The shift to internet retail by vehicle manufacturers is a major development that places new demands on their ability to convert website visits into sales.
The trend for manufacturers to sell cars to the public online started with BMW back in 2015 but accelerated through the pandemic. PSA and Daimler entered the fray last year, for example, along with VW for the ID.3.
This move to online retail requires a new ability to understand customers and their preferences and react in real time with maximum effect when they are on a website. This a capability that currently eludes many manufacturers. Yet as vehicle-makers also become vehicle-sellers, they need new tools such as real-time customer segmentation, interaction and personalisation capabilities. These are solutions that provide virtual salespeople who move consumers towards purchase but as comfortably and smoothly as possible.
Advances in this field of technology, which is driven by AI, have also come just at the right moment for automakers. The big browser companies, including Google (which has 60 per cent of the market) are ending third-party cookies. This chokes off the data that has fuelled online consumer personalisation and insight for years. It will no longer be possible for an automaker to profile individual consumers by using third-party cookies to track their activity across the rest of the internet after a website visit. Apple and Firefox have already pulled the plug on third-party cookies and Google will follow suit next year. All have acted out of privacy concerns generated by data legislation such as the EU GDPR (General Data Protection Regulation).
But to the same extent that battery technology has changed the automotive market, the advent of easily-implemented real-time segmentation and behavioural tracking technology gives OEMs all the insight they need to achieve personalisation and provide customers with a more seamless experience that moves them towards a purchase.
There are, of course, so many elements of a vehicle purchase that the consumer can personalise, which is why it is important for manufacturers to use technology to understand website visitors as quickly and comprehensively as possible.
For example, most automotive manufacturers have website tools that allow consumers to customise their preferred model, selecting an extensive range of specifications from engine size to colour and details of interior trim. Consumers must also choose how they will finance the purchase and perhaps, how they will trade in or part-exchange their current vehicle.
AI-driven tracking monitors each consumer’s activity in respect of these different elements when they visit an automaker’s website. Such solutions use a first-party cookie to store just the unique ID of the user and are not affected by the third-party cookie ban or privacy restrictions. This first-party cookie remembers each visitor and their visit. As the visitor moves around the website the technology will register the subjects that especially interest them and spot when their behaviour indicates they are close to buying, or, when they are about to leave.
Acting on the technology’s real-time insights, automakers can intervene with a timely recommendation, graphic or notification, increasing the likelihood that a wavering consumer will make a purchase, or at least book a test drive. Any follow-up emails or communications will also be personalised in line with their preferences.
Although buying online is far quicker and is free from haggling, many customers who visit a manufacturer’s website still want to visit a showroom or dealership before they make the final decision. Either way automakers need to use segmentation and behavioural tracking technology to personalise the experience and ensure the potential customer moves along the sales funnel.
An automaker company will see from the metrics how this type of segmentation and interaction technology raises conversion rates, even if customers opt not to buy online. This is because when customers visit dealerships or automakers’ showrooms to go for a test drive, the sales staff assisting them are better informed about their preferences and any possible barriers to completion of the purchase. The customers themselves also have a much clearer idea about what they want, which saves everybody’s time and increases efficiency.
For consumers, a vehicle remains a highly considered purchase. Back in 2015, BMW had seen how almost all car-buyers were conducting online research, which was reducing the number of visits they made to dealers to an average of 1.4 from an average of four less than two decades earlier. We may now have reached another milestone in the development of automotive retail. Much will depend on how well an industry that thrives on innovation uses technology to meet the new demands and expectations of consumers online. Automakers certainly need advanced solutions such as AI-driven behavioural tracking and real-time segmentation technology if they are to fuel increased conversions. Online automotive is an increasingly sophisticated market where consumers have a great deal of choice and need active, personalised guidance.