Executive Summary.docx

Executive summary: The study “Consumer buying behaviour through omni-channel in automobile industry” aims in analysing the attitude and behaviour of consumer through omni-channel while buying motorcars in India. The main rationale behind this analysis is to gain knowledge about omni-channel as a new introduction tool in the market, its impact, its importance on consumer keeping automobile industry as a way to justify the topic. This thesis helps in every way to get knowledge about a typical car buyer’s experience that traveles several different digital channels (websites and mobile apps) and visits to dealerships or special events, while the buyer gathers information, test-drives, configures and ultimately buys a car. Also this study talks about the several differences between premium customers and those buying less expensive cars. Developing new omnichannel sales approaches to maintain competitiveness & have a good hold over market.

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Chapter 1 1.1 Introduction

to the topic:

In marketing and technology you often know that something is still new when you can’t find one unanimous way to spell it. Ecommerce, eCommerce, e-commerce – remember those days? We now find Omni-channel, omnichannel and omni channel across the web, each attached to prestigious brand and pundit thinking. Instead of arguing about the correct spelling, we just see it an indicator of something new and yet to be decided by the masses. By no means is the concept under-noted or fledgling. And, as with most things that are new, there are still developing ideas. Omni comes from the word Omnis which can mean all or universal. This is in comparison to other categories out there, like “multichannel”, from the Latin word Multus, meaning multiple or many and from crosschannel, derived from the Latin word Crux, meaning to go across. The way that many are explaining omnichannel today is: ‘cross channel being done well’. Examples are often that the mobile app should match the responsive design of the website which should thematically reflect the look and feel inside the store. We’d argue that doing cross channel well with the user in mind, is not worthy (nor useful) enough to deserve a new category. Instead, we hold the belief that Omnichannel is something new and notable, even revolutionary, not just a marginal evolution of existing thinking. Great, so now that we’ve stated that omnichannel is being used merely as a buzzword for crosschannel with finesse – what is omnichannel? Omnichannel is about true continuity of your experience. But what’s key is that it extends beyond a single brand’s universe. Being omniscient is perceiving and understanding all things. Not all things at Best Buy. Not all things at Target. Not all things at Gucci. Omni is perceiving all things. And the best way for a customer to perceive everything is to allow them to own their data and experience, then give them the ability to use it to guide creation and context of every future experience. Think about it. Today our life is continuous, but our customer experience is anything but that. We learn and have memory of all the good and bad things in life. We strive to limit or eliminate the negative ones and increase the good. These patterns that we strive to replicate are our preferences. The ability to have a continuous experience across brands,

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across format and across devices that is completely bespoke – that is the promise of a new way of thinking and marketing that has been long unnoticed. Myriad examples abound. I’m shopping for shoes. I go online. I see things I like and I save them in my Burtons account. I leave the website and go to Westfield to hit the shops. I walk in the door and I have no way to easily use my Burtons experience in an Office shoe store. I see some shoes at Office, then I end up going to Top Shop where I start fresh looking at what is in front of me in the moment. I can give 100 more examples of how my investment of time in research offline and online is a fragmented experience with some tools to make it more coordinated, but only within the bounds of a single brand. Which would be fine if I only shopped for shoes my entire life at Burtons. But the vast majority of the population likes to browse and compare to see what else is out there and once that happens, the ease and functionality of my omnichannel experience crumbles. But wait you say, you can’t be suggesting that Burton’s help people buy shoes in Office. That would be counter to everything retailers try to do. The idea that retailers can stop people from shopping across brands or devices is mocked each time a bar code was scanned in a store to check competitors’ pricing. When brands think customer experience they need to think omni. Its not about yourcustomers or their customers, its about all customers. With the rise of NFC and personal device use in store, brands need to awake to the idea that the days of closed data and 75% off for loyalty points from only shopping at their brand are changing quickly. If a brand wants to start thinking omnichannel, then they need to be open and involved in making the customer’s experience continuous and universal. Have doubts? Look at the role of social media and customer relationship. Remember those brands who have refused to evolve and engage and have a dialogue? Many of them aren’t with us today. As much as the social media revolution has meant the two-way exchange in dialogue and interaction, omnichannel is the realization of social business. If the first phase in the evolution of the customer relationship was messaging and media, the future is product research, selection and payment. With personal prefence data that can be used universally on devices, brand can either jump at the opportunities made real by omnichannel or wait until their brand is the only one not integrated and playing nicely to allow consumers to be continuous.

