@Tata-JLR: Alex Smout, Principal at InMotion Ventures, speaks to Automotive World about transforming the customer buying experience

Consumers today are used to having things their own way. Whether it’s recommendations on Netflix and Spotify, or bespoke shopping experiences on Amazon and ASOS, the customer experience is all-important. The automotive industry is no exception. As cars continue to become safer, more comfortable, and more environmentally friendly, the purchasing experience should also evolve. Various factors mean this evolution isn’t happening as quickly as it should, however.

 An opaque and complex process

The move toward a better car buying experience is hampered by a lack of transparency around pricing, specification and total cost of ownership. With new powertrain options such as plug-in hybrid (PHEV) or battery electric (BEV) affecting vehicle price, running costs and depreciation, pricing has never been more confusing. Add-ons and other bespoke touches can often change the price initially quoted by a retailer, and the addition of finance arrangements just complicates matters further.

Car financing has always been confusing for consumers but with HP and PCP as part of that process, it’s now more difficult than ever. The structure around car purchase can amplify these anxieties—often reserving the finance discussion until after a car is chosen. This approach is needlessly stressful for the consumer who may not know which cars are within their price range until the very end of the process. To top it all off, customers may then discover their dream car has a delivery time of over nine months owing to the semi-conductor shortage.

EV-Experience-Centre-Milton-Keynes-UK
New powertrain options such as plug-in hybrid (PHEV) or battery electric (BEV) are affecting vehicle price, running costs and depreciation, and as a result pricing has never been more confusing

Overcoming challenges

It’s clear that something needs to be done to improve the customer journey but innovating at the point of purchase requires complex improvements to the Dealership Management System used by retailers nationwide. Given the widespread dependency on this software it’s crucial all improvements are made in a functional and effective manner, so as not to upset the national ecosystem.

This is where many start-ups have begun to take up market share, with brands such as Cazoo delivering cars to consumers through a purely online buying experience. Startups like Digital Motors also work with traditional dealerships to bring their inventory and finance partners online to offer consumers a similar end-to-end online buying option. The financing side is also seeing innovation. Businesses such as Carmoola’s mobile first approach are giving control to the customer, bringing the finance process to the very start of the journey and using modern approaches to risk assessment to be more transparent on affordability.

Modern user habits have also led to the rapid emergence of car subscription models such as Drover or Pivotal. In uncertain times this approach offers flexibility, simplicity and transparency at a similar price point to financing. The flexibility of these subscription services has even more value for consumers considering electric, and numbers are on the rise with OEMs pledging to phase out new internal combustion engine vehicles.

A balanced future

The move towards a digital customer journey has led some to argue that physical dealerships are no longer integral to the buying experience. However, there is not a one size fits all approach. While utility focused brands may lean on features and price to drive online sales, luxury brands look to the surprise and delight moments of real-life experiences to gain a competitive advantage. For those reliant on these touchpoints, dealerships offer the perfect channel to win new customers.

Beneath the purchasing layer lives an ever-growing ecosystem of value-add services

Forward thinking brands will go one step further, leveraging new services to win over the undecided: services such as The OUT’s premium rental service, or Envoy’s car sharing schemes—highly valuable touchpoints for getting consumers behind the wheel and nurturing relationships to the point of purchase.

In today’s market the buying experience holds the keys to long-term returns, and the successful dealerships of tomorrow will be those catering to all needs through a hybrid approach. Beneath the purchasing layer lives an ever-growing ecosystem of value-add services. New brands and expectations are forcing automakers to prioritise Customer Lifetime Value over a unit sales economic view. And dealerships are uniquely positioned to deliver on commitments to best in class experiences.

If innovation at the point of purchase opens the door to a rich new world of services, improving the buying experience is no longer low priority; it’s a business-critical strategy through which loyalty is earned and new revenue streams unlocked.


The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.

Alex Smout is Principle at InMotion Ventures

The Automotive World Comment column is open to automotive industry decision makers and influencers. If you would like to contribute a Comment article, please contact editorial@automotiveworld.com

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