1. SEAMLESS JOURNEYS:
E X C L U S I V E R E P O R T W R I T T E N B Y A U T O M O T I V E I Q
DIGITAL AND PHYSICAL
TOUCHPOINTS IN THE
AUTOMOTIVE
INDUSTRY

2. Introduction
New York-based consultancy Oliver Wyman poses a very pertinent question:
“You’ve innovated the car, now how about the buying experience?” Any
OEM today knows one thing for sure: the selling of automobiles and
automotive accessories are not what they used to be – simple, hierarchical
and linear. In 2016 the World Economic Forum (WEF) stated how, “OEMs,
dealers and customers are dynamically redefining how they interact with
each other, with consumers increasingly expecting a seamless experience
across both digital and physical touchpoints”. All this is due to consumers’
fast-evolving digital expectations and allied demands for new and
innovative services – a task far easier said than done for OEMs.
Digital Leads the Way
Accenture Digital stated that there will be an estimated 50 billion
connected devices worldwide by 2020. No wonder that OEMs are investing
ever-increasingly in digital solutions to sell units and solutions. The
automotive industry is set to increase IT spending from what was $37.9
billion in 2015 to $168.8 billion by 2025 (at a CAGR of 16.1%), as cited by the
WEF. This digital revolution is shaping the consumers of tomorrow. Holger
Masser, the global head of the automotive business unit at SAP, reminds us
that customers today can connect anywhere at any time, with ever-easier
access to online resources and new technology. According to Masser, it is
customers that are the actual drivers of change in industries such as the
automotive industry. As the IBM Institute for Business Value states,
“Consumers are more engaged than ever—they not only want to use cars -
they can be compelled to co-create them”.
Consulting group Capgemini released a survey The Selfie Experience - Cars
Online 2015 in which 7,553 consumers in Brazil, China, France, Germany,
India, UK and U.S. participated, most of whom were planning to buy or
lease a car in the next 12 months.
The survey found that the preferred balance between physical and digital
touchpoints varied greatly with regard to culture, age and car-owning
experience. In general, the younger generation (18-34 years) has a stronger
affinity than older customers with the web and the online world generally,
as expected of ‘Generation Connected’. Satisfaction is not enough for

3. for those surveyed. Strong feelings of loyalty towards a manufacturer or
dealer would be required at repurchase time, i.e. 87% of very satisfied
customers would purchase the same brand again, and 85% would buy from
the same dealer. Most evident in the survey is that customers want to be in
the foreground of their own ‘selfie,’ i.e. they expect individualization,
flexibility and ongoing communication with OEMs.
But it’s not just about digital needs driving changes in sales and innovation.
It goes further for OEMs and the all=pervasive digital revolution, as cited in
2016 by the WEF. The WEF found that the development of a “data economy”
would be particularly transformative for the automotive industry, which it
cites as being one of the most data generation-intensive industries in the
world (in fact, second only to the utilities industry). The WEF estimates that
data exchanges could create $36 billion of operating profits for OEMs from
jointly run data exchanges operated at scale. Benefits will probably be
derived principally through third-party monetization and the reduced cost
of data acquisition for OEMs who contribute to the data exchange.
The Physical Remains
Darshan Shankavaram of Capgemini found that, “With the majority of
customers still demanding physical contact with dealers, automotive
companies will need to carefully balance the digital with the physical if they
want to stay ahead of the competition”. The Capgemini survey detailed
above did find that customers still want to physically see the product, and
have personalized contact, before making a decision. However, a visitor to
a dealer showroom today has typically done up to several months’ research
already – so the need is for a product expert rather than a salesperson.
What is needed is the soft sell, not the hard sell. Interestingly, former deputy
head at eConsultancy, Christopher Ratcliff, noted how an eConsultancy
survey of almost 2,000 digital marketers and ecommerce professionals,
titled Understanding the Customer Journey, found that it was offline
channels that have become key battlegrounds in winning (and keeping)
customers.

