The research is mounting that consumers expect much more from retailers — but how can you respond?
Source: PricewaterhouseCoopers (PWC) Total Retail Canadian customer expectations driving the next retail business model, February 2014
Many times in this column, I’ve referred to the need for dealerships to see themselves more as mainstream retailers than as a highly specialized and different breed.
If we do not make that leap, consumers will, and we will find ourselves increasingly out of step.
This is especially true when we look at consumer expectations and what demands they will place on retailers (including auto retailers) in the future.
There has been much talk about “rising expectations.” While that was (and still is) true, it is an observation that is too obvious and much too vague to be helpful in understanding what to do about it.
A study released in early 2014 by PricewaterhouseCoopers (with more than 15,000 respondents across 15 countries, including Canada) addresses four key retail customer expectations that will drive the retail environment over the next decade or so. These four expectations define the changing landscape much more clearly.
We could dismiss these expectations and say they refer mainly to traditional retail environments (mass merchants, grocery stores, department stores, foodservice, etc.).
But consumers are increasingly looking for the same basic components in all of their retail experiences, including buying a vehicle or having it serviced.
So, what do these four trends signal for auto dealerships?
Compelling brand story
One finding of the study is that the most important determinant of where a consumer chooses to buy is trust in the brand.
Yes, the specific product, availability and price are important, but trust is at the top of the list.
In the dealership context, trust in the brand is a little more complex.
It’s a combination of the manufacturer’s brand and the dealership brand. Trust is built over time and based on a consistently good experience, transparency and clear communication. It often results in customers passing on cheaper offerings, because they feel more confident dealing with someone they trust.
In the auto context, the manufacturer’s brand is clearly a key component of trust. But once they have decided on a brand, most buyers have choices in terms of where they buy or have their vehicle serviced. Your brand also needs to be the one that inspires the level of trust and the compelling brand that separates you from competitors, whether from the same manufacturer or a different one.
Customization
The advances in technology allow retailers to make much better use of customer and transaction information than ever before.
Nothing erodes trust and confidence in a dealership more than receiving communication or sales and service offers that are inaccurate, misdirected or ill timed.
Nothing builds trust and confidence like communication that shows clearly that the customer is not just another number, but someone whose business is valued and whose preferences are known and understood. Three aspects of customization are important in today’s environment:
- The need to protect the customer’s privacy and not overstep the boundary between intelligent communication and intrusion;
- The information used as the basis for customization must be accurate and consistent across all touchpoints in the dealership (sales, service, F&I, marketing, BDC).
To reinforce customization and really make it work, there needs to be a tangible benefit for the customer when they communicate or interact in any way with the dealership.
This could take the form of shorter waiting times for service write-up, a more efficient sales process based on information supplied by the customer, or simply making sure that staff acknowledge preferences in all communication.
So often, technology that enables customization is focused on making life easier for the dealership, ignoring the upside potential in making sure the customer experiences a difference.
Consistent communication across all “channels”
In a traditional retail environment, consumers use multiple channels, often when dealing with the same retailer.
This is becoming more prevalent in the auto context as almost all car buyers now have used the Internet to explore and narrow down choices, check dealer websites and, to a lesser extent, communicate with dealerships online before going to the store.
In the service context, online appointment scheduling is becoming far more prevalent. This is the environment that I referred to in a previous column as the “two solitudes” of auto retailing.
All too often, there is a complete disconnect with the information and experience online and what happens in the dealership.
This is very evident in online service scheduling systems that are not precise or accurate enough to ensure that the customer and the dealership are on the same page when the customer is on the service driveway.
Discrepancies in pricing and in what service items are required versus recommended are key reasons why many customers have an inherent distrust of dealership service.
Consumers are increasingly looking for an experience that is entirely consistent, whether in communication with different people or departments in the dealership, or regarding specific information about their vehicle or about aspects such as pricing, inventory and special offers.
Consistency increases confidence and trust in a brand or retailer and signals a business that is well run and cares about how they deal with their customers.
Transparency and real-time view of inventory
On the surface, this looks like something that only applies to the traditional retail model.
But, in the auto retail world, transparency and up-to-date information includes aspects such as: an accurate and complete view of the dealership’s new vehicle inventory and pricing, information on delivery status of a new vehicle, accurate information on service appointment availability and the status of the customer’s vehicle in the shop. In all of these areas, accuracy.
There are clearly operational considerations here. There needs to be a process whereby information is kept up to date and accurate and that does take resources — both technological and human.
The PwC study characterizes this expectation as “The power of big data in reverse: Customers want to know what’s available no matter where it is.”
This expectation will likely become stronger as consumers are increasingly able to get the information in all retail experiences.
The automotive retailing world is already a more complex environment than is the case in many retail situations.
But the dealership of the future will be a much more complex operation than it is today if these expectations are to be met.
When I look at these expectations and think about how dealerships can best prepare to meet them, there are a few considerations that come to mind:
- Break down the traditional silos in the dealership that get in the way of consistent communication and transparency;
- Build training programs that focus on more than just process, emphasizing the importance of building trust with customers;
- Develop metrics and standards built around consistency and transparency (not just the traditional CS measures); and
- Hire people who understand and have the ability to truly live through these changes.
