Automated experiences in other industries will impact consumer expectations for auto retail
How far away are we from these two scenarios?
Sound a bit far-fetched?
Perhaps not, when you look at how quickly technology develops and is assimilated into everyday life.
The time lapse between the emergence of technologies and their assimilation into everyday life is getting shorter as components like technological innovation, infrastructure, cost, regulation and consumer desire all converge more quickly, especially when benefits of convenience, safety and cost add up.
Are consumers warming up to automation?
Automation has quickly become part of our everyday lives. Automated systems are pervasive in so many aspects of consumer life that we take them for granted and probably can’t remember doing certain things any other way.
You can check into hotels or for your flight without dealing with a human being. You can book a table at a restaurant. You can bypass the grocery store line-up and use self checkout.
You can go for a year without visiting a bank branch. In fact, in one bank branch in Shanghai, you won’t find any humans and you’ll be greeted by a robotic concierge to help you if needed — and yes, you can talk to the robot and she answers you intelligently!
The percentage of (Canadian) consumers who agree that a fully self-driving car will free up time so they can focus on other activities increased from 46 per cent in 2017 to 49 per cent in 2018. – Source: 2019 Deloitte Global Automotive Consumer Study
While there are still some roadblocks (self checkout systems in grocery stores have been slower to take off), it is clear that consumers are adapting to automation in almost every aspect of life.
We have also learned that they don’t see different parts of their lives as separate “silos” when it comes to experiences and expectations.
They carry their expectations for service, technology and interaction across all activities and as improvements happen in one area, they expect the same improvements in other areas.
The auto retail business is certainly part of this in both the sales and the service experience.
Some hesitation among consumers
But, when it comes to autonomous vehicles, there is still some hesitation on the part of consumers. Safety is a key issue. A new global study conducted very recently by Deloitte, found that in Canada, “Consumer perception about the safety of self-driving vehicles hasn’t improved over the last year.”
You’ll notice that the study shows consumer hesitation about safety between 2018 and 2019, likely due to a few highly-publicized incidents involving autonomous vehicles.
We can probably expect the earlier trend to resume as automated driving and autonomous vehicles become more commonplace and make their appearance in different kinds of mobility activities.
According to the SAE (Society of Automotive Engineers) J3016 definitions (Levels 1 – 5) we are already well beyond the basic driver assistance systems levels (Levels 1 and 2) in many areas and are headed for quite widespread deployment of Level 4 and some Level 5 systems (full driving automation) by 2021.
That’s now only two years away! Consumers have always shown a real ability to adapt to change and quickly forget old ways of doing things.
We also need to think beyond the vehicle itself.
In the auto industry, most of the recent media focus has been on autonomous vehicles and how this technology will impact the industry and our lives.
Going back to the two scenarios painted above, what does the dealership landscape look like in 2027?
Probably not like the Shanghai bank branch, where your customers will only be able to talk to a robot, but certainly very different from today.
The reality is that there are still close to 25 million light vehicles on the road in Canada and even though dealerships encounter mostly newer vehicles, many of those currently have fairly limited or no autonomous capability, either in driving or in terms of communication.
But that balance will change and the implications for dealerships will be quite profound. Not just because the vehicles themselves are changing, but also because consumer needs and expectations will change along with them.
Consumers value efficiency and seamless experiences now and are experiencing improvements in both.
What will the physical dealership look like? Will it be smaller, with fewer staff, but more stand-alone locations for sales and service? What different qualifications and skills will staff need? Will there be the same need to carry inventory? What investments in technology and infrastructure will have to be made? Will there be more shared services for daily operations and where will these be located and who will own them?
One of the more interesting dynamics will be the potential conflict between new levels of seamlessness and efficiency (aided by technology) and personalized treatment of customers.
I believe that the two will not necessarily be mutually exclusive in a new environment.
Consumers value efficiency and seamless experiences now and are experiencing improvements in both.
I also believe that “personalization” will come to mean a situation where, not only does the dealership get it right in terms of product and process, but also gets it right in terms of making sure that dealings with customers precisely and accurately address their personal needs.
The technology will be there to facilitate that. Personal relationships will not take a back seat, but will flourish or flounder on the dealership’s ability to keep up with the changes that are taking place.
An interesting article from the econsultancy firm in the UK (Robots or humans: which provide a better customer experience? – May, 2018), poses the question about robots vs. humans.
While this is a rather extreme comparison, their point is well taken: “(the choice between robots and humans) might depend on what kind of impression brands want to leave on the customer.
If it’s important for your brand to appear forward-thinking and innovative, by all means staff your branches with robot representatives.
But if your brand is one that prides itself on having a human touch, you’ll probably want to give them a miss.”
We don’t live in a binary world of robots vs. humans. Dealerships that get it right in terms of the balance between technology and the human touch will be well prepared for what’s to come.
