The automotive industry's great leap toward digital transformation

The automotive industry's great leap toward digital transformation

28 Eyl 2022

4 dk okuma süresi

The digital transformation of the automotive industry is unprecedented. The digital imperatives that are reshaping the customer experience are highlighted in the Trends in Automotive report.

Salesforce Industries Insights questioned 500 employees from original equipment manufacturers (OEMs), captive finance companies, and retailers globally for the Trends in Automotive research to discover more about the digital imperatives that reshape the customer experience.

The study revealed three significant trends:

Customers want simplified digital purchasing experiences, but businesses struggle to meet the demand. Less than half of OEMs and retailers think their digital storefronts are appealing and mobile-friendly, and the same proportion report issues with online inventory accuracy.

Companies prioritize gathering customer data but find it hard to use it effectively. First-party data, according to 93% of businesses, would significantly enhance the customer experience.

Companies are investing significant money in the research and development of electric vehicles while generating new revenue via partnerships and subscriptions to offset narrower margins. According to 85% of businesses, EV research and development expenses will significantly threaten the sector's revenues during the next five years.

The new automotive shopping experience

More than ever, the vehicle shopping process is now largely digital. The digital experiences provided in other industries, like retail, are built upon by OEMs, captive finance companies, and merchants. The study also shows the digital and virtual post-purchase experience, from managing loans to adding miles to leases to downloading service updates.

According to research, businesses aren't as far ahead in their digital transformations as they would think. According to a study by Salesforce, 73% of businesses believe their digital transformation efforts are succeeding; however, a recent study by McKinsey indicated that physical touchpoints (and unsatisfactory experiences) still dominate the purchasing process.

Customers expect simplified lending processes and price transparency, but businesses are not providing them. Only 27% of captive finance organizations gave their internet tools for financing cars ratings significantly above average. Even worse, only 24% of those polled claim that their website's prices consistently correspond to what clients pay. Given that 74% of consumers believe that open and honest communication is more crucial now than it was before the pandemic, this is an issue.

E-commerce capabilities are being tested by a complicated path to purchase. Less than half of OEMs and retailers think their digital storefronts are interesting and user-friendly on mobile devices. The same number also complains online about issues with inventory accuracy.

Customer data helps build better customer experiences

95% of automobile companies purchase consumer data from third parties to assist marketing campaigns, but businesses are now required to collect data directly from customers as internet privacy laws change. Customers will soon need to expressly consent to disclose first-party data, such as email addresses and cell phone numbers, and zero-party data, such as product preferences and purchase intents. First-party data will significantly enhance the consumer experience, 93% of businesses agreed. Only 46% of businesses claim to have complete data.

Personalization is essential for communication to be timelier and more pertinent. 73% of customers anticipate personalized messages across channels, but only 26% of captive financial companies, OEMs, and merchants can do it.

According to 87% of the CEOs surveyed, this type of marketing increases sales and profit margin. But, according to other data, 78% of OEMs and retailers claim they cannot tailor messaging based on particular accounts or client concerns.

A significant new source of first-party data is provided by connected automobiles that connect to other objects or services over the internet. To enhance the customer experience, first-party data from connected automobiles is being heavily invested in by 50% of the organizations polled, according to the report.

Pursuing new revenue opportunities

The automobile sector is increasing its investment in electric vehicles. Today's entry-level electric cars (EVs) are frequently used as OEM loss leaders because versions priced for profit are typically out of reach for many consumers. Environmental laws are also encouraging OEMs to make significant investments in EVs. The bottom lines of North American and European businesses may suffer as they drive customers to ecologically friendly transportation: 85% of respondents believed that the EV research and development costs would pose a significant threat to the sector's revenues during the next five years.

OEMs have access to new revenue streams through partnerships and subscriptions. Companies are looking to partnerships and subscriptions as revenue generators as they strive to provide dependable, safe, and economical EVs: 62% of retailers and 68% of OEMs have already invested in Internet of Things (IoT) applications like Apple CarPlay and smart home gadgets. Additionally, captive finance businesses are looking into novel concepts, including letting clients acquire use-based insurance policies, streamlining the online purchase of additional leasing miles, and combining financing and maintenance into a single payment for commercial buyers.

The prospect of EV income is highlighted in the report on the automotive industry: "As EV adoption grows globally, the pressure is on companies to solve concerns related to vehicle affordability, charging station availability and compatibility, and the harmful environmental impact caused by mining battery minerals. As companies in the industry adapt to the new incentives promised by the Inflation Reduction Act, some out-of-sector businesses are already jumping on a new growth opportunity."

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