Millennials or Gen Y buyers, who make up the new generation of vehicle buyers, are driving seismic changes in retail strategies. The internet boom, plethora of information and social media explosion have influenced consumer behaviour, forcing automakers to see the retail landscape in a new perspective.
The car buyers of today typically follow a ‘buying funnel’ process where they start with a large consideration set and narrow down to a single vehicle. The process sometimes becomes so painful that it takes away the joy of buying a new car. Troubling areas include price negotiation, salesman pressure, necessity to visit multiple dealers for the best price, lack of information and time taken at the dealers.
Technology-enforced disruptions in the retail landscape call for innovations to accommodate the next generation of buyers. In the future, multi-brand third party websites are expected to drive the vehicle buying process, eliminating the inefficiencies that exist today. Cars are no longer considered ‘cool’. With cut-throat competition in the industry, it is vital for original equipment manufacturers (OEMs) to get ahead of the competition in generating interest in their new products. OEMs are expected to follow the lines of hi-tech companies to create ‘experience centres’ for product experience. This would aptly supplement a strong online presence across various websites, journals and social media.
Be it a search on a vehicle, a suggestion from a friend or even the hunt for an expert opinion, the road to vehicle purchase starts online. Given the push for multi-brand outlets and the growing need for comprehensive information at a single place, an online marketplace similar to Flipkart and Amazon is expected to take centre-stage in the vehicle buying process.
With the online market place acting as a substitute for multiple dealer visits, the websites, therefore, are expected to be equipped with anytime-live professional support for queries. This would add a vital personal touch to the virtual process.
An online marketplace could well introduce crucial changes to the automotive retail world. One could be the introduction of multiple brands under the umbrella of a single website. Prospective consumers would no longer need to visit multiple dealers or multiple websites for any information about vehicles in the same segment but belonging to different brands.
It would be unwise to ignore the potential of the social media as a selling tool. As the new avatar of word of mouth communication, the importance of “feedback from friends and family in the social world” can hardly be ignored. The millennials make their voices heard in multiple channels through their social media identity and it is these voices that might prove to be the influencing factor while deciding on a car. It can be predicted that ‘social media feed aiding decision making’ would be the way forward in the buying process.
Offers and availability Multi-brand, multi-vehicle test drive as a service at the click of a button would aptly supplement the online marketplace. Such services (already in their nascent stage in the US) when available at the doorstep will prove to be an important step in decision-making in the future. It gains even more significance, considering the fact that it takes away the typical salesman pressures of a showroom environment.
The decision of purchase ultimately depends on the offers and vehicle availability. Price transparency and stock availability would be the key to win buyers. The website could offer customers the price transparency (rebates included) they have longed for. Inclusion of finance and prompt delivery would enhance consumer convenience and value. At the dealership, it would be a smooth transition from online transactions to vehicle delivery.
The world of online sales kicked off with books. Now it has everything, right from apparel to toys and even grocery.
This generation of buyers are not even shying away from purchasing ‘high involvement’ consumer goods such as mobile phones or even an LED TV. The day is not far when the online marketplace will drive the sale of cars.
The writers are with Infosys Ltd