Will omnichannel automotive retailing remodel dealerships, as online car buyers seek self-service channels that bypass human face of sales?

Car buyers increasingly expect their new motors to come with advanced technological functionality as standard, ranging from safety-geared controls like lane-keeping alerts and Auto Emergency Braking to in-car Wi-Fi connectivity; but when it comes to applying leading-edge technology to the dealership sales experience, our market has been behind the curve compared to other retail sectors, according to some market-watchers.

Car manufacturers and dealers may have been using their online presences as part of their multi-channel sales and marketing strategies for years – often leading the way with interactive 3D visuals, live-action video and augmented reality website overlays. However, the main aim of these flashy features is still to coax customers into the car showroom for vital face-to-face conversations with real life agents while touching, feeling and test driving actual cars.

After all, a new car is a high-value, life-changing acquisition. By tradition, buyers want to touch, feel, smell, and test-drive their favoured four-wheeled fancy before they commit. Visceral and tactile exposure to the products, assisted by sales staff who know their product lines inside-out and are ever-ready to smooth the transaction through to fulfilment, are indispensable parts of the process – or are they?

If the analysts are right, increasing numbers of car buyers around the world are seeking alternative routes to ownership – routes that may bypass the high-spec showroom and its expertise altogether. Online consumer demands have wrought fundamental changes to the business models operated in other retail sectors, and car sales could be among the next in line to feel the force of their purchasing power, predicts management consulting firm Capgemini, for one.

Capgemini declared in its 2014 ‘Cars Online: Generation Connected’ report;

Connected consumers are in charge, They are confident about what they want and how they want it, secure in using technology to increase their power as car shoppers and owners, and comfortable driving innovation in the industry.

Perspicacious manufacturers are getting wise to the impending disruption, readying themselves to turn its effects to their advantage. And it’s here that omnichannel retailing is being espoused as the business model of first resort. As the primary interface between customer and car, dealerships seem destined to find themselves bearing the brunt of this retailing re-alignment, and so should be prepared to reinvent themselves along omnichannel lines, other market-watchers, including Frost & Sullivan, have warned.

Explanations of what’s meant by ‘omnichannel retailing’ can vary, and getting your head round the concept can be complicated by the fact that omnichannel is based on existing multichannel automotive sales strategies – the approach that seeks to provide car buyers with a uniform ‘shopping’ experience online via PC or smartphone, or in a physical, bricks-and-mortar dealership. The purchasing process should be seamlessly indifferent to how customers interface with the seller.

But Omnichannel runs deeper than multichannel marketing because it entails more than just an upgrade to the backend IT infrastructure. Once embraced, omnichannel strategies often precipitate a wholesale restructuring of dealers’ sales strategy so as to embrace the online car buyer who wants to be a self-serving entity with minimal interaction with dealership sales staff.

With this in mind, omnichannel retail models aim at converging digital and physical retail environments, while shifting much of the decision-making and transaction processing online. Dealerships will need to present the customer with a product appraisal experience identical to what they experienced digitally from their own online device. This could mean having only a very limited range of vehicles actually in situ, and using high-tech digital product spec and display systems for customers to study the cars they are interested in. Product genius-style agents would be on hand to explain how to use these new systems, or provide additional information – although in theory, just about everything the customer would want to know could also be accessed in the comfort of their living room.

Futuristic and empowering, sure. But aside from the hype around omnichannel, right now very few mainstream manufacturers are exploring its full potential. That said, both Ford and Dacia already have omnichannel-style programmes in place, with GM (in the US) arguably pushing the all-online car-buying concept most explicitly with its Shop Click Drive website.

In the UK, Hyundai dealer Rockar is now operating two ‘digital showrooms’ located in shopping centres – one in the Bluewater in Kent, and another in Westfield Stratford City in East London – allied to online purchasing, and probably exemplifies the omnichannel approach most overtly so far.

Here interactions with display models is digital and interactive, using customer-operated tablets or their own devices. Showroom visits can pre-date or post-date customer digital interaction online. With its bricks-and-mortar outlets located between retail brands such as Body Shop and Marks & Spencer, these sites resemble not so much car showrooms, as car stores.

Before manufacturers and dealers make the huge ‘bricks and clicks’ investments necessary to bring omnichannel retailing models to market; they will want to be convinced that increased sales will justify the initial spend. Capgemini reckons it’s a no brainer: its ‘Generation Connected’ report identifies a coming wave of connected consumers who declare themselves highly willing and likely to make a car purchase entirely online. The question is are we ready for them?