Executive summary
In the years to come, technology pundits will remember the COVID-19 pandemic as the tipping point for digital transformation across industries, including the automotive sector. After decades of relatively small change, automotive companies are completely reimagining how cars are bought and sold. To be sure, a few OEMs were already, cautiously, embarking on their digital transformation journeys before the pandemic, but the COVID-19 pandemic hastened technology adoption as brands faced new pressure to improve the digital customer experience through online purchasing, seamless delivery, and 24/7 service.
Automotive sales and marketing is now on the cusp of a digital revolution. To prepare for it, companies will need to explore digitalization at each step of the customer’s journey. Insights-driven brand management, digital lead share, dealer omnipresence, in-store digitalization, digital field force enablement, next-generation automotive retail formats, post-sales customer experience, next-gen CRM are some of the ways in which automotive teams could digitalize their traditional sales and marketing functions.
Of course, this won’t be a straightforward journey; most likely it will be executed in phases under an aggregator to digital marketplace to integrated platform framework and cross-sector companies from the technology, online retail, and auto manufacturing sectors will converge to address this opportunity, likely developing a new integrated digital platform, like an Amazon for automotive retail.
Convenience is key: Digitalization of the automotive sales & marketing value chain
From retail, CPG, and health and banking, to airlines, restaurants, hotels, and media, more and more industries are adopting digital commerce. Digital marketplaces are driving this trend by enabling businesses to explore new strategies like shifting to selling essential products, focusing on cross-border sales, investing in new marketing initiatives, and innovating their supply chains. But to be successful, what businesses really need to focus on is customer convenience and making it the focal point of all their decisions.
Traditionally, the automotive sales and marketing value chain — comprising research by customers, product selection, and final purchase — has involved offline channels like brick-and-mortar showrooms, in-house financing, in-person negotiation, and paperwork. But these offline processes are now undergoing rapid digital transformations, and businesses are likely to continue digitalizing processes going forward.
Figure 1: Automotive Consumer Journey – Digital transformation. Source: Wipro Insights Analysis
Digital technologies have increased convenience for automotive consumers across sales and marketing processes. The maturity of these digital services in automotive retail varies — from nascent to growing to advanced — but in the wake of the COVID-19 pandemic, the industry has undergone a major shift as brands have had no choice but to turn to digital retail to limit human contact.
In “Transformed Emergence of E-commerce,” Wipro’s Thomas Vazhavelil and Anup Sukumar note that “technology and service providers are transforming e-commerce by bringing together strategy, implementation and enabled services, cloud-based technology platforms, and industry best practices.” Companies are investing in the latest technologies and transformation initiatives to make the process smoother, faster, and to offer outstanding customer experience throughout.
AI: The key personalization enabler for automotive consumers
AI is rapidly making its way into processes across industries, driving organizational change and digital transformation. Mediums like machine learning and natural language processing are being widely used to transform customer data into actionable insights. In the retail sector, AI is enabling sellers to predict customers preferences and pitch them a product even before they search for one.
Because of its tremendous potential, especially for personalization, AI can prove to be a key differentiator for automotive OEMs and retailers, helping them cater to dynamic consumer demand. For example, One-ID, an emerging concept in automotive retail, uses AI to better understand customer preferences and engage them right from the pre-buy stage, throughout the entire sales journey. To keep up with these AI-driven trends and growing consumer demand for personalized services, automotive OEMs have begun working closely with tech giants like Amazon and Microsoft.
Figure 2: Role of AI in automotive digital sales & marketing. Source: Wipro Insights Analysis
Technology challenges: Interoperability & after-sales support
In order to drive digitalization in automotive retail, the industry must also tackle the long-standing issue of interoperability. Even today, systems such as CRM, automated marketing, and dealer management are not typically integrated enough to reap the complete benefits of all the data available to them. Digital platforms that combine all these aspects to provide an integrated solution are essential, and their development is necessary to ensure value above what is being offered by siloed systems.
Another area where essential technology adoption is lagging is after-sales support. From servicing to repair and maintenance, a lot of after-sales support today lacks technology solutions (e.g. AR-VR for repair). Reasons for this include high costs and a lack of tech infrastructure, but with more and more customers starting to demand digitally enhanced after-sales support, brands need to invest in technology sooner rather than later to stay competitive. The electrification of mobility services will also make after-sales support more critical. Today, many places lack the infrastructure to provide reliable access to vehicle charging stations. Technology solutions that cater to such after-sales needs will likely emerge soon to fill the void. Eventually, enhancing customer experience through digital means, even after the sale has been completed (e.g. online remote support in case of vehicle breakdown, solutions around optimal fuel usage), will emerge as the new standard in automotive retail
Future models for automotive retail
Over time, a one-stop, online automotive/mobility shop is likely to emerge that will cater to evolving consumer preferences. This model will go beyond traditional e-commerce platforms to offer a wider range of value-driven digital features, along with adjacent opportunities in the vehicle and customer lifecycle. It will likely result from collaborations and mergers of OEMs with tech players like Amazon and Microsoft that can provide technology support in areas like AI-driven personalization, as described earlier, or with oil and gas companies like BP and Shell, which can assist with mobility services such as locating charging stations.
Access + Experience + Buy
Figure 3: Automotive Retail Transformation Model. Source: Wipro Insights Analysis
The role of automotive dealers and OEMs in future retail models
The future of automotive retail will be defined by data. Whoever will have the data will have the power, and with OEMs, dealers, and tech disruptors all vying for control of consumer data, two scenarios are likely. One is that OEMs, with help from technology providers, will take over the automotive retail value chain, including pricing and after-sales services and provide online solutions around it. The other is the emergence of a completely new online platform, something like an Amazon for automotive retail.
Figure 4: OEM-dealer relation matrix. Source: Wipro Insights Analysis
This future automotive retail model will need to be agile by design, be prompt and responsive, and be accessible anytime, anywhere. In this digital world driven by data, OEMs will need to take charge of customer relationships and define the roles of dealers and sales agencies to deliver a unified, personalized experiences across channels. And Wipro, with IP and solutions for the entire sales and marketing value chain, is well-placed to support this transformation in the automotive retail ecosystem.
Wipro solutions for automotive retail digital transformation
Wipro AutoInsights™ uses telematics devices to capture data from vehicles, processes that data in our custom-built analytics engine, then offers a wide range of insights and benefits valuable to players throughout the entire automobile ecosystem — from vehicle and fleet owners, insurers, telecom providers and device vendors, to service stations, car resellers, transportation departments, and law agencies.
Case study: Audi City
Wipro, through its fully owned subsidiary Designit, designed Audi’s fully digital showroom, Audi City, which allows customers to use large digital walls and tactile screens to fully customize the car they want. The experience was a success: Audi reported a 70% increase in sales volume and 20% more turnover per car.
Ashish Saxena
Vice President and Business Head, Manufacturing — North America, Wipro
Ashish has more than 25 years of experience leading Fortune 500 and Global 1000 client relationships across Asia, Europe, and North America.
Contributors:
Abhishek Gupta, Senior Manager, Manufacturing Insights Team
Anuj Joshi, Senior Analyst, Manufacturing Insights Team