The balance of Digital v/s Physical: Is the Auto industry unique?


Darshan Shankavaram

September 24, 2015

Digital technologies are set to transform the way consumers engage with the automotive industry, as well as providing OEMs with significant revenue and cost containment opportunities. But with the majority of customers still demanding physical contact with dealers, automotive companies will need to carefully balance the digital with the physical if they want to stay ahead of the competition.
The latest annual Cars Online report from Capgemini shows that smartphone apps and social media are both a growing source of information for consumers and a means of communication with OEMs and dealers. Interest in using digital channels varies among age groups and markets: during the purchase phase, 41% of people in growth markets cite websites/social media as a communication channel preference but only 26% in mature markets; similarly, 44% in growth markets cite smartphone apps as a communication preference and 22% in mature markets.
Digital technologies can enable much more flexible, timely and targeted communications, opening up revenue opportunities. For example, 58% of customers across all markets would like the chance to adjust their vehicle order in the purchase phase, with many wanting to add accessories. Yet opportunities are still being missed: many respondents—as many as 37% in mature markets—say they have not been contacted by their dealer or manufacturer at all in the year after the vehicle was purchased.
At the same time, the importance of physical interaction should not be underestimated. While online purchases are some way from being a widespread reality, more than one third of participants in the study say they are willing to buy a car online. Yet the majority of people say they still want physical contact with dealers: 95% of all customers will visit a dealership during the interest and purchase phases, and 89% will visit more than one. This is understandable, since car is an expensive item to buy and there would be good amount of customization needed based on personal preferences.
The Capgemini report says OEMs and dealers need to learn from other sectors such as retail that are already engaged in social listening and intervention, or risk missing out on the chance to enhance customer experience and influence purchases. But they must also provide personalized human contacts and physical touchpoints.
In future, automotive companies will need to closely integrate physical and digital channels, ensuring they make the most of investments in back-end systems such as customer relationship management (CRM). As with other vertical markets already embracing the digital customer experience, central to success will be the ability to fully harness areas such as social media, mobility, analytics (Big Data) and cloud computing (SMAC). Do so, and you will be able to better respond to rapidly evolving and individualized customer behavior and preferences.
In turn, the role of the chief marketing officer (CMO) and/or digital officer (CDO) will evolve within automotive companies. They will need to work closely together to integrate legacy systems with new mobile and social technologies, to provide holistic customer views and insights. When a customer walks into a store, for example, are you able to use all previous communications and interactions with that individual to deliver the best possible customer experience? Clienteling is one of the key digital solutions that can bridge that gap.
As our report acknowledges, a fully digital experience is some way off. We show that very high levels of customer satisfaction are now needed to ensure loyalty to a manufacturer or dealer, and that can only be achieved by integrating the physical with the digital to provide a truly individual or “selfie” experience.

This article was written by Darshan Shankavaram from CapGemini: Capping IT Off and was legally licensed through the NewsCred publisher network.

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