by caratgmi

Tuesday, 10 June 2014

What automotive brands can learn from retail about customer experience


Ryan Kovalak and Randall Stone
Lippincott

Over the last 100 years, car manufacturers have relied on product innovation to give them market differentiation and competitive advantage. In the past, more efficient engines, better brakes or improved safety features have all helped to create standout. But more recently, the lower cost of increasingly sophisticated automotive technology has levelled the playing field, narrowing the quantifiable differences between vehicles in the same class. This means that automotive brands now have to find new ways of staying ahead of the competition.

Innovate the customer experience

The answer to achieving sustainable differentiation and competitive advantage is to innovate the customer experience. Looking across the entire range of customer touch points, both inside and outside automotive dealerships, there are clear opportunities to generate deeper customer engagement, increased purchase consideration, greater customer satisfaction, increased brand loyalty and new revenue streams.
'Experience thinking' – a fusion of left-brain and right-brain thinking – can help create a vision for the future, reimagining what the customer experience can become and capitalising on opportunities to innovate. Lippincott's 2013 study of more than 500 consumer-facing brands found that market-leading customer experience correlates with market-leading financial returns, with the stock price of experience leaders appreciating an average of 8% more than others between 2007 and 2012.
Innovating the brand experience means looking beyond the dealership, learning from experiences delivered in non-automotive consumer and retail categories and having the courage to develop a vision for the customer experience of the future. Best-in-class global retail such as Apple, McDonalds, Starbucks, Tesco, Uniqlo, Louis Vuitton, and Breitling, are raising the bar with the experiences they offer and, in turn, consumer expectations across all retail categories – including automotive.

Start with the showroom

Unlike other retail environments, the typical automotive showroom has changed little in the past 50 years. Most showroom layouts look much the same today as they did in the 1950s, with nothing but the cars to distinguish a BMW showroom from a Hyundai showroom. Compared to companies like Uniqlo, the mass-market clothing retailer, it's an experience that falls far short today's consumer expectations. From vibrant displays, colour-shifting LED lighting and 'magic mirrors' that allow customers to see the clothes they're trying on in a different colour, to the smiling, eager-to-please store assistants, Uniqlo has successfully differentiated across every customer touch point.
Automotive businesses can learn from the customer experience offered by retailers like Uniqlo to transform the dealership showroom into a rich and stimulating environment that engages all the senses, builds an emotional connection with their brand and drives sales.

Extend the experience across multiple channels

Today's car buyers are better informed and more demanding than ever before. According to a 2012 survey by J.D. Power and Associates, nearly 80% of new vehicle purchasers research on the internet before they buy – one-third use review and comparison sites and many consult social-networking sites to gauge the experience of other shoppers.
Consumers increasingly expect the retail experience to be seamless across channels and devices – mobile, online and in-store. Retailers must therefore give customers control over how they shop, providing access to products and information whenever they need it. Apple, for example, offers one of the widest ranges of options for shopping, enabling customers to buy online and pick up at the store, or use a mobile app to purchase on the move. Tesco is also leading the way in experience innovation, having recently created a virtual shopping aisle in a busy Seoul subway station where commuters can scan and purchase products with their phones for same-day delivery.
This kind of technology-based retail experience is easy to use and fits perfectly into consumers' daily lives. Although automotive companies face structural challenges to operating in a multi-channel environment, they need to focus on increasing customer engagement by embracing new technology and better integrating the experience they offer across all digital and physical platforms.

Create meaningful consistency

Automotive dealers have always recognised the value and importance of brand identity and have typically invested heavily in signage and point-of-purchase materials designed to ensure a consistent look across their network. In other categories, however, some global retailers have recently made surprising design changes that challenge established practices. McDonald's restaurants in Europe, for example, now look completely different to those in North America – where urban and suburban outlets are also designed to have to have their own individual style. Starbucks has adapted a similar strategy, where each cafĂ© is, in part, custom designed.
McDonald's and Starbucks are able to successfully adopt flexible design strategies because of the strength and consistency of the experience they offer across stores globally. Even though the design of the store may change by location, the behaviour of the staff, the defining moments in the purchasing process and the quality of the overall experience remains constant around the world.
For automotive brands, the focus on design consistency across the dealership network needs careful consideration, especially as they expand into new markets where cultural differences and preferences demand a more 'local' approach. While consistency matters, it's how it is embedded in the entire customer experience that's really important, not just the expression of brand identity through the design of the retail environment.

Bring together the true and the new

Lippincott's brand study shows that although consumers see many automotive brands as having a recognisable and authentic brand image, fewer are seen as having the vitality to stay fresh and relevant over time. Automotive companies need to find ways of leveraging their heritage and reputation, at the same time as communicating a dynamic, forward-thinking image that appeals to a new generation of customers.
It's an approach perfectly illustrated by luxury goods retailer, Louis Vuitton. Recognised around the world for their iconic LV monogram and check canvas patterns on luggage and handbags, they recently decided to breathe new life into these signature brand elements and worked with leading contemporary artists to reinvent their patterns. They created a series of bold designs that were applied across scarves, handbags, window displays, pop-up shops and storefronts to leverage the Louis Vuitton brand heritage while presenting the brand in a new and unexpected way.
Industry-leading retailers continuously look to tell their story in new and compelling ways. For automotive companies, this means identifying what makes them special and unique and communicating these messages in fresh and creative ways, combining both the true and the new to stay relevant for consumers.

Recognise that your people embody the brand

Automotive dealers understand the importance of establishing strong personal relationships with customers and their value in attracting and retaining business. In contrast to other retail environments where the store experience is an extension of the brand, the customer experience within an automotive dealership usually reflects the individual dealer's management style and internal culture.
At corporations like Apple, their people truly embody the brand. They're informal, knowledgeable, and friendly – they don't just provide great customer service, they are as distinctive and recognisable as any other dimension of the Apple experience. So, while dealers clearly recognise the importance of people in delivering the customer experience, they don't always acknowledge their role in reinforcing the brand personality. Dealers need educating on the benefits of adopting a common culture across the network where the behaviour of personnel and the way they interact with customers is brand-aligned.

Connect and stay relevant throughout the ownership experience

At key periods throughout the year, many automotive dealers attract prospective customers into the dealership with special offers and events. These promotional activities invariably increase footfall and help to feed the sales pipeline – but once the purchase is made, little is done to retain the customer's interest. Dealers are therefore missing opportunities to stay connected with owners and engaging them throughout the ownership experience.
Swiss watchmaker, Breitling, has addressed this issue by establishing company-owned boutiques in key global cities to anchor the brand experience and provide services that surpass those offered through their normal sales channels and provide a truly immersive brand experience for Breitling watch owners as well as prospective customers. Featuring a lounge area for customers to socialise and relax with a glass of Champagne, the boutiques host exclusive, invitation-only events to keep registered customers up-to-date with the latest developments.
Today's consumers expect to have on-going relationships with the brands they buy, and for automotive businesses this represents an untapped opportunity for creating unique experiences targeted specifically at owners. These experiences should reinforce a brand's values by encouraging engagement at every level.

Make a lasting impression

The leading automotive brands of the future will be those who draw inspiration from best-in-class retailers outside the category and, in turn, innovate their own shopping experience to meet and exceed customer expectations. The world's best retailers have all found ways to innovate the experience for today's demanding and well-informed consumers, creating highly immersive environments designed to connect with all the senses. The commercial potential is significant for the automotive pioneers prepared to follow their lead.

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