A core theme for our Fusion Live event is how the motor retail sector needs to start thinking beyond ‘omnichannel’ – at least in the familiar, conventional sense that we understand it today.
At present, retailers and suppliers think largely about omnichannel as the creation and maintenance of a consistent, integrated online and offline customer experience. In that context, there is inevitably a lot of focus on how dealers can best integrate systems and processes, as well as being able to rely on ‘one source of truth’ about the customer throughout the ownership lifecycle.
All of this is still crucial, and it remains at the heart of Keyloop’s technology strategy. Many dealers have some way to go before they can say they are delivering this breed of omnichannel experience for customers. However, we feel it is time to think about this form of omnichannel as just one stage in a journey to where we really need to be. We can use automated technology in new ways to help dealers maximise their margins, improve their conversions, boost loyalty, and improve the lifetime value of their customer relationships.
In particular, we should consider the expanding role that Artificial Intelligence (AI) can play in realising important new operational benefits. To understand where omnichannel needs to go next, we simultaneously need to appreciate the other, less welcome connotations of the word ‘artificial’, beyond artificial intelligence. We at Keyloop are exploring some of the unwanted ‘artificialities’ in motor retail. In particular, how interactions with customers are hamstrung by myriad artificial milestones and processes.
The most obvious of these is the embedded sense that customers buy cars when they reach the end of a finance agreement. When that moment comes, retailers typically commence a conventional sales process, informed where practicable by a basic awareness of the customer and the car they already own. Even cash customers are often engaged with according to arbitrary two-or three-year sales cycles that have entirely no relevance to them.
We need to move away from this. The end goal should be that the customer feels empowered to make a relatively simple commercial decision to buy a new or used car at a moment that most suits them and their particular circumstances. It should feel simple and rewarding, not driven by processes and cycles beyond their control.
Moving to ‘omnichannel 2.0’ requires us to step back and think about the data and insight at our disposal, and how we can best harness it. Imagine a scenario where we are able to contact an existing customer and present to them an opportunity to upgrade to a new vehicle – not at the end of a finance term but at a precise point when the data indicates that it is truly advantageous for them to do so. Those customers will become much easier to sell to, and at a time that suits the dealer, too, to maximise margin or to deal with an oversupply situation, for example.
Sales opportunities can be more automated and driven by the wealth of data inputs that are increasingly at the retailer’s disposal. We can consider the cost of the customer’s existing finance, the new offers and incentives from the OEM, the availability of stock we know is of interest to that customer, the value of the existing car, the likely cost of any rectification work that aftersales colleagues can tell us is required, and the servicing and warranty renewal costs that the customer might soon incur if they don’t change their car first.
If we are able to aggregate and distil this kind of information to present a hyper-targeted proposition to the customer, we can realistically imagine a scenario where we wholly circumvent their normal research and purchase process, where the customer doesn’t spend time visiting the websites of third parties, other dealers or even the website of the dealer that is presenting the offer. Why bother, when what is being offered is so relevant and compelling because it is enriched by so much insight?
And for the dealer it means a more virtuous alignment of supply and demand, making it possible to grow margins in a sustainable way.
The potential benefits reach far beyond the sales process. Improved car-to-dealer connectivity and exploitation of existing sources of aftersales data can help with predictive vehicle maintenance, service scheduling and just-in-time management of parts inventory. All of this can allow dealers to realise new operational efficiencies, take cost out of the business, drive lifetime customer value and materially reduce today’s cost to serve, as well as help with performance analysis and forecasting across the business.
Some of this will become increasingly essential because of market competition and the reduced income from the maintenance of EVs. We’re already seeing some major groups embrace the selling of parts and merchandise to make up lost ground in aftersales profitability as we move towards electrification. But data-driven sales and aftersales processes offer the potential to realise far greater benefits.
Of course, processing this vast amount of data for a streamlined sales operation is where AI comes in. Indeed, ‘omnichannel 2.0’ is only possible because of it. We’re at the start of a fascinating new era in the evolution of automotive retail, one where AI will help us rethink why, what, how and when we sell. Knowing where we are heading will ensure we are better able to lay the right foundations for getting there.
To find out how Keyloop is currently helping dealers enhance their revenues and drive operational efficiency, visit keyloop.com today.
