The Edit Blog

The Road Ahead: Marketing to the changing auto sector

ARTICLE BY Polly Waines
    READ TIME: 3 mins
    16th July 2019

    The automotive industry is worth £82 billion industry in the UK, and it could be all but moments away from being changed forever.

    For now, things remain largely unchanged.  The car purchasing journey is still dominated by a 1980s brochure, dealer, handshake type model but the ‘tipping point’ into buying cars online would revolutionise how an auto customer’s journey would be, and how marketers tap into that.

    Similarly, new cars do come with ‘infotainment systems’ installed, but the true potential of this technology is yet to be unlocked. Mass adoption and acceleration of in-car Infotainment or sharing ownership of a car are all changing how customers treat and interact with cars.

    Online Car Sales

    Although car buying in the UK is still very much dominated by the retailer, consumer habits are shifting. Over 60% of new car sales begin online and customers typically switch between online and offline channels 4 times before making their purchase.

    The need for personalised, multichannel comms is becoming as fundamental in the car industry as it is in retail. And if car manufacturers get it right, the real shift in consumer behaviour will start to happen once customers cut out the retailer middle-man entirely and start buying their cars online. Currently, only about 2% of customers in Bain’s recent global research sample have bought a new car online but the intent is there – 50% of those surveyed said that they would be willing to in the future.

    If car sales do progress to an online environment, there are big implications for automotive brands. Tesla are already taking advantage. When it launched in 2016 Tesla’s “affordable” Model 3 was priced in the region of $50,000. Closing retailer outlets and pushing an online purchasing journey to customers saw the Model 3’s price drop to $35,000, making the car more accessible and opening up the Tesla range to a new audience.

    Relying less on retailers will provide car manufacturers with surplus funds which could then be well invested in optimising the online journeys and tipping more customers into the funnel. Bespoke touchpoints like intuitive finance calculators, VR test drives, car configurators and interactive tours will help guide customers towards their first online car purchase.

    Infotainment

    In-car software is becoming increasingly sophisticated and is offering car manufactures more ways to communicate with their customers. Volvo and Google have recently upped the ante, with the announcement that Volvo’s next-generation system combines with Google’s Andriod operating system to offer voice-controlled Google Assistant, Google Play Store, Google Maps and other Google services. This human interface will enable drivers to interact with their cars much as they do their smartphones or tablets, leading to greater data capture and the ability for Volvo.

    This heightened understanding of how a customer uses the car will provide a better sense of when a customer is likely to require assistance with servicing, vehicle maintenance and purchasing accessories. All of which can inform hyper-personalised Marketing communications at certain points in a customer’s journey.

    Car Sharing

    Shared mobility services such as Uber, Ola and Lyft have demonstrated how life-enabling technology can shift consumer mindsets rapidly. For many city dwellers, public transport and occasional, dynamically priced taxis provide all the convenience of car ownership without the associated long term costs.

    Car owners are starting to be swayed too. Between 39% and 64% of European drivers have said that car-sharing has already led them to avoid or postpone a vehicle purchase. Meanwhile, in the UK, over 80% of cars are purchased via a finance programme.

    This is something that is doing much already to change attitudes towards ownership. If we are not buying our cars outright, perhaps it makes sense to pay for cars as and when we need them. Forecasters believe that subscription models for cars are where things are headed.

    The global car sharing market is expected to be $11 billion by 2024. It’s early days, but a good current example of how this can look for consumers is offered by the Porsche Passport with the promise “Drive a Cayenne on a Monday and a 911 on Friday.”

    Environmental concerns

    All of the above is happening against a backdrop of amplified conversations concerning the environment. The UK driver’s recent tumultuous relationship with diesel can only have been increased by a heightened awareness of a car’s impact on the environment.

    Long term fears regarding pollution in cities and its negative impact on health are now bolstered and validated with hard evidence regularly. Air levels in Birmingham, for example, are now said to have shortened a child’s life expectancy by half a year.  And 1 in 10 child asthma diagnoses are said to be due to pollution.

    This is influencing attitudes towards cars and the types of cars people are driving. Those that aren’t car sharing are entering the P-HEV market, where sales have increased 78% year on year between 2017 and 2018.

    Conclusion

    Whilst we’re a way off a fully driverless world, the car industry is modernising. Already, there are evolving and enhanced ways in which car manufacturers can be lining up their technology, data and CRM to deliver bespoke customer experiences that increase sales pipeline efficiencies and meet the expectations of a 21st century driver.

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