According to a recent study by Salesforce, the automotive industry is at the heart of a historic digital transformation. For the “Trends in Automotive” report, the American giant surveyed 500 employees of equipment manufacturers, investment funds and dealerships around the world to learn more about the digital imperatives that are transforming the customer experience.
The Salesforce study highlights three key trends. First, customers are hungry for simplified digital shopping experiences, but businesses are struggling to satisfy them. Fewer than one in five OEMs and retailers also find their digital storefront attractive, while the same number report issues with the accuracy of online inventory. Finally, while companies prioritize the collection of customer data, they struggle to make good use of it. 93% of companies agree that first-hand data would significantly improve the customer experience.
And if manufacturers are investing large sums in the research and development of electric vehicles, they compensate for it by tightening margins with new revenue from subscriptions and partnerships. 85% of companies agree that research and development costs related to the transition to electric vehicles will pose a significant risk to industry profits over the next five years.
A customer experience in question
The automotive shopping experience is more digital today than ever. OEMs, captive finance companies, and retailers are leveraging digital experiences offered in other industries like retail. The Salesforce study also highlights that the post-purchase experience is increasingly digital and virtual, whether it’s managing loans, buying extra miles on leases, or downloading service updates.
Salesforce teams further suggest that companies are not as advanced in their digital journey as they might think. According to them, 73% of companies believe they are outperforming when it comes to digital transformation. Note that another recent study by consulting firm McKinsey shows that physical touchpoints (and unsatisfactory interactions) still dominate the shopping experience.
Customers are pushing for price transparency and rationalization of loans, without the builders managing to give them satisfaction. Only 27% of captive finance companies rated their online auto finance tools as well above average. Worse still, only 24% of companies surveyed say that the prices displayed on their website consistently match what customers actually pay. This is a major challenge for the industry, given that 74% of consumers say honest and transparent communication is more important today than before the pandemic.
Purchase path to review
Salesforce also points out that the complexity of the purchasing process is testing the capabilities of e-commerce. Less than one in five OEMs and retailers believe their digital storefronts are attractive and mobile-friendly. The same number also flags online inventory accuracy issues.
That’s not all. For dealers, customers who want to use online channels to customize options for a new vehicle also face challenges. For example, 79% say it’s not easy to customize finish and color options online. The time it takes to complete a transaction also leaves something to be desired, with only 21% of OEMs and retailers believing they offer a quick shopping experience.
The post-purchase experience must also be improved. Dealing with customers after the sale should be easier, but right now, post-purchase digital experiences are a problem for businesses: 79% of OEMs and retailers say customers have difficulty accessing their accounts personal information or to their service file through digital channels.
How to make the best use of customer data?
95% of companies in the automotive sector buy customer data from third-party sources to support their marketing initiatives, but the changing legal framework leads them to increasingly collect their information directly from the customers themselves. In the future, these will have to explicitly agree to share first-hand data such as an email address and a mobile phone number, or second-hand, such as product preferences and purchase intentions.
Again, this is a major challenge for the ecosystem. 93% of companies agree that first-hand data will dramatically improve the customer experience. However, only 46% of companies claim to have complete data. Consequence: Only 26% of captive finance companies and 22% of OEMs and retailers can personalize communications on channels like email and SMS, which 73% of customers already expect. However, it could be a great help in stimulating activity: according to 87% of the leaders surveyed, this type of message helps to increase sales and margins.
However, the reluctance of the general public exists. 78% of OEMs and dealers say they cannot personalize communications to specific accounts or even customer complaints.
Diversification required
Today, entry-level electric vehicles are often loss leaders for OEMs, with models priced out of reach for many consumers. At the same time, environmental regulations are prompting OEMs to invest heavily in electric vehicles. But as North American and European companies push consumers towards environmentally sustainable transportation, their bottom lines could pay the price: 85% of them agree that the research and development costs associated with the transition to electric vehicles will pose a significant risk to industry profits over the next five years.
Still, subscriptions and partnerships offer new revenue opportunities for OEMs. Manufacturers are increasingly turning to this type of business model to generate revenue: 68% of OEMs and 62% of retailers are already investing in Internet of Things (IoT) applications like Apple CarPlay and devices smart home.
“As the adoption of electric vehicles grows globally, companies are under pressure to address issues around vehicle affordability, charging station availability and compatibility, and the harmful environmental impact caused by the extraction of minerals from batteries,” argues the report compiled by Salesforce research teams.
Source: ZDNet.com