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How automotive manufacturers & innovation are changing the face of car sales

  • 8 mins read
Rob Verheul
by Rob Verheul
Managing Director

Graphite's Managing Director and a BIMA 100 winner. Also on the BIMA Young Talent Council, which is focused on creating a pipeline of future innovators in all areas of digital.

Published on Friday 18th January 2019

Digital innovation is creating new opportunities for the automotive industry. Today, brands are using digital to improve and enhance customer experiences, as well as entirely reinventing how cars are sold to consumers.

In this piece, we take a look at the changing customer experience of car purchasing, and how brands are innovating in order to address changing customer expectations.

A changing industry

The digital transformation of the automotive industry will drive more innovation and disruption in the next 20 years than there has been in the last 100 years. Digitization and changing customer behaviour will see B2C automotive retail see a sharp rise in online information gathering and purchase guiding. A new ‘mobility movement’ is one key area of change. ‘Leading the new mobility movement’ was the strapline for ‘Automobility LA’ - a new name for the LA motor show, and a statement of intent in terms of its ambitions to be a showcase for the changing state of the motor industry today.

What is Mobility?

Mobility is a service, rather than a product. Encompassing services like Uber and Lyft, it is the enablement of customers to transport themselves and their passengers at a time and a place that suits them.

Automotive brands are using this term lately to describe their subscription services - in which a customer pays a monthly fee to enjoy a car, insurance and servicing without the financial responsibility of owning it via a lease. Greater flexibility and peace of mind, in a single monthly payment.

There are several examples of subscription services that have already launched in the UK; including Care by Volvo, Porsche Passport, and Wagonex - a company offering cars from several brands.

Seizing the moment, Volvo made a bold move in not bringing any cars at all to the Automobility LA show this year

"We want to demonstrate that we got the memo and start a conversation about the future of automobility. So instead of bringing a concept car, we talk about the concept of a car." - Mårten Levenstam, Volvo’s Product Strategy.” Volvo wants us all to know that it’s taking this idea of mobility seriously.

Volvo Cars At Automobility
Volvo for Automobility LA show

Multi-channel customer experiences

Whatever the sales model, as customers seek out information online, automotive brands know they need to position themselves well, creating great content and services that are right for customers whichever channel they’re in. Customers will be constantly moving from web to mobile, social and in-store. Brands are going to have to deliver seamless customer experiences when they shape their digital experiences.

The direct relationship between a brand and a customer feels more complicated when it comes to a dealership. A dealership is effectively an intermediary and a representative of the brand. It seems that some manufacturers are taking different routes with their dealership networks in order to offer customer centricity:

Tesla - ignoring the dealership ‘status quo’

Since 2008, Tesla has built an enviable reputation as a disruptor and innovator in the automotive sector. Beyond electric propulsion, many of their key disruptions have been in their pursuit of a customer-centric customer experience.

For example - selling directly to customers (rather than through dealer networks) is considered nonconformist in much of the US, however, Tesla threw out the rulebook. They were the first brand to allow their customers to initiate their purchase online, configure their vehicle, and have it ready without ever needing to leave their computer.

Tesla Service Bay
Tesla Service Bay

Hyundai - giving dealers new capabilities

Hyundai, the Korean automaker is giving new capabilities to its retailers in the US. The services they have created include:

  • allowing buyers to schedule a test-drive when and where they want
  • transparent price and discount information online, before visiting
  • calculating the value of a trade-in online and the ability to complete most paperwork at home
  • three-day money-back guarantees

They’ve provided a customer experience that is less inspired by the auto industry, and more by that which they’d expect from other sectors.

