Automotive Industry

The Future of Automotive

The future of automotive is evolving at a blazing pace. Typically, the automotive industry has lagged many other industries and has predictably been more conservative in their approach to disruption. COVID-19 has significantly changed how customers are now shopping for cars, and the pandemic has caused a seismic shift in consumer behavior. This transformation has now ushered in some new consumer shopping trends out of necessity. Those changes include:

  1. WFH – Working remotely or hybridization of work leading to less reliance on automobiles compared to years past.
  2. Digital-centric shopping experience – The pandemic has strongly increased the consumer demand for a tailored digital experience without having to visit the brick-and-mortar storefront.
  3. Brand loyalty – Consumers are slowly shifting away from being brand-loyal to brand-agnostic. As cars continue to serve a utilitarian purpose, consumers are not as loyal to brands as compared to previous years.
  4. Value – In combination with the decline in brand loyalty also comes with the increase in search of value. In a post-pandemic world, the consumer has gotten a chance to re-think about what personal belongings are bringing the most value along with where they are spending the most time.
  5. Multi-Modal – Consumers are now getting more comfortable using ride-sharing companies and reducing carbon footprint if possible. They may rent a truck for the day if they need to move large items, e-scooters to explore the city, or even purchase a monthly car subscription if needed. The days of one vehicle serving multiple purposes are all but done. Future generations are potentially more likely to choose flexibility over being locked into a large transactional purchase such as cars moving forward.

With these trends in mind, the legacy automotive industry has a few key innovations as automotive brands reimagine the dealership model of the digital future. One key benefit (if we can call it that) of the pandemic is the pull-forward effect for the entire industry that has accelerated these shopping trends by the consumer by 5 – 10 years. Customers are now more comfortable in purchasing online, conducting meetings via videoconferencing, and as more technological innovation emerges customers are now more prepared to live/work/play asynchronously. Switching gears now let’s discuss a few tactical strategies to help brands navigate this exciting new future of automotive.

Here are some of the strategies we have advised companies within the automotive vertical to help go-to-market in a rapidly changing environment:

  1. End-to-End Experience – Instead of solely relying on going to the physical store, consumers are now opting to browse, select, and test drive the car they want to purchase from the comfort of their home. This does not mean that there will not be traditionalists that prefer purchasing in person but there will be a continued shift trending towards expectations of a digital experience.
  2. Personalization – Since customers are now more informed than ever, the opportunity to upsell add-ons to go along with the vehicle may be reduced greatly. This is where personalization comes into picture. Building a profile for your customer in a database that works across the entire brand ecosystem helps to personalize upgrade options tailored to the specific customer buying experience.
  3. Data – Brands have access to more data than ever before. Dealerships can now leverage that data to customize the shopping experience for the consumer. Not only does this help with the purchase of the car, but service add-ons as well. Being able to understand the full customer profile utilizing data the salespeople can offer the right type of vehicle protection products that fits the customers needs.
  4. Staff – This is also reducing the need for salespeople who specialize in negotiation and sales. The dealership of the future has potential to be heavily digital, so consumers are expecting a concierge-like experience that guides the customer through the decision instead of one that may lean towards being sales dominant.
  5. Connectivity – In the vehicle of the future being fully connected is a key differentiator. Whether its your car telling you when the next service interval is or gathering data based on driving patterns there is a host of benefits of providing connectivity infrastructure in future vehicles. Being digitally connected also opens potential new revenue streams by being able to provide subscription-based applications based on consumer demand.

The future of automotive industry is building a fully integrated shopping experience for the consumer that is convenient to them and provides value. As the technological landscape continues to shift to include virtual reality, AI/ML capabilities, electrification, and cloud-based solutions the automotive industry has a bright future ahead.

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