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Will Ecommerce Guide the Future to Direct-to-Consumer Sales?

direct-to-consumer sales

Previously, I examined eCommerce functionality in the automotive industry and the benefits of a direct-to-consumer sales model. This blog follows up and discusses how to find a reliable technology partner, functionality aspects, and aspects of this new direct-to-customer sales method.

Finding a technology partner that specializes in digital transformation is key. That doesn’t simply mean finding a partner that can help you build a roadmap and strategic vision, but rather one that has the in-house knowledge to actually implement the tools and technology needed to make it all happen.

For example, building eCommerce functionality involves not only the digital bucket that consumers “drop” their products into, but it also includes accepting the consumer’s payment of choice, delivering information to the payment processor, distributing the information to a dealership, and storing product information for each consumer. The build-out of such a program requires an incredible understanding of the customer journey, processes, and systems.

Consider the Non-Technical Factors of eCommerce

When looking at the non-technical aspects, such as automotive manufacturers’ relationships with the dealerships, there are several sub-factors to consider when implementing eCommerce functionality. This new functionality will cause concern among the dealer base, and it will be up to the OEM to provide a clear role for the dealers to play and show their value. In some cases, the role of the dealer may need to be larger than simply the pickup location.

Going back to the Tesla example, perhaps the reason to visit the dealership changes, and consumers view the dealership as a place to get familiar with the product. This would also most likely change the employee base at the dealerships. Perhaps dealerships start employing fewer sales representatives and more “product experts” or “evangelists.” These dealers may even want the eCommerce functionality where a consumer could purchase online just as they could the OEM site.

ECommerce functionality could impact the service side of the business for dealers, too. Consumers may build their car online and be matched with a dealership that has that exact car, or opt to receive a delivery of that car when it’s built and ready. This may ultimately erode the loyalty and trust that a consumer may have with a particular dealer. Some consumers will want to stick with their trusted dealer, while others will build the exact car they want online and be willing to travel to a different dealership to pick it up. In the process of the pickup, the new dealership may be able to create a relationship with the new customer, enticing that person to bring their vehicle back for maintenance over its lifetime. Dealers have been competing for loyal customers from the beginning, but this change in the consumer process could lead to less dealership loyalty.

The Physical Impact of Direct-to-Consumer Automotive Sales

It’s also worth mentioning that a direct-to-consumer sales approach could impact physical vehicle production and traditional inventory levels. If consumers go online and build the exact car they want, and pay for it online, manufacturers may be able to better control inventory and waste less time and resources on inventory that goes unsold for a longer period of time. On the flip side, this approach would depend on consumers’ willingness to wait weeks or months to get the car they build. Some may be willing; others may not.

Implementing a direct-to-consumer sales strategy and a digital shopping cart could be the next competitive advantage for OEMs and dealers. While it will be exciting to see how much company’s embrace the direct-to-consumer sales approach and the impact it has on everyone in the “food chain,” one thing is for sure. It will be those with the boldest ideas, the strongest determination, and best technology partners that set themselves apart and rise to the top.

To learn more about how eCommerce could affect direct-to-consumer sales models, what factors come into play when deciding to add eCommerce functionality to a website and the impact on auto manufacturers and dealers you can click here or download our perspective below.

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Michael Thomas, Director of Analytics

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