Hyundai Shopper Assurance Press Conference
Hyundai Service Capabilities

ŠKODA - Virtual Showroom

In May 2018, Škoda announced that they had given more than 2000 live car tours in their live showroom experiment. A live tour allows a customer to talk and interact with a Product Host in the Live Tour showroom via a one-way video link. For 75% of live tour customers, it was the first time they had interacted with the ŠKODA brand. 30% of those that had a virtual tour went on to book a test drive and 10% made a purchase. The host can demonstrate key features of the vehicle. John French, Head of Sales Operations for ŠKODA UK, comments  “The Live Tour seamlessly brings the retail experience to a digital world.” Live Tour has since been expanded, more information at Skoda UK.

Skoda Live Tour Sales Success 01
Skoda Live Tour

BMW - Virtual & Augmented Reality Experiences

Virtual reality hasn’t replaced the actual test drive experience, but more retailers are delivering Virtual Reality and Augmented Reality experiences that allow potential buyers to get an immersive tour of new cars, often before cars have even arrived in the showroom. The BMW Augmented App allows you to experience the highlights of the BMW 7 series models on your tablet or smartphone. You can take in the 3D model and interactive product information. With the BMW Individual, 7 Series Augmented Reality app, you can design a dream vehicle to match your own preferences and view it up close.

Bmw Augmented App
BMW Augmented App

Volkswagen - customer-centric transformation

Volkswagen, the World’s largest automaker is not sitting still. Sharing for the first time in October 2018 their plans to revolutionise the dealership experience. VW is working with its 5,400 existing dealer networks to transform them and make them fit for the vision of the brand - which is to go far beyond vehicle sales to provide seamless, individual round-the-clock support for customers.

They will be basing everything around a single customer view, “Volkswagen customers with their personal ID number are to be at the center of a fully-networked world of mobility including seamless individual support going beyond vehicle purchasing, with round-the-clock availability”. The brand wants to build a relationship with customers and position the dealership as the home of their individual services, including:

  • Vehicles to be kept up-to-date by over-the-air software updates via the mobile phone network
  • Vehicles will notify the dealer that the next service is due via the predictive maintenance app
  • Customers will be able to access a broad portfolio of services from the Volkswagen We digital ecosystem
  • There will also be services going beyond customers’ own vehicles such as ‘We Share’ – the planned car sharing offering from Volkswagen.
Vwdealershipoftomorrow
VW Dealership of the future

Customer centricity inspires innovation

For any brand, customer centricity is key. When working on innovation projects with clients, we often find that the opportunities for greatest innovation arise when mapping the customer experience and looking for opportunities to solve the right problems. Often this can involve looking to other industries for inspiration when ideating.

As well as innovation in the pre-sales process, we’re also seeing many car brands reinventing the way the sales and after-sales experience works. Research from CEBR shows that 60% of consumers in China and India would consider buying a car online and Tesla has reinvented the after sales experience. They boast that “90% of issues can be identified from a customer’s garage.” When a service is needed, Tesla sends mobile technicians directly to customers. They have built a service network to do this.

In order to make this happen, the service department needs to not only forego the fee for those inspections but mobilise their mechanics to fix problems on-site. This innovation was aimed purely at creating an easier experience for customers.

Designing the Automotive Customer Experience

Innovation can be approached through a process of design thinking, design sprints, and rapid prototyping. Graphite works with brands using workflows like the design sprint to help clients innovate and deliver customer-centric digital experiences. PSA is a French multinational manufacturer of automobiles and motorcycles that sell under the brands Peugeot, Citroen, DS, Opel and Vauxhall, Graphite helped PSA to reimagine and streamline their finance website. Together we worked to create a seamless experience to ensure both new and existing users could get to the content that mattered to them - whether that be logging into their online account or finding out more information about PSA’s products and services.

To start reimagining the customer journey, begin by considering how you can remove friction from the customer experience. A Graphite design sprint can help you ideate and prototype, compressing what could be months of work into just 5 days. The prototype is then tested with customers so that important feedback and insight can be gained quickly in order for teams to make improvements to customer experiences or product features.

If you’d like to speak to our team about the powerful prototypes we can create, please contact us.