4. But automotive expert Arthur D. Little does caution that the traditional
dealership is losing relevance. The consultancy is of the opinion that what
are emerging instead are new semi-stationary formats that still retain the
‘physical’ aspect of the purchase process. The retail presence has to move
offsite whereby retailers meet customers in non-traditional interaction
spaces, e.g. places that customers may visit in their spare time. Dealerships
need to evolve, making physical spaces more digital: the WEF cites an Audi
virtual showroom in London as an example. The showroom has only four
physical cars on display. Enormous video screens show customers all the
specifications for their chosen model. The experience includes authentic
sound effects, the opening of doors and a 360° look inside. Audi is also
piloting a wearable virtual reality device that gives car buyers a truly
interactive experience with a new model. Automotive marketing guru Owen
Gill commented on how Volvo teamed up with Google Cardboard to allow
customers to preview models from anywhere.
Nor are these only the demands of mature, richer markets. Researchers
Rajan et al. surveyed 1,551 Indian customers who had purchased a vehicle
within the prior twelve months, as well as 87 dealers and conversations with
top management teams from various automakers. One of their principal
conclusions was with regard to physical sales spaces and what they dub
“the dealership of the future” in which automakers must convert dealerships
into “brand experience centres”. Customers need to encounter
differentiated retail formats with innovative virtual-physical layouts, the
authors contended.

5. All (Seamless) Roads are Omnichannel
Customers can potentially interact with companies through many channels,
be it online, via mobile and tablet applications, via email, by engaging in
online chat, at kiosks, and by speaking with customer representatives at
physical locations or telephonically. The potential for interaction by a
customer with a brand is immense – but so too is the potential for a
breakdown in said interaction. That is why it is important to heed the advice
of Kim Flaherty of the Nielsen Norman Group, who reminds us that, “When
users engage with an organization through a specific channel, they see it
as one of the many interactions that make up their overall user experience
with the company.” Fluff up any channel and see the interaction (and
goodwill) disappear.
Enter omnichannel. To strive for a seamless customer experience across all
digital and physical touchpoints is to be committed to an omnichannel
approach. Kim Flaherty states it well: “Seamlessness is a quality of any
crosschannel customer journey where the transitions (or handoffs) from one
channel to the next involve zero or minimal overhead for the users. Basically,
if you can pick up where you left off, the user experience will be seamless.”
However, new channels have sprung up in recent years, often added
incrementally and on an ad-hoc basis. This has created a fragmented
backend infrastructure for many organizations, which invariably lead to
roadblocks for customers and users.
Roadblocks or problematic transitions between channels are anathema to
seamlessness. Therefore, the switch between digital and physical
information channels need to be seamless - at all times. And the
experience needs to be personal. Capgemini cites the example of a
customer who uses an online configurator and then later visits a dealer with
the expectation that the salesperson will already know their specific needs
due to the inputs made online into the configurator. Seamlessness means
closely integrated physical and digital channels, demanding streamlined
back-end systems such as customer relationship management (CRM),
analytics (Big Data) and cloud computing (SMAC).

6. All In This Together
The automotive ecosystem is clearly changing rapidly and this too will
shape how OEMs attempt to win over customers in both the digital and
physical realms. One hard reality is that of competition from OEMs once
considered ‘unorthodox,’ i.e. more than 1700 new digital start-ups are
expected to disrupt the automotive industry supply chain by 2025, as per
Frost & Sullivan (WEF) – not to mention the likes of IT juggernauts Google
and Apple entering the fray. The upside of all this usurpation of the
automotive status quo is that digitization, for example, will decentralize
both production and the supply chain. In addition to lowering costs, this will
accelerate supply chain transparency through continued partner system
integration downstream.
E&Y [Ernst & Young…it’s common to refer to the company only as E&Y, or
even EY] reckons that this transformation will be immense in retail terms
since it “will not only require a concerted effort from both automakers and
dealers, but will also demand an unprecedented level of collaboration with
other stakeholders in the ecosystem, particularly insurance companies, auto
finance and aftersales market participants.” The automotive industry will
become far more adaptive, leaner – and smarter.
Conclusion
The consultancy Arthur D Little observes how customers experience three
main elements when buying a car: the vehicle itself (the tangible), the
brand itself (the aspirational), and the overall experience of buying the
vehicle and the ownership thereof (the transformative). That is why the
customer’s experience with all touchpoints throughout this relationship is
crucial. However, the balance between digital and physical touchpoints for
automotive customers remains fluid and evolving. Capgemini cautions that
it “will be a while longer before the industry is a seamless mix of bricks and
clicks”. An E&Y survey found that 31% of C-suite executives in the
automotive industry consider delivering seamless digital/ in-store
experiences, as well as leveraging online resources to influence choice, as
being critical to winning and retaining customers. That number is frankly
astounding: how can the remaining 69% of executives surveyed believe any
differently? This is indicative of an automotive leadership that remains far
too orthodox in its understanding of how vehicle will get sold. The
proverbial wake-up call is not only needed by all those at the top - a rapidly
changing market absolutely demands it.