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The brands who can best interpret omnichannel data and understand all customers are the winners. There will be a new dimension of customer decision. As a final decision is being made to purchase, price, relationship, service and continuity will all be considered. If you’re thinking that matching the colors and content across devices is omnichannel, we would encourage you to reconsider. If you are ready to lead in the next phase of social business and get the most out of the promise that our new identity as customers is truly omniscient, then let’s connect. This way of thinking is the future promise on which we founded CloudTags. There are a few key points to acknowledge in order for this idea to be made reality: 1. In exploring and discovering products in your brand domain that data should be transferable for me to collect and use universally.

2. In exchange for this data, the customer will give you access to other data they have collected that will far outweigh the value of the limited data in your brand universe.

3. All experiences offline and online should allow an individual to identify themselves and present a brand with the opportunity to access my preferences.

1.2 Omni-channel Marketing: Omni-channel marketing has become key to marketing success as customers engage with companies in a variety of ways, including in a physical store, online via websites and mobile apps, through physical and virtual catalogs, and through social media. Consumers also utilize landlines and smartphones or tablets to search for products, access services, and make purchases. People also interact with brands and companies using apps on smartphones, tablets, desktop computers, and laptops. The challenge for organizations is to make all of these interactions and experiences as seamless, consistent, and effective as possible for customers.

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Organizations must employ omni-channel marketing methods and strategies in order to meet customers where they are. Consumers expect more personalized communication with companies through the various channels and devices they use, and companies that do not keep up with the shift are losing ground to their competitors that do. Time Warner Cable senior VP of customer care John Bowden says organizations that are most successful with omni-channel marketing view it through the eyes of the customer, “orchestrating the customer experience across all channels so that it is seamless, integrated, and consistent. Omni-channel anticipates that customers may start in one channel and move to another as they progress to a resolution.”

1.3 Omni-Channel Marketing Challenges: One of the most significant challenges marketers and their organizations face when shifting to omni-channel strategies is knowing the difference between omni-marketing and multi-channel marketing. Because so many organizations struggle to make the jump from business-centric to customer-centric practices, they also struggle to put the customer at the forefront when they create integrated experiences for customers.

Breaking down silos and breaking free of traditional marketing campaigns also is difficult for some organizations when they first adopt omni-channel marketing practices. The shift to omni-channel also requires buy-in from the entire organization and a shift in company culture. As Leah Stigile, VP of global business for Toms Shoes points out, “Luckily, we have buy-in from across the organization for omni-channel,” and her company proactively works to ensure cohesion over time, especially with events such as their annual one day without shoes event to help people across all customer touchpoints band together around a unified message to drive awareness about people lacking necessities such as shoes.

1.4 Omni-Channel Marketing Best Practices: Stacy Schwartz, digital marketing expert, consultant, and adjunct professor at Rutgers Business School, echoes the notion that an omni-channel approach must be a customercentric marketing approach: “It acknowledges that mobile and social have enabled customers to not only quickly switch between channels, but actually use channels simultaneously. For 5

example, checking out product reviews on their mobile phone while evaluating a product on a physical retail store shelf.”

The best omni-channel marketing strategiesaccount for the fact that customers engage with companies in a variety of ways across platforms, and they ensure consistent experiences every time. Customers look for receiving personalized interactions and conversations with brands. Some of the best practices for omni-channel marketing include

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Accounting for each platform and device customers use to interact with the company and then delivering an integrated experience to align messaging, goals, objectives, and design across each channel and device

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Developing a unique omni-channel infrastructure with collaboration between several departments

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Adopting new technologies: make sure your site is optimized for mobile and enable customers to stop directly from social media sites

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Considering virtual reality experiences for customers

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Testing customer experiences and measure everything

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Segmenting your audience

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Listening and responding on preferred channels and devices

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Personalizing experiences and offering the most convenient interactions as possible

Omni-channel marketing is a must as customers and organizations have unprecedented access to digital technologies and channels. Our uber-connected world has created mounds of customer data for companies; if they use it correctly, they will be able to key into customer affinities and behavior to adopt omni-channel strategies and solutions to better manage the data, understand customers, and exceed customers’ expectations at each and every interaction.

