Car dealerships are not losing importance

Panoff Consulting recently presented its latest study “The Future of Customer Experience”. We looked at what the touchpoints of the customer experience of the future could look like and what conditions need to be created for this to happen.
My colleagues Kristin Hertwig and Mark Schreiner presented the study under the moderation of Julian Boguschewski on June 29, 2022.

In this impulse, we would like to give you a little insight into one of our findings.

Instead of the car, the focus is on the customer. The customer experience does not take place in a fixed sequence, but is individualized from customer to customer. As can be seen in Fig. 1, OEMs and dealers must create and expand these touchpoints and, in particular, link them together holistically to ensure a consistent customer journey. How can a consistent customer experience be achieved? How should customer and vehicle data management be organized? How can the interests of dealers and manufacturers be united? What should be done to ensure sustainable change management? We deal with these questions in our daily work.
Figure 1: The Future of Customer Experience

The customer experience consists of a large number of touchpoints. The dealer plays an important role in enabling the customer to take advantage of these touchpoints. The future trends of “mobility as a service”, digitalization and car dealerships as a “point of experience” are driving not only OEMs but also car dealers to redesign their branches. Recent market research has shown that customers make an average of 3.3 visits to the dealership before signing a contract for a new car. There are also clear differences between the age groups. Among the under-30s, the number of visits to the dealership is 4.6, compared to just 3.7 among older people. This shows us that the dealership still plays an important role in the car-buying process.

Digitalization and online business must not be forgotten and should be taken into account when designing a customer experience. Creating synergy between the offline and online worlds remains one of the biggest challenges for OEMs and retailers. Most customers start their search in a web browser and are directed to the dealer’s various online channels via keywords, offers and ads. If an inquiry can be generated from this, action must be taken. The customer wants answers in real time. In addition, the dealership is no longer the only point of contact, but also an online representation of the dealership, the digital dealership. This should be a personal consultation that enables the salesperson to call up the customer profile before the visit via an online and offline link and then respond individually to inquiries during the visit.
The car dealership will continue to exist, but its basic form will change. Even if we find that end customers are leaving their own cars behind, this does not mean that they are driving less. A whole 9% increase in kilometers driven per person in Switzerland from 2000 to 2020 was recorded. The situation is the same in other European countries. In addition to the sale of new and used cars, this trend should be addressed by other mobility solutions: Shuttle services, car sharing, ride-hailing buses and trains, rental bikes or e-scooters.

By merging car dealerships into dealership groups, the existing locations become important representatives of the brands. At the same time, a positive and memorable experience with the brand and the dealership must be created. This can be achieved through certain facilities, e.g. restaurants, cafés and day care facilities for children, but also through the sale of accessories.

The dealership will continue to exist. But in order for it to move into the future, a number of initiatives need to be launched and the strengths of car dealerships need to be built upon. After all, proximity to the customer is where there is the most potential for the dealership.

Konstantin Zirkelbach

Consultant

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