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What if I told you that Netflix didn’t kill Blockbuster and that Amazon didn’t kill big box stores? Considering that Toys-R-Us filed for bankruptcy this week and many blame Amazon, this statement may seem bold. But stay with me for a moment. I’m not arguing that the success of companies like Netflix and Amazon didn’t have an impact on the success of these other companies. Instead, I’m arguing that their company strategy — and unwillingness to embrace a changing industry — ultimately led to their death. This week I had the opportunity to share my thoughts on the state of online retailing in the automotive industry with dealers and vendors at Digital Dealer in Las Vegas. While many are hinting at the need for change, it’s time we take the next step and start taking action to ensure that the automotive industry doesn’t meet the same fate as these other epic failures.
When we look at the companies that have lost to the new tech giants, there’s one thing that becomes exceptionally clear. The problem isn’t the technology —failing to be customer-centric kills an industry or a company.
Let’s take a moment and look at three industries and companies that are embracing change, adapting their strategies and adopting new technology with one goal in mind: to better serve their customers and ultimately, survive.
The airline industry is a close comparison to the automotive industry. Both center on emotional purchases, have to deal with margin compression and are $900+ billion dollar industries. Both industries also face negative feedback about the customer service offered. While airlines haven’t quite mastered the customer service aspect of their business, their online and purchasing experience offers valuable insights to the automotive industry. One of the greatest lessons we can learn from airlines is their focus on choice and transparency. When customers are shopping, they have the ability to compare prices and options, while also having the opportunity to bundle different items like travel insurance, hotels and car rentals to create greater discounts.
Amazon has long been seen as a leader of customer service, specifically related to how they use their online platform to better serve the customer. While a car shopper will likely never buy a car with one click, the automotive industry can learn a lot from the retailing giant. For instance, Amazon provides a lot of relevant and helpful information for each product that helps the consumer make decisions. In addition, they predictively suggest additional products that might complement the one they’re already buying. Dealerships can similarly suggest warranty or service packages or other accessories and upgrades during the buying process based on consumer behavior.
It’s fascinating to see how the insurance industry has embraced the online process, especially considering how complex purchasing insurance is. But because it’s so complex, they’ve gone out of their way to make the process of buying insurance as simple as possible. One particularly helpful feature is the guided selling feature many companies use to walk someone through the process, calling out additional ways to save and asking clarifying questions along the way. In addition, they provide the ability to chat with someone — not intrusively, but just in case a customer needs that personal touch.
So, what can dealers do today to embrace online retailing?
1. Embrace online
First and foremost, it’s time for all dealers to embrace online retailing for what it is – inevitable.
2. Always mobile first
It’s not enough to just embrace online retailing, you also have to ensure that your online retailing platform is set up to meet customers where they already are — on mobile.
Customers are extremely price sensitive and want to know exactly what they’re getting. Show clear pricing online.
4. Accuracy is essential
The best online retailing technology will go nowhere if the payments that customers create online don’t follow them into the dealership. Make sure that your online payment building process translates to your showroom down to the penny.
The shift to online retailing is well underway, but we still have to continue to pursue better processes and not just better tech. Are you learning and moving fast enough to stay ahead?