The Automobile retail model has been unchanged since its inception. The chain of sale has always been 3-fold.
It began at the manufacturers, where they set-up the vehicle with all the spares and raw materials. Which then goes to the dealers upon their bookings received by the customers. And in the end, in the hands of the consumers after paying the initial amount and completing all the formalities.
A survey has revealed that only less than 1% of the car buyers were actually happy with this process. The Future of Automobile Retail poses a potential threat to the current model, and the change is already in action. Let’s take a look at the upcoming Auto Retail trends that are slowly changing the current model:
- Customer’s Brand Loyalty:
One of the major aspects of the model is that the customers amount to a certain % of brand loyalty. But the new customer is more cost-oriented, and he arrives at a purchase decision only after factoring more than just one brand. And 50% if the dealers see this as a great challenge towards brand loyalty.
- Third-Party Online Sales:
Digital Sales by Online dealers and E-commerce sales platforms run by third-party distributors is yet another threat to this orthodox model. The Original Equipment Manufacturers (OEMs) have an upper hand like 63% of the car shoppers would be willing to buy from them directly.
- Car-Sharing Model:
Car-pooling is slowly setting in the mind of users as a brilliant idea to reduce costs. For them, it is equivalent to owning one. So reduced customer footfall due to car-sharing is a threat to the reduction of potential sales in the automobile industry.
- Direct Online Selling:
Online buying directly from the manufacturer’s or brand’s website can be the next big thing. The reason why it is seen as a threat is that it reduced one step and the middleman in between and directly delivers the product to the consumer, hence effectively reducing the cost.
WAYS TO PRESERVE THE SYSTEM
- Dealers should work closely with the OEMs and create and practical customer delivery model. This will help them prevent losing buyers to online third-party platforms.
- Dealers need to spread their presence on Social Media and make it a part of their sales campaign.
- In order to avoid customer-hopping and increase the loyalty factor, the customer experience provided should be very strong. Once that is made irreplaceable, customer’s brand loyalty will increase.
- Investing in modern technology such as the AR and VR is a great way to give the customers an experience worth remembering. By this, dealers can ensure a virtual tour of the showroom and all the different designs and configurations of automobiles.
- They should set-up one point of sales contact in collaboration with the OEMs. This will prevent customers from wandering off to other dealers and pull them back to the dealers.
- Conclusion:
The original system is still in place and yet to be de-throned. The OEMs haven’t started to sell directly to the customers yet and the online automobile is yet to pick up the pace, it is yet to be even made into a scalable business model. But the next decade will decide the direction in which way the wind will blow for the Future Auto Retail Model.