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1.5 The future of car sales is driven by a whole new customer journey: The typical customer journey has radically changed when it comes to buying a car. Over eighty percent of new car customers (and all used car buyers) begin the process online. And almost all these people visit manufacturers’ websites at some point. Some studies predict that 4% of all cars may be sold via online-only car sales by 2020 (which means around 4 million vehicles). But even when the purchase is eventually closed offline, the pre-sales process that is leading the way to dealership is just as important. Whether it started online or not, customers do want to talk to an expert and take the car for a test drive - after the first spark of interest is successfully ignited. If dealers and brands don’t try to interact with these shoppers in digital channels, they lose their authority as the primary source of information and their ability to influence and attract the customer. From a psychological point of view, buying a car has both an emotional and a physical part. The emotional part involves engaging with the brand and the people that represent it - i.e. the dealers or telemarketing professionals themselves. The physical side includes ‘feeling’, touching or even trying the car. Both dimensions can be leveraged and enhanced by innovative customer experiences - for example with augmented reality, video and/or a virtual showroom solution (as we will explain later). The problem is that most manufacturers fail to provide even the most basic necessities, for example easy access to dealers or call centers. How would they expect to drive leads to their physical locations then? With all those well-informed, digital-savvy customers out there, they are playing Russian roulette if they don’t establish customer interactions across channels. The approach should also shift from ‘selling’ to ‘helping to buy’. It is not about sheer numbers, it is about what the specific customer needs - no matter when, where and how. No wonder that half the dealers expect the sales process (customer interaction, marketing, lead management) to be affected the most by the automotive digitization trend. The vision of omnichannel in automotiveentails that whilst new cars nowadays are primarily sold via physical dealerships, a holistic bricks and clicks ecosystem will tie digital into the process in a natural way. 7

To back this up, manufacturers and dealers need to unify their data sources to be able to understand and serve their customers. Integrating this expertise into different touch points, they can increase conversion rates and provide a personalized, seamless omnichannel experience. This is critical in the phase of discovery and decision making, aligned with contemporary customers’ need for getting all information upfront, in a convenient way.

1.6 Omnichannel in automotive industry ties in-store and digital together: In traditional automotive retail, the showroom (i.e. the physical location itself) has been the core of the shopping experience. Still, the concept of the car showroom has stayed pretty much the same over the past fifty years or so - in most cases, sweating sales too much. This might have been sufficient back in the day when the thread of the customer journey was linear and predictable. But not in the omnichannel, multi-platform era. Nevertheless, the physical experience a showroom allows is still how most people fall in love with cars (just think about the two sides of customer psychology mentioned before). The key to success is to transform today’s dealerships into an omnichannel sales channel, combining the advantages of the digital world with the strengths of the physical experience. In a nutshell, moving towards a dry, hard-sales oriented experience to a stimulating, customer-centric one.

1.7 Virtual car showroom enable omnichannel in automotive As discussed earlier, showrooms have a great potential as seeing and feeling the cars is an essential part of the customer journey. But they are also quite expensive to maintain and often stay deserted during low-traffic business hours - and not just due to the fact that they are often in the middle of nowhere. The virtual car showroom is an exciting new innovation as it helps companies better monetize their dealerships and the web visits alike. By allowing sales representatives to showcase the actual car models to online customers via real-time video, they can trigger interest in booking a follow-up visit or test drive, attracting valuable leads to the dealers.

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Chapter 2 Review of Literature Stacy's Car-Buying Journey Stacy is a 32-year-old mother of two. At the time of her search, she drove a mid-size SUV that fit her family of four. But with a third child on the way, she needed a new car that would fit three car seats, and so she had to decide between leasing a larger SUV or going with a minivan. Stacy's Car-Buying Journey During the three-month period leading up to her decision to lease a car, Stacy's research included over 900 digital interactions where she intentionally sought out information related to an auto lease or purchase. 71% of Stacy's digital interactions occurred on mobile. These interactions—which took the form of searches, visits, video views, and clicks—were on Google, YouTube, manufacturer websites, dealer websites, and review websites. Stacy's which-car-is-best moments Six out of 10 car shoppers enter the market unsure of which car to buy.2 Stacy started out focusing on family friendliness and safety, which led her to consider several brands and models Stacy's is-it-right-for-me moments As shoppers start to weigh practical considerations (like seating capacity and number of airbags, for instance), they start to determine their checklist of important features. Stacy's checklist included fitting three car seats and a sliding middle row. Stacy's can-I-afford-it moments As shoppers narrow down their options, cost consideration comes into play. Stacy explored pricing and payment options that were right for her, including: price points less than $30,000, comparisons of leasing vs. buying, lease exchange programs, and the trade-in value of her current SUV.

