunity in automotive, where frustrations can be fairly high. By allowing a customer to co-create their own deal, automotive retailers can put the consumer at ease, make them feel in control of their own destiny, and by doing so, give them the space to digest the details of what is in front of them for a much more satisfying experience.
How much more satisfying? Dealers in the Roadster network who have embraced co-creation are seeing Net Promoter Scores in the 80-90 range. This is unprecedented for an industry that regularly generates scores in the 40s..
3. Convenience becomes table stakes
Let’s face it. If you were to rank the traditional car buying experience from 1-10 on convenience, most consumers would give it a -1 rating. Between the dreaded phone calls and 5-6 hours at the dealership, who can blame them? And to make things even worse, these frustrations grow as other retail experiences get easier. Startups have emerged to address this frustration– trying to disintermediate the dealership model with the promise of convenience, but I believe dealerships are ready to embrace it themselves.
Why now? Because convenience for consumers means less time for dealership personnel too. In an industry with shrinking margins, this means embracing technology that makes your entire staff more efficient and therefore able to touch more customers. The challenge is that convenience means different things to different people and people expect what they want, when they want it.
Talk to five shoppers and you will likely get five different answers to what convenience means—and retailers are expected to keep up with all of them
Automotive retailers who adopt flexible systems to accommodate the needs of each customer will win. We have dealer partners already reporting an average of 3-6 hours of time saved per transaction… and this is just the beginning.
4.Technology fosters human connection
In a world where everyone walks around buried in their phone, it is refreshing to think that technology can play a role in humanizing the retail experience both online and in-store. With trends like chatbots and easy messaging systems ala airbnb, retailers have more opportunities than ever to connect one-to-one with their customers; and not just company to customer, but person to person– putting a face to retail employees.
What this means for automotive is that we will see a blending of automation and relationship. An experience where technology is used to provide the details and sales agents will participate as consultants. With 30% of dealers already using ipads in-store, it is easy to see how this trend quickly becomes a reality. Technology becomes a conversation enabler to customize the experience and close the deal.
5. Generalists emerge
Okay, perhaps this is my own prediction. But with all of the above at play, it is easy to see how technology enables retail personnel to handle a customer’s needs from soup to nuts. When all of the information is at your fingertips and even customers can desk their own deal online, breaking down silos and removing layers of approvals makes room for a much more efficient sales process. It also means that you now have even more people to touch your customers. Remember that NPS score I was talking about? Those who think outside the box will be rewarded.
In short, 2017 is shaping up to be a transformative year for automotive retailing. Not just because the macro retail predictions are gospel, but because the dealership community is ready for it. Do you agree?