Future of OEM Mobility Retail, challenges and opportunties

The automotive sector is changing radically. Some factors that have a significant impact on current business models are:

Connectivity, digitalisation, electrification, autonomous driving, sustainability, urban mobility, smart cities, alternative mobility solutions and changing consumer behavior.

That is why the sector has shifted from a classic product driven business model towards a customer centric business approach. This approach requires constant adaptability to changing consumer behavior. Recently some OEM’s introduced new business models such as car sharing that are built around a consumer’s changing needs. It is just a question of time before other innovative concepts will be presented. As market's will shift, societies change their perceptions, so will supply chain. Therefore it is necesarry to keep on thinking outside the box.

Customer's Virtual and Physical Shopping experience

Most consumers already embraced a digital lifestyle. They use the internet before going to a dealership. In the future people will become more phyisical connected.

Today, customer use the online car configurator, the customer most of the time knows what they are looking forehand, in most cases, the customer is only visiting the dealership one time, mostly to combine the visit with a test drive and to touch and feel the car. 

Today the automotive sector is shifting towards a consistent approach that unites a customer’s virtual and physical shopping experience. Digital elements and showroom elements work together to create a holistic experience that communicates a storyline (when done correctly). The key advantage of this online-offline experience is an expected higher brand loyalty.

One major benefit is access to a customer’s data and to acquire knowledge of their preferences.

Implementing new Technology

AR in enterprise has a significant impact within the aerospace, automotive, retail and hospitality business. The future will become more metaverse and societies will at the end become more physical connected to the internet. The current hardware prices could eventually drop. Improvements in quality and variety of content are stimulating further innovations.

Recently, OEM’s already adopted new Virtual technologies, such as Virtual Reality and Augmented Reality. Some of them are successful, however it requires a well-defined position within the sales process, to avoid a short term solution.

Launching this within your network means that your format should be flexible enough to cover future innovations. It has to be combined with a realistic business plan with understandable KPI’s (realistic measurements, knowing what to measure), a well-defined position within the sales process and an environment were all groups involved are constantly being challenged to look beyond the borders of the existing program. Your business case should be strong enough to convince 'traditional thinking dealerships' (yes, they still exist) to invest.

The automotive industry is highly competitive and consumers are demanding a choice in type of experience. OEM’s will therefore have to improve their flexibility through:

New brands, new formats, new distribution strategies, mobile stores, down town retail experiences, test drive centers, XL car repair centers and XL retail format's, upgraded online platforms, revised used car strategies

 These new developments will have a large impact on the dealer infrastructure. For example: real estate, new positions, sales force, CRM systems and combining the right mix between physical and virtual experience.

Vehicles will become increasingly complex, this means faster replacement rates and rapid technology evaluation. Therefore dealer networks have to change to tackle this, for example: restructuring dealer networks or large scale service stations combined with XL retailers. 

 "A successful automotive retail concept should be an unique and exiting experience with enough room for a personalized approach. Because in some cases the customer will only visit you once.

The format should stand out in comparison with the main competitors and should be an integral part of the brand values. It also has to be flexible to fit within multiple different formats and settings. To create such a concept is like playing chess, it requires sensitivity, reason and logic as well as a clear understanding of the impact of every element within the retail environment”

Please share your thoughts on the subject in the comment section or contact me.