The world is changing, over the past ten years consumers buying behaviours and habits have changed dramatically. Consumers have evolved, they’ve been adopting automated processes that disrupt traditional lending ecosystems, which in turn creates new norms for the industry to follow suit.
In this blog we cover:
The automotive industry is undergoing a digital transformation, with data speed and accuracy driving the trend. With technology paving the way for the future of consumer finance, the push for digitisation can be felt across the financial services industry and is met with a need for automotive dealers, brokers, and lenders to implement a digital strategy to remain competitive.
What was once considered innovative has now become commonplace, and as the demand for smartphones amongst consumers grows so does their expectation that they will be able use these devices during every step of purchasing or financing a car. Some consumers are even going so far as demanding virtual showrooms which allow them to complete their full car buying journey without the need to leave home! Last year, dealerships reported an 25% increase in mobile device usage by shoppers looking for new cars.
Virtual reality car showrooms (VR Car Showrooms) enable customers to digitally experience a fully immersive car buying journey, from the comfort of their own homes.
The pandemic has fast-tracked adoption of virtual reality across the world, and what was once only used for entertainment is now being adopted by corporations across many industries worldwide.
Customers want to be able see many different cars in detail before they buy. If you’re a dealership, this is an opportunity for your company because it means more sales and happier customers! Virtual tours allow people who can’t visit the lot or showroom easily get access 24 hours per day 7 days per week via their phone’s browser app or VR headset while sitting at home on virtually any device imaginable – all without having go outside (or even leave the sofa).
Imagine yourself laying on your sofa and entering a car showroom, you’re greeted by Dave the dealership manager who helps to guide you around the available cars and even offers you a 360 tour of your favourite vehicle. You’ll get the opportunity to inspect the car in three dimensions, including the vehicles interior. You can even change the paint colour and internal specification to suit your individual needs, providing a more customer-centric experience vs what you’d receive in store.
Given the improved customer experience and levels of buyer satisfaction, it’s likely that virtual car showrooms will surpass online marketplaces and trade websites in the race for the best place to buy and sell cars online.
Direct impact on sales
Provides a more customer-centric experience
It can help your business stand out
At Marsh, we believe that virtual showrooms are necessary for the modern consumer, as most buyers wishing to purchase a new car utilise digital technology for research.
Whilst many organisations will not be able to adopt this level of technology straight away, there are other things that you can do to ensure that you’re staying ahead of the curve.
Digital Marketing
Dealers and Brokers must adopt a multi-channel digital marketing approach, which leverages mobile, paid search, SEO, and social media platforms such as Facebook, TikTok and Twitter if they’re wanting to attract online-first car shoppers.
It is important that dealers and brokers increase visibility on search engines when potential customers are searching online about cars at nearby locations. Geolocation advertising technologies allow businesses to not only track when users go within a certain distance of the car showroom, or any chosen location but also to send them automated alerts related directly towards their car buying preferences. This creates curiosity and re-engages customers who may not otherwise think of coming back to the showroom, unless specifically alerted via text message/email during specific times throughout each day.
Dealers should be paying attention to social media, as it is an important way for customers and potential buyers alike find information about cars. In fact, nearly one quarter (24%) of prospective car-buyers use Facebook before making any purchase decisions!
Millennials are becoming one of the most sought-after demographics in advertising because of their growing need to connect with others on social media. This generation has grown up surrounded by technology, so it’s no surprise they’re utilising its capabilities more than any other before them.
Customer experience and UX
Dealers and Brokers must realise the importance of implementing enhanced digital capabilities to deliver benefits for both their business and for the consumer.
In the not-so-distant future, car finance lenders will be able to offer a fully digital customer lifecycle which includes everything from digital marketing, to purchasing and servicing.
The digitalization of dealerships, brokers and lenders has many benefits for both customers and businesses alike. Not only can it help consumers find their perfect car at the touch of a button, but it can also increase operational efficiencies within your organisation, which means better quality control in addition to fostering customer loyalty with every new purchase!
Ok… so we now know the benefits of digitisation, but what are the things stopping dealerships, brokers, and car finance lenders from making these changes?
Whilst we all agree that digitisation results in better efficiencies, more streamlined processes and a better customer experience, the process to obtain these levels of success is one with many bumps in the road.
Traditionally, car financing has relied heavily on face-to-face interactions which has created a pattern of ease and routine for most organisations, and some reluctancy to embed the change. But as the needs of the consumers are shifting more and more towards a fully digital experience, it’s important that organisations are reacting to the new-world – if they don’t, they may get left behind.
Did you know that recent research found that almost 64% of car dealerships do not offer customers the ability to purchase a car digitally? The feedback from these car dealerships, brokers and lenders stated that the biggest challenge ahead of implementing a fully digitised service is the in-ability to negotiate the financial terms or purchase price in person.
Whilst there are concerns and reluctance to change, many dealers, brokers and lenders in the automotive industry see that the benefits of a digital business model outweigh the costs and would like to incorporate technology into the backbone of their goals to embrace the digital future and will look to lenders and brokers to assist them.
Let’s solve these challenges:
The innovative early adopters who invested in digitisation are already reaping the rewards through an increased return on investment, which has enabled them to deploy technology more broadly.
Many customers are now opting for used cars which has caused an increase in both demand and pricing – large used car dealerships and brokers are now having to rely on digitised platforms to effectively manage the volume of transactions. Post-pandemic the demand for fully digitised sales processes and virtual engagement continues to increase in the motor finance industry, especially with D2C sales and refinancing activity.
The question is no longer ‘Should the automotive industry adopt digitisation’, instead it’s a race to implement these changes to prevent getting left behind.
Fancy a chat about how Marsh Finance can support you with process digitalisation as a dealership or brokerage? We offer FREE support to all Marsh Partners, get in touch today!