Earlier this year we saw the launch of the Hyundai Click to Buy website, the first car manufacturer to let its customers complete the entire purchase process of a new car online. Buyers are able to choose and customise the model they are interested in, get a quote for trading in their current car and arrange delivery all from a desktop, phone or tablet. Only buyers wishing to purchase on finance are required to actually head to their local dealer to sign the paperwork. CEO of Hyundai UK said that this is the result of years of customer feedback and a realisation of a demand for making the process of buying a new car “easier, simpler and cleaner – doing away with haggling through fixed pricing”.
My perception is that pretty much every consumer journey is going fully digital, from grocery shopping to mortgage applications. I think there are two main reasons for this. Primarily, convenience – services like Tesco’s home delivery take a lot of time and effort out of regular shopping. But secondly, people prefer to independently research their consumer decisions without the pressure of a salesperson sat across a desk. This second point is more applicable to higher value purchases but with the wealth of online reviews, video reviews, comparisons, customer reviews and so on, people can make incredibly well-informed purchasing decisions. Social proof and peer-to-peer recommendations are the biggest influencers in consumer decision making. In addition, with Hyundai’s service, buyers can avoid two bug gripes with buying a new car: pushy salespeople and the dreaded trade-in negotiation. Buying a car is now as easy and stress-free as buying some milk and eggs.
Buying a car is nothing like buying milk and eggs though, is it? When spending such a large amount of money on something, solely digital perhaps isn’t enough. With cars, the most important part of a purchase decision should be the test drive – nothing tells you more about what a car will be like to drive and to live with than actually getting in and driving it. Despite big investments by car firms on immersive digital assets such as VR driving experiences, these cannot ever replace the value of a test drive. Unless price and finance are the only factors in your approach to buying a car, this will be a big drawback of the fully digital purchase process.
Car firms have always recognised the importance of Monte Carlo-grade hospitality and customer care. From “exclusive” new car launches, to test drives to special prices, customers want to be made to feel special and valued. This way, when it comes to renewing their car, they’ll go back to “their guy/girl because they always sort me out”. Customer retention is arguably more important to manufacturers than new customer acquisition, based on the assumption that buyers tend to spend more on subsequent cars and are easier to sell to. The fully digital sales process removes some key interactions with the customer and opportunities to upsell or present not-yet-considered alternatives are lost. By not building a rapport and a relationship with their car dealer, will buyers find it is easier to switch brands later on? Possibly! However, if this transparent and easy option for buying a car attracts buyers who wouldn’t have previously purchased with you then all you need to worry about is how to adapt your customer retention strategy to them. Some brands are doing a great job of digitising their customer care already. For example when your Audi or VW goes in for a service, you can now get a video walkthrough of everything they’ve worked on email to you.
In my opinion, yes. Most car manufacturers already offer configurators and finance calculators on their websites already, so why not give users a chance to finish off the process and pay online too? Strategies for upselling and customer retention can be adapted for these customers and in the long term, this should save costs from the high overheads of building and running physical dealerships. Just like Tesco home delivery, this service won’t be for everyone but it will certainly offer a preferable approach to buying a car for others. My main reservation, however, is that I once ordered milk and eggs from Tesco and they delivered cream and egg white powder. Let’s hope car manufacturers are less relaxed about their order fulfilment.