Within the quickly evolving panorama of automotive retail, a shift is underway from conventional, product-centric, and dealership-focused gross sales fashions to customer-centric, digitally delivered approaches. Understanding client behaviours and expectations is essential in navigating this transition.

The EY Mobility Shopper Index (MCI) survey reveals that whereas enhancing the digital expertise is essential, the bodily dealership stays a strong attraction for shoppers who place a excessive worth on the human ingredient when buying a automotive. Furthermore, the dealership is a crucial hub for long-term worth creation, a key driver for sustainable progress sought by each OEMs and sellers.

The EY MCI report, now in its fourth 12 months, supplies in-depth evaluation of mobility traits and car-buying intentions primarily based on responses from 14,500 shoppers in 20 international locations. The findings point out that for each electrical car (EV) and inner combustion engine (ICE) automotive consumers, the dealership continues to play a big position. Shoppers prioritise the dealership expertise when buying a brand new automotive, searching for not solely to expertise the car bodily, but in addition to achieve assurance that they’ve made the correct selection. The relationships shoppers construct with dealership workers drive loyalty and, in flip, worth creation. Even digitally savvy EV consumers desire having dealership workers reply their questions on comparatively new and quickly evolving EVs in contrast with the familiarity they’ve with ICE automobiles.

On the similar time, using digital channels is on the rise for numerous features of the shopping for journey, significantly for preliminary phases like pre-sales analysis and data gathering. This complicated panorama challenges the prevailing narrative of an all-encompassing digital transition. Beneath the floor, numerous teams of automotive clients desire completely different mixtures of digital and bodily channels. The problem for each OEMs and sellers is to grow to be genuinely customer-centric by providing the omnichannel experiences shoppers want whereas maximising long-term worth by tapping into the brand new and present worth swimming pools.

Digital-first however sellers keep sturdy

For all automotive consumers, whether or not desirous about ICE or EV automobiles, the shopping for journey more and more begins on-line. Preliminary analysis and data gathering on-line, together with using social media, third-party apps, and dealership and/or OEM web sites, is most popular by 83% of ICE consumers and 90% of EV consumers. Digital channels are additionally favoured for pre-sales actions reminiscent of utilizing on-line automotive configurators, digital actuality automotive viewers and reserving take a look at drives.

Adopting a digital-first method doesn’t imply abandoning the dealership fully. Because the shopping for journey progresses, client preferences shift to incorporate visiting dealerships to work together with salespeople, expertise the automobiles in individual and acquire in-person quotes.

Varied teams of automotive clients desire completely different mixtures of digital and bodily channels

By way of precise purchases, consumers’ desire for dealerships over on-line channels has steadily elevated from 54% in 2021 to 61% in 2023. Surprisingly, EV consumers, usually thought of extra digitally savvy, present the strongest desire for dealerships, with 64% selecting to make a purchase order at a dealership relatively than on-line, in contrast with 58% of ICE consumers. Vehicles aren’t like cellphones, and even digital natives search in-person reassurance when making a big monetary dedication.

Shoppers depend on dealerships for 3 key features of the car-buying expertise. Particularly for EVs, that are nonetheless comparatively new, shoppers search educated seller workers to supply a deeper degree of interplay and assurance in making the correct car selection. Whereas digital excursions are beneficial, shoppers desire to bodily expertise a automotive earlier than committing to a purchase order. The proportion of all automotive consumers visiting sellers to expertise a automotive has elevated by 3% from 2022 to 66%. Then there may be pricing. Regardless of the rising reputation of fixed-price retail with OEMs, over 60% of each EV and ICE consumers desire visiting a number of sellers to safe the most effective quote for a specific car. The proportion of all automotive consumers visiting sellers to get quotes has elevated by 6% in contrast with 2022.

Reassure the lovers, persuade the skeptics

The MCI Survey segments respondents primarily based on their degree of EV-mindedness, from EV lovers to EV skeptics. Sellers play an important position in addressing the wants of those teams. EV lovers signify 13% of all consumers. These shoppers are dedicated to sustainability, prioritise efficiency over price, and are inclined towards utilizing digital channels for preliminary analysis. Regardless of their digital affinity, they nonetheless desire to go to sellers for quotes and to expertise the car, with 64% selecting a seller for his or her last buy.

EV skeptics signify 11% of all consumers. Skeptics are conservative, cost-conscious and eco-doubters. They closely depend on dealerships in any respect phases of the shopping for course of, displaying a desire for in-person interactions tailor-made to their considerations.

Shifting gross sales fashions

To adapt to evolving buyer behaviours and speed up the transition to EVs, OEMs are revamping their gross sales fashions from product-centric to customer-centric approaches. Two different gross sales and distribution fashions are difficult the normal dealership mannequin.

The direct-to-consumer mannequin, favoured by new entrant OEMs, provides extra management over pricing and the client journey. Nevertheless, constructing attain and scale requires substantial OEM funding.

Generally, incumbent OEMs searching for to transition their legacy seller networks desire the company mannequin. It supplies publicity to clients, management over pricing and leverages present dealership distribution networks.

Many OEMs are experimenting with these fashions, reminiscent of making new retailers agency-only in some areas or differentiating gross sales fashions between powertrains (EVs through company route and ICEs by means of conventional dealerships).

Too far, too quick?

The shift to customer-centric fashions is constructed on sure assumptions about client behaviour, together with the desire for fastened costs, the substitute of bodily channels with digital ones, and the predominance of on-line channels for automotive purchases. Nevertheless, real-world client behaviour and preferences problem these assumptions.

Shoppers, even digitally savvy ones, desire visiting a number of sellers for quotes and decide to make their purchases in-person, not on-line. Digital experiences are seen as complementary to bodily ones. Within the eagerness to embrace digital channels and lower dealership-related prices, OEMs danger damaging their established relationships with sellers and, paradoxically, turning into much less customer-focused. There’s a danger of shifting too far forward of shoppers, detracting from the shopping for expertise relatively than enhancing it.

Bodily plus digital is the important thing that can unlock worth

True customer-centricity means giving clients what they need, and the MCI information suggests that customers want each bodily and digital parts of their shopping for expertise. Private interactions at dealerships are nonetheless extremely valued, forming the core of the acquisition journey even for tech-forward shoppers.

Moreover, EVs stay comparatively new and fast-changing in shoppers’ minds, with numerous teams of automotive consumers at completely different phases of their EV journey. OEMs should meet clients on their very own phrases, utilizing the combination of bodily and digital channels they like, relatively than anticipating clients to adapt to predefined expectations.

The fitting mix of bodily and digital not solely enhances the client expertise but in addition catalyses worth creation by opening doorways to rising worth swimming pools past conventional income streams. Alternatives embrace areas like insurance coverage, finance, telemetry-based upkeep, different possession fashions, micromobility, and mobility-as-a-service. Unlocking these alternatives requires OEMs and sellers to work collaboratively and concentrate on data-driven decision-making, modern worth administration, and operational transformation.

The mix of EV vs ICE must be much more centric to buyer desires with EVs turning into a most popular selection vs mandated. Continued enhancements in mannequin selection, vary, charging infrastructure, charging time and price are nonetheless wanted to gasoline that selection.

Concerning the creator: Randy Miller is EY World Superior Manufacturing & Mobility Chief