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Stacy's where-should-I-buy-it moments Though much of the car-buying process has moved online, the visit to a dealership remains a crucial step for many car buyers. In fact, search interest for "car dealerships near me" has doubled in the past year.3 As Stacy explored nearby dealerships, she also considered local inventory, deals, and specials. Stacy's am-I-getting-a-deal moments Though many am-I-getting-a-deal moments take place at the dealership, Stacy spent time researching deals both on the lot and off. She researched lease money factors, read about how she might forgo a dealer altogether, and crowdsourced actual prices paid for different brands and models so that she could show up prepared. The Implications for Auto Marketing Ultimately Stacy leased an SUV that met the criteria she was searching for in her micro-moments. In her own words: "My most important criteria were number of seats and cargo space to fit my whole family and all our gear." While Stacy is just one person, she is one of many auto shoppers looking to find the answers to their questions in micro-moments. Each of her 139 Google Searches, and the hundreds of interactions that followed, represent a series of opportunities for auto marketers to be there and to be useful. As a starting point for your brand, think about how you're meeting potential car buyers like Stacy across the key auto shopping moments. Is your brand there? With the majority of the car-shopping process moving online, and increasingly on mobile, it's crucial that you be there when and where people are looking. Does your media plan make it easy for someone like Stacy to find answers, especially in search? Is your brand useful? Beyond just being there, consider how useful your brand is. Does your brand answer the questions Stacy had about safety, seating capacity, and price? Do you make it easy to compare across models and competitor brands? And most importantly, since the majority of Stacy's research happened on mobile, are those answers optimized for a mobile experience?

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Are you holding your brand accountable for connecting in these moments? Make sure you're measuring your brand's share of these key moments. Are you incorporating all of the potential outcomes from mobile research—online and offline—into your attribution model? Are you accounting for the impact that mobile has on sales? Have you tested the impact of increasing mobile budgets in order to quantify the lift in sales?

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Chapter 3 3.1 About the industry: Consumers used to omni-channel experiences in other industries are now expecting the same experiences when buying their next car. In the past 12 to 18 months alone, the percentage of customers influenced by digital and mobile when making automotive purchases increased from 40 percent to 55 percent.9 Automotive consumers rely on digital tools for researching cars, spending up to 75 percent of their shopping time online.10 Thirdparty service providers have begun to fill gaps in digital services that the existing ecosystem does not provide. This includes transparent pricing services like TrueCar and streamlined, fully-online used car markets like Carvana.11 Various automotive retail players are recognizing the need to embrace new practices in a competitive market, particularly when considering the digital ecosystem as an important information source and purchase influencer.12 Deloitte recognizes that the live, in-person buying experience remains important in the modern world as a supplement to increasing digitization. In automotive retail, offline will continue to be a core component of the customer journey for now. Test drives for example are an important offline activity with 88 percent consumers13 looking to test drive before purchasing. Servicing is another offline activity that plays a key role with two out of three consumers saying considerations such as confidence in a dealer’s ability to repair and provide free routine maintenance influence their purchasing decision.14 Although kicking tires may have been replaced by clicking tires, it is important to note that, in the greater retail environment, customers who actually use a digital device in-store as part of their live shopping process are generally more likely to make a purchase, not less.15 To be effective, retailers, regardless of industry, should, “combine the best of physical and digital experiences in new ways that matter to [the] customer to achieve growth.

3.2 The Rise of the omni-channel experience in automobile industry: The automotive retail model has been relatively consistent over the last century: Vehicles are wholesaled by OEMs to dealers. The transaction from OEM to dealer is financed by captive finance organizations aligned to the OEM before the vehicle is delivered via third party logistics companies to the dealer. The dealer then sells the vehicle to the customer that similarly finances through the captive finance organization or through their bank. This model has persevered even as the rise of e-commerce has brought major changes 12