7. References
Accenture Digital. Seamless Omnichannel experience. https://www.accenture.com/t00010101T000000__w__/it-
it/_acnmedia/PDF-23/Accenture-B2B-B2C-B2B2C.pdf [Retrieved on October 30 2017]
Arthur D. Little. Automotive Customer Experience: Achieving Next Level Customer Service by Managing Customer Experiences
Across All Touchpoints. http://www.adlittle.com/downloads/tx_adlreports/AMG_2013_CEx.pdf [Retrieved on October 30
2017]
Capgemini. The Selfie Experience: The evolving behavior of the connected customer. https://www.capgemini.com/wp-
content/uploads/2017/07/cars_online_2015_0.pdf [Retrieved on October 30 2017]
Ernst & Young. Future of automotive retail: Shifting from transactional to customer-centric.
http://www.ey.com/Publication/vwLUAssets/EY-future-of-automotive-retail/$File/EY-future-of-automotive-retail.pdf
[Retrieved on October 30 2017]
Flaherty, Kim. Seamlessness in the Omnichannel User Experience. https://www.nngroup.com/articles/seamless-cross-
channel/ [Retrieved on October 30 2017]
Gill, Owen. Digital Marketing in the Automotive Industry. https://www.hallaminternet.com/digital-marketing-automotive/
[Retrieved on October 31 2017]
IBM Institute for Business Value. Automotive 2025: Industry without borders.
file:///C:/Users/Vittorio%20Bollo/Desktop/Digital%20Enterprise%20in%20the%20Automotive%20Industry%20article/GBE03
640USEN.pdf [Retrieved on October 31 2017]
Masser, Holger. Digital Disruption Drives New Business For Auto Industry. http://www.digitalistmag.com/digital-supply-
networks/2016/06/14/digital-disruption-drives-new-business-for-auto-industry-04264565 [Retrieved on October 31 2017]
Oliver Wyman. The Automotive Retail Experience of the Future. http://www.oliverwyman.com/our-
expertise/insights/2015/jul/automotive-manager-2015/customer/the-automotive-retail-experience-of-the-future.html
[Retrieved on October 31 2017]
Rajan, Srivatsan, Bhattacharya, Joydeep, Mandviwala Yaquta and Jain, Deepak. Changing Gears 2020: How Digital is
Transforming the Face of the Automotive Industry. http://www.bain.com/publications/articles/changing-gears-2020.aspx.
[Retrieved on October 31 2017]
Ratcliff, Christopher. Customer journey tracking: joining up digital and offline touchpoints.
https://econsultancy.com/blog/66354-customer-journey-tracking-joining-up-digital-and-offline-touchpoints/ [Retrieved on
October 31 2017]
Shankavaram, Darshan. The balance of Digital v/s Physical: Is the Auto industry unique?
https://www.capgemini.com/2015/09/the-balance-of-digital-vs-physical-is-the-auto-industry-unique/# [Retrieved on
October 31 2017]
World Economic Forum. Building a digital automotive industry. http://reports.weforum.org/digital-transformation/building-a-
digital-automotive-industry/ [Retrieved on October 30 2017]
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