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Get Ready for Changes in Auto Retailing

Get Ready for Changes in Auto Retailing

Product innovation alone is not enough for auto brands to establish a lasting competitive advantage.

You’ve innovated the car, now how about the buying experience?

From the early 20th century, automakers have focused on one overarching imperative: lead the industry by differentiating on the latest technology. But this game is getting harder to win. 

With automotive technology advancing, today’s breakthrough innovation is tomorrow’s standard equipment. As a result, product innovation alone is not enough to establish a lasting competitive advantage.

So how can OEMs and dealers gain an advantage? The answer lies in experience innovation that places the customer at the center of every dealership and ownership activity in unique and differentiated ways. 

It requires re-imagining the customer experience, and applying the same innovative spirit to the experience as is done to products.

The following are key takeaways for innovating the overall automotive experience.

Leverage the store as the essential starting point. The showroom remains the core of the car-shopping experience and the best opportunity to inspire and engage consumers.

The challenge is recasting the dealership from something standard to a rich and stimulating environment that engages all the senses and enhances an emotional connection with the brand.

Automakers should fully leverage the dealership as a valuable tool for increasing consumer engagement and sales.

Today’s car buyers are better informed and more demanding. Nearly 80% of new-vehicle buyers use the Internet in their shopping. A third of them visit review and comparison websites.

They are comfortable shopping across different channels, moving from their smartphones to their laptops to brick-and-mortar outlets and back again. A J.D. Power study of car shoppers in California found that three-quarters of them accessed vehicle-information websites through smartphones or tablets while at the dealership.

Consumers today expect the retail experience to be seamless across channels. This means providing the customer access to products and information wherever, whenever, and however the customer chooses to shop.

Automakers should look for ways to give the customer more control over the shopping experience by embracing technology, both online and at the dealership. Create a seamless experience across channels and platforms.

Create meaningful consistency. Dealers and OEMs recognize the value of brand identity and have typically invested in dealership signage and design standards for consistent messages. But recently, some global retailers have made surprising changes in the area of design that challenge yesterday’s practices. 

Companies like McDonalds and Starbucks have instituted flexible design strategies that allow stores to have unique characteristics based on location or culture.

The license to be flexible on design comes from the strength and consistency of the experience they offer at all stores.

For example, having the barista write your name on a coffee cup has become a signature moment that Starbucks customers recognize and expect. The design of the stores may vary by location, but the customer experience remains consistent.

Pursuing stringent consistency in dealership design could work against automakers, especially as they expand into new markets where cultural differences and taste preferences are significant and different.

While consistency matters, the focus should be more on a brand-aligned customer experience that goes beyond physical elements and includes actions and behaviors.

Automotive brands typically know what makes them unique, but they need to continuously look for fresh and creative ways to bring brand personality to the forefront, insuring relevancy in the minds of today’s consumer.  

How can auto brands leverage their heritages while also conveying future-focused images that appeal to millennials? Brand authenticity will remain as important as ever. But industry leaders will look to tell their story in new and compelling ways.

For automakers, this means identifying what makes them unique and showing it in fresh and creative ways, whether through a high-profile collaboration, social-media campaign or storefront display.

Your people embody the brand. Human interactions in the showroom can, for better or worse, cement the brand in the customer’s mind. This is especially true of younger shoppers, who are more likely to reject a dealership because of an unsatisfactory encounter with a salesperson.

The dealership experience tends to reflect the individual dealer’s management and internal culture. This is a different paradigm than other types of retail, where the store experience reflects the culture of the brand. At Apple stores, for example, staffers embody the brand as much as the products do. Employees don’t just provide great customer service. They are as distinctive and recognizable as a dimension of the experience.

So, while dealers recognize the importance of people in delivering the experience, they don’t necessarily see their role in delivering the brand or the opportunity to differentiate. To accomplish this requires OEMs working with dealers on adopting a common culture across the retail network.

Connect and stay relevant throughout the ownership experience. For many manufacturers and dealerships, marketing strategies are focused on bringing consumers into the showroom and selling them vehicles.

But what is done to retain their post-sale interest? Many automakers miss opportunities to stay connected and engage owners throughout the ownership experience.

Think of the sale as the starting point of the relationship. Create an experience that deepens this relationship over time by offering owners opportunities to connect and engage with the brand.

Consider Breitling, the Swiss watchmaker. Its boutique model anchors the brand experience and provides services beyond the average retailer. Visitors can browse watches, experience the brand’s heritage through a museum quality collection of vintage watches and socialize or relax while enjoying Champagne or espresso in a private lounge. All this adds up to a truly immersive brand experience that extends beyond the product.

The common thread among leading retailers is that they have found ways to modernize the experience for today’s demanding consumers by creating environments that engage all the senses.

Ryan Kovalak is a design partner at Lippincott, a brand strategy and design firm. He is at [email protected]. Contributing to this column is

Randall Stone, a Lippincott senior partner and director-experience innovation.

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