to most brick-and-mortar retailers. As companies like Amazon and ebay emerged, offering convenience of shopping and fast but seemingly free delivery, traditional retailers had to find ways to incorporate e-commerce into their business model. Customers flocked online as shipping became more reliable, credit cards were more readily available, and personal data security was ensured by companies like TRUSTe and the WebTrust. Online retail sales have experienced double-digit growth since 2005, except during the recession in 2008 and 20093,4,5 and is expected to continue growing.6 Despite the flurry of online activity, the prophesied end of the brick-and-mortar store still hasn’t arrived. Successful retailers have recognized the value of a truly omni-channel; experience integrating the best of both the physical and the digital and making the transition between the two seamless. Retailers have realized that sales are not one-time transactions but should be attached to the lifetime of the customer as they travel between different channels. Emerging loyalty programs showed the value in tracking customers and encouraging return purchases. In 2015, 64 percent of retailers7 say their loyalty/rewards program is the best way to connect with consumers. The need for omni-channel marketing and sales is the natural result of the desire to move to a more customer-centric retail model. Digital today both complements the physical shopping ecosystem and helps create a seamless customer experience. Even online-focused digital retailers are now finding ways to complement their online presence with physical world assets. Warby Parker is an example of a digital brand leveraging the omni-channel trend. Although they have primarily achieved success through their global digital retail environment, they see the value inherent to combining digital and physical experiences. Warby Parker’s model allows consumers to try on multiple pairs at home before ordering their prescription glasses per their personal needs, In addition to their online channel, Warby Parker has begun to focus on building brick-and-mortar stores, including a flagship store in New York City, to allow for more personal service. There are three major global trends that are putting pressure on retailers to shift towards omni-channel and will finally pull automotive: Connected consumers: Consumers today are constantly connected and have the latest pricing data and reviews right in their hands. In turn, this is causing them to be more purposeful shoppers who are no longer browsing the showrooms or dealer’s lots hoping to find their match.

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New retail concepts: New models such as direct-to-consumer models, home deliveries, and brand boutiques create new expectations for consumers. Automotive retailers will soon need to prepare for these changing expectations as customers find value in these new retail models. Digital technologies: The rise of big data, cloud computing, and advances in core digital technologies need to be leveraged, allowing businesses to more agilely address customer needs. In the case of automotive retailing, this means beginning to tap into the 10 hours of third-party research8 and the data trail left behind from hundreds of page views, social comments and third-party interactions.

3.3 Omni-channel customer journeys in auto retail: Consumers used to omni-channel experiences in other industries are now expecting the same experiences when buying their next car. In the past 12 to 18 months alone, the percentage of customers influenced by digital and mobile when making automotive purchases increased from 40 percent to 55 percent.9 Automotive consumers rely on digital tools for researching cars, spending up to 75 percent of their shopping time online.10 Thirdparty service providers have begun to fill gaps in digital services that the existing ecosystem does not provide. This includes transparent pricing services like TrueCar and streamlined, fully-online used car markets like Carvana. Various automotive retail players are recognizing the need to embrace new practices in a competitive market, particularly when considering the digital ecosystem as an important information source and purchase influencer This study recognises that the live, in-person buying experience remains important in the modern world as a supplement to increasing digitization. In automotive retail, offline will continue to be a core component of the customer journey for now. Test drives for example are an important offline activity with 88 percent consumers looking to test drive before purchasing. Servicing is another offline activity that plays a key role with two out of three consumers saying considerations such as confidence in a dealer’s ability to repair and provide free routine maintenance influence their purchasing decision.

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Although kicking tires may have been replaced by clicking tires, it is important to note that, in the greater retail environment, customers who actually use a digital device instore as part of their live shopping process are generally more likely to make a purchase, not less. To be effective, retailers, regardless of industry, should, “combine the best of physical and digital experiences in new ways that matter to [the] customer to achieve growth.”

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Chapter 4 Project Details 4.1 Objectives: To understand the attitude and buying behaviour of consumer while purchasing car.

To understand the effectiveness of omni-channel; the new tool in the market.

To study the impact of omni-channel on consumer

To understand the ways of gaining mindshare in the automobile industry

4.2 Limitations: Study is limited to the consumers within the limit of Mumbai city

4.3 Research Methodology: This is a “Survey based Research” because it will give a deep understanding of how omnichannel is being impacting the consumer

4.4 Sources Of Data: Primary Data: 

Conducting survey

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Interview with the employees of different levels.

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Informal interaction with the customers.

Secondary Data: 

Magazines.

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Websites 16

Chapter 5 I. Data Analaysis & Interpretation: A typical car buyer’s experience traverses several different digital channels (websites and mobile apps) and visits to dealerships or special events, while the buyer gathers information, test-drives, configures and ultimately buys a car.

1. Almost 60% of car buyers begin online. Rather than taking their family to a dealership on a weekend to look at cars as their parents might have done, nearly half of all customers globally now begin online— mostly from the office or in the evenings in the comfort of their living rooms. The share of online touchpoints stays high throughout the purchase experience and will continue to increase.

