Pandemic speeds move to digital retailing, but with human touch, experts tell ANE panel

Europe

The pandemic has massively accelerated digital buying processes to allow more elements of the sale of new cars to happen online, but the human relationship side will remain important, panelists discussing the future of virtual buying said.

“What we discovered was that some of the trends we anticipated happening over five years were happening in three months,” said Kia Europe Marketing Director Carlos Lahoz.

Kia accelerated the rollout of online tools such as live showrooms, live online chats with sales staff and electronic signatures, as well as contactless test-drives at its sites as the pandemic forced a change in the way automakers sold cars.

The changes are not temporary, Lahoz said. “They have been pretty well accepted and we are adapting to the new normal,” he said.

The physical dealership is still a key part of the sale for the customer, but the approach is now different, said Robert Forrester, CEO of Vertu, the UK’s fifth-largest dealer group. “Internet inquiries are now higher than walk-ins for the first time for our company. That’s a COVID thing. I’ve never seen that before,” he said.

The key to a successful digital approach to sales is making sure the customer has options, said Jonathan Goodman, UK managing director at electric car brand Polestar. “The customer wants to choose how they interact with the brand. Some will choose all-online, but a big proportion wants to physically interact with the product.”

Customers might gather information and even approach the dealer online, but a physical connection is still key. “People want interaction, especially the younger generation. They will visit showroom four to five times, just like 10 years ago,” said

Peter Nikell, managing director of consultancy Urban Science. “First time buyers want personal guidance.”

  • For the full discussion on The Future of Auto Retailing in Europe Post COVID-19, which took place Oct. 22, click here.

Getting the technology right when it comes to connecting with customers is crucial. “It’s only as good as the people. Sales staff need to be fully trained in using the technology and they need to reply immediately,” Kia’s Lahoz said.

The amount of the sales process that happens digitally depends on what car the customer is buying. “The digital pace of change is related to a number of fundamental questions,” Vertu’s Forrester said.

“If the car is commodity, i.e. a box with wheels with no emotional attachment, then you are more likely to buy digitally from your home and get it delivered,” he said. The increase of private leasing or subscription schemes in the future would facilitate that.

However, that would be a detriment to the brands. “For the sake of the manufacturers [the purchase of a car] needs to be an emotional thing or it gets quite difficult,” Forrester said.

Buyers could end up reversing some of the digital journey once the COVID-19 threat had passed, Forrester added.

“People are lonely and depressed and generally fed up with the lack of human interaction,” he said. “It will be interesting to see how that rebounds after this is over.”

The move to digital purchasing is the right time to create more transparency over pricing, Polestar’s Goodman said.

Polestar’s policy is to be upfront about the list price. “Customers know what they are paying for the car,” he said. “A lot of people are intimidated when they go to a showroom: ‘Will he give me a good deal?.’ We take that concern out. Whether online or not, they know what the price is.”

More automakers are moving to clamp down on big discounts,  Vertu’s Forrester said. “We are edging toward a far more transparent process as we digitize more,” he said. “The manufacturers are moving headlong down that route on new cars.”

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