Within the quickly evolving panorama of automotive retail, a shift is underway from conventional, product-centric, and dealership-focused gross sales fashions to customer-centric, digitally delivered approaches. Understanding client behaviours and expectations is essential in navigating this transition.
The EY Mobility Shopper Index (MCI) survey reveals that whereas enhancing the digital expertise is vital, the bodily dealership stays a strong attraction for shoppers who place a excessive worth on the human component when buying a automobile. Furthermore, the dealership is an important hub for long-term worth creation, a key driver for sustainable development sought by each OEMs and sellers.
The EY MCI report, now in its fourth yr, supplies in-depth evaluation of mobility traits and car-buying intentions primarily based on responses from 14,500 shoppers in 20 nations. The findings point out that for each electrical automobile (EV) and inner combustion engine (ICE) automobile consumers, the dealership continues to play a major function. Customers prioritise the dealership expertise when buying a brand new automobile, in search of not solely to expertise the automobile bodily, but additionally to achieve assurance that they’ve made the best selection. The relationships shoppers construct with dealership workers drive loyalty and, in flip, worth creation. Even digitally savvy EV consumers favor having dealership workers reply their questions on comparatively new and quickly evolving EVs in contrast with the familiarity they’ve with ICE automobiles.
On the identical time, the usage of digital channels is on the rise for varied elements of the shopping for journey, significantly for preliminary phases like pre-sales analysis and knowledge gathering. This advanced panorama challenges the prevailing narrative of an all-encompassing digital transition. Beneath the floor, varied teams of automotive prospects favor completely different mixtures of digital and bodily channels. The problem for each OEMs and sellers is to develop into genuinely customer-centric by providing the omnichannel experiences shoppers want whereas maximising long-term worth by tapping into the brand new and current worth swimming pools.
Digital-first however sellers keep robust
For all automobile consumers, whether or not involved in ICE or EV automobiles, the shopping for journey more and more begins on-line. Preliminary analysis and knowledge gathering on-line, together with the usage of social media, third-party apps, and dealership and/or OEM web sites, is most well-liked by 83% of ICE consumers and 90% of EV consumers. Digital channels are additionally favoured for pre-sales actions akin to utilizing on-line automobile configurators, digital actuality automobile viewers and reserving check drives.
Adopting a digital-first strategy doesn’t imply abandoning the dealership completely. Because the shopping for journey progresses, client preferences shift to incorporate visiting dealerships to work together with salespeople, expertise the automobiles in individual and procure in-person quotes.
Numerous teams of automotive prospects favor completely different mixtures of digital and bodily channels
By way of precise purchases, consumers’ desire for dealerships over on-line channels has steadily elevated from 54% in 2021 to 61% in 2023. Surprisingly, EV consumers, typically thought of extra digitally savvy, present the strongest desire for dealerships, with 64% selecting to make a purchase order at a dealership slightly than on-line, in contrast with 58% of ICE consumers. Vehicles will not be like cellphones, and even digital natives search in-person reassurance when making a major monetary dedication.
Customers depend on dealerships for 3 key elements of the car-buying expertise. Particularly for EVs, that are nonetheless comparatively new, shoppers search educated supplier workers to supply a deeper degree of interplay and assurance in making the best automobile selection. Whereas digital excursions are helpful, shoppers favor to bodily expertise a automobile earlier than committing to a purchase order. The proportion of all automobile consumers visiting sellers to expertise a automobile has elevated by 3% from 2022 to 66%. Then there’s pricing. Regardless of the rising reputation of fixed-price retail with OEMs, over 60% of each EV and ICE consumers favor visiting a number of sellers to safe the perfect quote for a selected automobile. The proportion of all automobile consumers visiting sellers to get quotes has elevated by 6% in contrast with 2022.
Reassure the fans, persuade the skeptics
The MCI Survey segments respondents primarily based on their degree of EV-mindedness, from EV fans to EV skeptics. Sellers play an important function in addressing the wants of those teams. EV fans symbolize 13% of all consumers. These shoppers are dedicated to sustainability, prioritise efficiency over value, and are inclined towards utilizing digital channels for preliminary analysis. Regardless of their digital affinity, they nonetheless favor to go to sellers for quotes and to expertise the automobile, with 64% selecting a supplier for his or her closing buy.
EV skeptics symbolize 11% of all consumers. Skeptics are conservative, cost-conscious and eco-doubters. They closely depend on dealerships in any respect phases of the shopping for course of, exhibiting a desire for in-person interactions tailor-made to their issues.
Shifting gross sales fashions
To adapt to evolving buyer behaviours and speed up the transition to EVs, OEMs are revamping their gross sales fashions from product-centric to customer-centric approaches. Two different gross sales and distribution fashions are difficult the standard dealership mannequin.
The direct-to-consumer mannequin, favoured by new entrant OEMs, affords extra management over pricing and the client journey. Nonetheless, constructing attain and scale requires substantial OEM funding.
Usually, incumbent OEMs in search of to transition their legacy supplier networks favor the company mannequin. It supplies publicity to prospects, management over pricing and leverages current dealership distribution networks.
Many OEMs are experimenting with these fashions, akin to making new shops agency-only in some areas or differentiating gross sales fashions between powertrains (EVs through company route and ICEs by way of conventional dealerships).
Too far, too quick?
The shift to customer-centric fashions is constructed on sure assumptions about client behaviour, together with the desire for fastened costs, the alternative of bodily channels with digital ones, and the predominance of on-line channels for automobile purchases. Nonetheless, real-world client behaviour and preferences problem these assumptions.
Customers, even digitally savvy ones, favor visiting a number of sellers for quotes and decide to make their purchases in-person, not on-line. Digital experiences are seen as complementary to bodily ones. Within the eagerness to embrace digital channels and reduce dealership-related prices, OEMs threat damaging their established relationships with sellers and, paradoxically, changing into much less customer-focused. There’s a threat of shifting too far forward of shoppers, detracting from the shopping for expertise slightly than enhancing it.
Bodily plus digital is the important thing that can unlock worth
True customer-centricity means giving prospects what they need, and the MCI information suggests that customers want each bodily and digital components of their shopping for expertise. Private interactions at dealerships are nonetheless extremely valued, forming the core of the acquisition journey even for tech-forward shoppers.
Moreover, EVs stay comparatively new and fast-changing in shoppers’ minds, with numerous teams of automobile consumers at completely different phases of their EV journey. OEMs should meet prospects on their very own phrases, utilizing the combo of bodily and digital channels they like, slightly than anticipating prospects to adapt to predefined expectations.
The fitting mix of bodily and digital not solely enhances the client expertise but additionally catalyses worth creation by opening doorways to rising worth swimming pools past conventional income streams. Alternatives embody areas like insurance coverage, finance, telemetry-based upkeep, different possession fashions, micromobility, and mobility-as-a-service. Unlocking these alternatives requires OEMs and sellers to work collaboratively and give attention to data-driven decision-making, revolutionary value administration, and operational transformation.
The mix of EV vs ICE must be much more centric to buyer needs with EVs changing into a most well-liked selection vs mandated. Continued enhancements in mannequin selection, vary, charging infrastructure, charging time and value are nonetheless wanted to gas that selection.
Concerning the creator: Randy Miller is EY International Superior Manufacturing & Mobility Chief