40% 60% Offline Online

2. Customers switch between online and offline channels Customers switch between online and offline channels and want to move seamlessly among them. While online is becoming the most important starting point, buying experiences are still not pure digital plays. Customers typically shift between different online and offline channels at least four times, and they expect their preferences to carry across channel boundaries so they don’t have to repeat them again and again. 17

Customer Switch

More than 4 times 4 times 3 times

2 times 1 time 0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

3. Brand, model and price More than 60% of customers decide on brand, model and price before visiting a dealership. Increasingly, customers know exactly what brand and model they want, and how much they want to pay, before visiting a dealership Customers spend a significant amount of time researching their purchase online, but most still visit dealers for a test drive, final configuration and the purchase.

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Chart Title 100% 90% 80% 70% 60% 50%

No

40%

Yes

30% 20% 10% 0% Price

Brand

Model

Automakers and dealers should not misinterpret customers’ predetermination of a brand and model as indicating overly strong brand loyalty. Actually, the opposite is true. Car customers’ loyalty has been decreasing over the past decade, and prospective buyers are much more open to switching brand or model for a better match or package.

4. Influencers in car purchases Friends and family are important influencers in car purchases.Our survey found that friends, family and colleagues are the most influential and trusted sources when deciding on a new car. Among survey respondents, 44% of buyers follow recommendations they get in their private environment. Another 30% rely on online product reviews and test sites, which continue to gain influence, increase information transparency and simplify comparisons across brands. Dealers placed third, with only 26% of buyers calling them their most trusted channel.

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Given the importance of personal recommendations, automakers need to focus on building “promoters”—customers who are so satisfied with their purchase that they will strongly recommend it to their friends, family and colleagues. Creating promoters pays off twice: Not only do they show higher rates of loyalty and repurchase, they also create referrals and positive word of mouth that can influence other buyers. A comprehensive strategy for creating promoters goes beyond selling great cars and offering good service. Increasingly, automakers need to complement these achievements with an inspiring digital ecosystem of product information and compelling offers.

6. Time is of the essence; the window of consideration is short. The average shopping episode, from initial research to purchase, is only about nine weeks.Many customers don’t contact dealers until late in the process. But automakers and dealers who wait this long may be too late. They need to find ways to engage with customers earlier (sometimes even before they think about buying a car) and reach a wider audience— not only existing customers, but new ones as well. Automakers and dealers will have to find ways to connect with their most promising prospects. Daimler has a Mercedes Me app and corresponding Mercedes Me stores in cities l, which host events to showcase the brand, in locations where sales are not the focus. There are many ways digitalization can help automakers and sellers stay relevant. The right analytics will help connect automakers with online car shoppers and smooth introductions— 20

perhaps through an invitation to the automaker’s Instagram account or a direct offer for a test drive sent through the app when a shopper is in the vicinity of a physical store or dealership.

6. Offering online purchasing is a must, as more than 25% of customers are potential users. Only about 2% of customers in our global research sample have bought a new car online, which means they have signed contracts and paid without visiting the dealer. Given the infrequent opportunities to buy online today, this low percentage isn’t surprising. We expect this share to increase significantly: Up to 65% of our survey buyers said they would consider buying online in the future, with buyers in India most open to online buying and those in the UK least open at 50%. Even though intent does not always translate to action and regulatory hurdles can get in the way, we expect more than 25% of customers could become potential online buyers over the years.

II. Premium vs. mass-market buyers Our research identified several ways that premium buyers have different experiences than customers in the mass-market segments. 

More interactionsPremium car customers have about 25% more interactions during their buying episodes than mass-market customers. This should encourage premium automakers to develop more robust ecosystems to guide customers through the car-buying episode. Consequently, non-premium carmakers will want to exert greater influence on customers in the few touchpoints they have.

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More determinedNon-premium customers are less decided on specific brands, with about 10% to 15% of non-premium buyers completely open to brands, compared with only about 5% of premium buyers who are similarly flexible.

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Fewer test drivesCustomers in the non-premium segment do more test drives, buy more stock vehicles and rely more heavily on advice from the dealer—perhaps because they are more price sensitive and thus more likely to accept the most attractive offer.

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Chapter 6 6.1 Findings These are valuable efforts, but they are still limited to a relatively small scale. With more direct customer interaction and more sales online, automakers and dealers will be forced to rethink and upgrade their entire sales operating model, focusing on five dimensions in particular. 

Create new functions and roles. To meet the demands of an omnichannel sales model, automakers and dealers will need to fill new roles and staff them with skilled employees.

