Digital Technology
Aug 28, 2018

Finding the right path for the online automobile purchase journey

The world of purchasing automobiles is changing. Digitalization, personalization, car and ride sharing, connected cars, and multi-channel consumer engagement are some of the things that are impacting how automobiles are purchased today. Retail and business customer expectations are changing, as individuals and corporations can now quickly interact and access information across media any time, anywhere. Customers expect a seamless journey from online to offline, regardless of entry and exit points, in or out of the sales process.

The challenge for automotive manufacturers and finance companies is to reflect this changing behavior and level of expectation in their existing customer experience and marketing strategies. To do so, the focus has to be on removing customer pain points, no matter how small, and crafting the pick-up points in a multifaceted customer journey.

In working with our auto finance clients and their customers, we have identified a growing dissatisfaction among consumers with the automobile purchase journey. Many expect this experience to mirror their digital experiences from other industries, such as ordering groceries, appliances, and furniture online, including the option to apply for finance as part of their journey.

A typical automobile purchase customer journey can be divided into four stages:

  1. Car selection and configuration
  2. Affordability and finance quote options
  3. Discounts and offers at dealerships
  4. Finance options and deal finalization at dealerships

Each stage of the journey is owned and managed by a different party. The manufacturer and financing captive manage the first two stages, while the dealer completes the last two stages independently. As a result, the customer experience is generally disjointed and not as good as it could be.

While most manufacturers and financing captives have ensured that the first two stages are delivered as an almost seamless experience, there is still significant room for improvement overall. Most of the immediate potential for improvement lies in creating a seamless experience across the steps and ensuring stages three and four can be completed online along with stages one and two. However, the historical significance and status quo maintained in dealer networks means that progress has been slow, given the perceived risk of alienating them.

To address this challenge, third-party service providers as well as automobile manufacturers and captive financing companies have taken slightly different paths, as follows:

  • Creating a parallel online and retail experience, such as Rockar does in the UK with Hyundai and Land Rover
  • Offering a complete online purchase experience with a minimized inventory, such as Hyundai's Click-to-Buy
  • Extending the online experience, starting with soft credit checks and online finance approvals, to booking vehicle experience dates (physical evaluation and test drives) and deliveries, all of which is picked up as an advanced lead by the dealer

The first of these paths requires substantial setup effort and in the short term is more likely to be a marketing exercise aimed at elevating the two brands' positioning in the market as innovators. This is evident from Hyundai's decision to end its partnership in early 2017 to pursue alternate ideas. To give credit where it is due, I believe the industry needs to pursue such out-of-the-box efforts to create the momentum to force change and drive the customer journey experience in the right direction, similar to the way in the mobile industry Samsung drove customers towards larger screens in the past decade.

The second path is a more futuristic experience, which assumes a significant portion of the population is comfortable with the idea of purchasing the car without an advisor or physically experiencing the car. While this is the most seamless experience, it is still a few years away before it becomes mainstream and customers are as comfortable buying vehicles online as they are with buying furniture. Part exchange options, AI-driven online buying assistants to simulate dealer behavior, and returns and refunds could become vital components as this experience becomes more mainstream.

About the author

Harish Naidu

Harish Naidu

Director, Transformation Services

Follow Harish Naidu on LinkedIn