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Upgrade core processes. Fulfilling customers’ requirements will require new processes, including direct customer contact management (that is, channeling requests to the right person, no matter which channel they come in through).

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Update the organizational structure. Because an omnichannel sales process crosses functional boundaries and requires close collaboration across functions and business units, automakers will need to restructure some parts of the organization, breaking down silos and flattening some layers, in order to serve customers across the entire purchase episode.

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Implement a new governance and steering model. Automakers will need to broaden their focus beyond volumes and margins to include more operational aspects in their models for steering their sales process. New elements such as campaigns, communication content and, most important the consistency of retail prices across channels will need to be coordinated to ensure seamless cross-channel experiences.

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Adapt incentive schemes. To prevent undesired competition between channels, incentive schemes will need to be adapted. For example, dealers could be rewarded for getting a customer to buy online (saving on system costs) or register with an online service (tying customers to the brand), or for helping an online customer with a special configuration question (strengthening direct sales). In order to achieve the next-generation sales model, automakers will need to build new capabilities. They will need to attract new talent to create exciting digital experiences and customer episodes, as well as upgrade their IT capabilities to provide the apps and tools required to operate in an omnichannel world. Building these digital capabilities will not only help serve customers better, but could also help automakers cut their sales and marketing costs significantly. 22

6.2 Recommendations: Given these findings about the changing nature of the car buyer’s experience, how should automakers and dealers approach the challenge of developing omnichannel sales excellence? Future leaders will need to build strengths in five critical areas of the sales experience. 

Find new ways to appeal to buyers. Increasingly, car buyers expect the same levels of innovation and personalization they find in online consumer services. To meet those expectations, automakers and dealers need a deeper understanding of their customers. As more of the purchase episode takes place online, automakers and dealers need to actively manage their online presence, including social media. Even among less digitally savvy customers, traditional large-lot dealerships may not generate as much interest as small showrooms downtown or pop-up “brand experiences” at special events. Gaining a deeper understanding of customer preferences will help automakers and dealers develop new features for the customer experience, including virtual test drives, augmented-reality views of a new car’s features or new driver health and wellness features.

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Manage channel boundaries effectively. Every time customers switch from one channel to another, automakers and dealers risk losing preferences or other data—which could result in frustration or loss of those customers. To avoid that, they will have to find ways to bridge channels, creating a true and seamless omnichannel experience. A customer might expect to start a configuration in the app, fine-tune it with the help of an online sales agent in a chat, share and discuss it with friends on social media and post a picture of herself in the new car online to gauge reaction. Some customers might be receptive to an invitation to come into a dealership for a test drive. Ensuring that customers’ preferences and history are available across channels requires not only the connection of IT systems, but also the cooperation of all the players in the ecosystem.

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Build analytic capabilities to generate valuable insights. Learning more about customers by analyzing data allows automakers and dealers to communicate more effectively and create more compelling offers. Increasingly, the ability to generate meaningful insights from information available at the dealer, online and from connected vehicles will separate winners from losers. For example, car owners who play music at top volume might be receptive to upgrades for their sound systems. Those who drive 23

mostly at night might be interested in stronger LED headlights or a retrofit preheater if sensors indicate frequent cold starts in wintertime. 

Bring buyers into the ecosystem. Customer interactions used to be limited to a few moments before, during and after the sale or service event. But an omnichannel experience supports a long-term relationship with customers over the life of the vehicle and beyond. Automakers can take their brand experience to a new dimension, creating new opportunities to learn more about customers and ensure they are present when buyers make purchase decisions. Apps that manage interactions with the vehicle— locking or unlocking remotely, monitoring maintenance and communicating with the dealer’s service department—are already in the field. Buyers who use these apps remain within the automaker’s ecosystem, allowing the automaker and dealer to stay in touch, develop the customer relationship and present new offers.

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Adapt the dealer network. As more customer episodes move online, dealer networks will see less use. Automakers will need to take an active role in shaping the contours of their future dealer networks, which are likely to comprise fewer dealer partners and outlets, especially in mature markets. At the same time, new outlets such as downtown showrooms and pop-up brand experiences will require considerable thought and investment.

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Chapter 7 Conclusion The Future of Shopping the advent of digital retail technology was rather shaky, almost becoming a complete failure, when the dot-com bubble burst. But now, the picture is completely different. Digital retailing has grown in volume and is highly profitable, too. Today, the buzzword is “omnichannel retailing”. As the name suggests, it refers toretailers interacting with customers through every possible channel – physical stores, websites, kiosks, mails, call centres, social media, mobile devices, televisions and more. Unless traditional retailers come up with a truly novel game-plan, they are likely to fade away. Digital retailing will continue to grow fast because of the vast selection of goods, the reasonable prices, the convenience of shopping from home, and the access to product reviews and recommendations. Meanwhile, traditional retailers are still struggling to incorporate digital innovations into their physical stores. This study points out four reasons for this state of affairs: •Retailers were burned by e-commerce hype during the dot-com bubble. Many created separate online organizations to maximize valuations. But, it only led to serious differences between these groups. Even now, the collaboration between the retailers’ store and digital operations is weak. •Digital retailing threatens existing store economics, measurement systems, and incentives: Traditional metrics like same-store sales, instore sales per labour hour, and compensation systems, do not apply when sales reach 15 – 20% of the revenues. •Retailers tend to focus on the wrong financial metric - profit gains: Retailers’ stock prices are driven by return on invested capital than by margins. • Conventional retailers haven’t had any great experiences with breakthrough innovation: Retailers are most comfortable with incremental changes, and are reluctant to adopt a more novel approach. Retailers must face the reality. They should start from scratch to develop a strategy tocompete with omnichannel shopping. Customers want the best of both worlds – the convenience of digital shopping as well as the experience of shopping at a physical store.

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Retailers must remember that the shopping experience includes not just visiting a store, but also searching for various vendors, comparing prices, quick and hassle-free returns, and so on. Retailers can send coupon codes to customers’ mobile phones, and provide locationbased services. They must strategically attract customers at a time when they are free. Traditional retailers must also make full use of their biggest asset – the physical store – by making the whole experience captivating for the customer. A successful omnichannel strategy will not only ensure a retailer’s survival, but also revolutionize the retail industry itself. Retailers who understand that the digital and physical arenas complement rather than compete with each other, will succeed.

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Bibilography

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Questionaire

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Annexure:

KardZee Introduces Omni-Channel Engagement Solutions for Automotive Industry San Francisco-based tech company launches suite of offerings targeted toward auto dealerships AUTHOR PRESS RELEASE PUBLISHED JULY 31, 2018 COMMENTS 1 AS#404: NO AD FOUND IN ROTATION San Francisco — July 31, 2018 — KardZee, a mobile media platform that provides tangible and digital outreach solutions, announced today a new suite of offerings designed specifically for the Automotive Industry. With this expansion into the Auto Industry, KardZee brings Dealerships an improved way to engage and nurture their existing clients across each Dealership portfolio in Sales, Referrals, Service and Leasing. Unlike most other engagement platforms that focus solely on the use of digital outreach, KardZee has a patent-pending omni-channel approach: personalized, bespoke and one-to-one marketing tools using tangible, digital, and social outreach, all managed by a 6 Touchpoint Program. This unique, automated program allows Dealerships to engage with their clients on a regular, recurring basis, while simultaneously ensuring that existing clients and referral opportunities don’t fall through the cracks. Each step in the program is designed to reach clients and referrals with a combination of outreaches proprietary to KardZee. Managing people and

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processes is one of the biggest challenges for these Dealerships and can impacts sales and bottom line financials. “KardZee is what the industry needs; fully automated engagement combining digital outreach laser focused with human touchpoints all without the need to train anyone,” said Richard Farler, KardZee Brand Ambassador for the Automotive Industry. Selected Auto Dealerships will begin working with KardZee in their 60-day Basecamp. KardZee Basecamp is a deep dive into Dealerships’ CRM and DMS that concludes with a hands-on, managed program executing strategic engagement and nurturing campaigns across each of the dealership’s portfolios. “Auto dealers routinely spend thousands of marketing dollars on impersonal, automated, digital campaigns.” said KardZee Founder Keverne Denahan. “Nowadays, consumers want a more personalized approach for engagement. People really appreciate receiving a bespoke tangible card in the mail, which is how our campaigns begin. This initial, traditional outreach sets the stage for ongoing digital and social interaction that support each other and result in one-to-one personalized engagement.” AS#404: NO AD FOUND IN ROTATION KardZee programs are eligible for most Auto Industry manufacturer Co-Op reimbursements. KardZee provides tangible and digital outreach solutions to more than 25,000 users in four countries and across five industry segments. The company provides patent-pending B2B2C engagement and nurturing products for the automotive, real estate, travel, lifestyle, loyalty, rewards and well-being industries.

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