1.1 Introduction

With the rate at which the business environment and practices are dynamically changing due to changes in technology as well as the standard of lifestyle also selling activities have evolved from traditional to modern methods. Selling and marketing strategy has also changed to satisfy the needs of the modern consumer. In the automotive industry, consumer needs are ever-changing and there is a high expectation from the industry. Today’s customer is being inspired and also influenced by the online services offered from other industry and the same or more is expected in the car industry. This expectation on e-commerce is not only focusing on the product quality but also to how well a product is marketed and aftersales services given by the industry.

E-commerce has completely altered the way business and industry conducted their activities in the past especially conducting online marketing and sales activities through engaging online customers. Apparently, the change is been seen in many industries where the attention to quality products has improved and drifted to customer-centricity (Konrad, 2019).  Many industries are drawing their attention to customers with the aim of knowing customer behavioral change and adaptation in terms of taste and preferences toward technological change. The automotive retail industry also has not been left behind; they have embraced the new technology trends in engaging with customers and conducting a sale.

In this research proposal, we will focus on different topics pertaining to online sales in the automotive retail industry through secondary and primary data and survey in various automotive retail industries. Our main theme aims at identifying the futuristic approach in the automotive retail industry by identifying the new approach in marketing and online selling strategies. The study focuses on understanding whether the automotive industry is well prepared when it comes to targeting the online market.

1.2 Statement of the problem

Managing sales is not an easy process and involves continuous activities of winning customer’s trust. It requires a strategic plan in order to gain customer trust and customer retention as well as achieving optimal sales. Most particularly in automotive retail, the dealers are required to be more convincing in terms of information about the car on sale in order to win the customer. Hence, with the increased information to the customer through social handles, there is a need for automotive retailers to review their business model in terms of marketing and purchasing methods. For the automotive retailer to satisfy the coming generation of consumers there is a requirement to improve sales operation into digitalization.

1.3 Aims and Objectives of the study

This research aims at exploring the automotive retail industry and techniques that are embraced in preparation for the future turnover in the industry particularly focusing on online selling and marketing strategies. The main aim is to examine the future of automotive retail, particularly on online selling. Therefore, from this identification of our research aim the following research objectives are formulated below;

1. To critically assess the drivers of modern automotive customer’s satisfaction
2. To examine the new approach strategy in automotive marketing- characteristic of online sales in the dynamic market
3. To assess whether the automotive retail is ready for the change and still achieve success in sales
4. To examine the challenges of engaging in online sales as compared to the traditional method of selling.

In order to explore and attain the above research objectives, few questions have clearly arisen;

1.4 Research hypothesis

1. What are drivers in satisfying modern customer?
2. What is the new approach strategy in automotive marketing- characteristic of online sales in the dynamic market?
3. Is the automotive retail ready for the change and still achieve success in sales?
4. What are the challenges of engaging in online sales as compared to the traditional method of selling?

2.0 Theoretical framework

This section is will contain the theoretical framework of this research it will explain deeply the topic of our study. This section covers the characteristics of modern customer (automotive customer), new approaches in automotive retail in online marketing and selling. Also, we shall further try to research how well prepared is the automotive retailers in the online platform as well as the challenges associated with digitalization in the automotive retail sector. The research will be carried out by more digging into Toyota Motor Corporation as one of the automotive retail industry. The theoretic part will contain secondary information as well as primary data from an interview from Toyota Motors.

2.1 Drivers of satisfying modern customer

The modern consumer wants things done at their comfort and with the increased hyper-competition in the market; every industry is striving to win the most customers. A survey conducted (Sengupta, 2018) has shown that in the coming years’ consumers will be tech-savvy with every activity being done using technology. Most consumers are highly informed about a product or service even before engaging with the marketer. Through social media customer access information and responses from others who have previously purchased the product. The use of social media was recorded to be two and half hours in a day by 2017, while in 2016 it was two hours in a day and in 2012 it was recorded to be one and half hours in a day (Statista 2018a).

The modern customer is highly informed and accessing information is easy without requiring the marketer. Moreover, this customer wants instant negotiation processes, a variety of items with a fixed price in order to make a choice. Thus, the automotive retailer is required to be where the customer is. According to KMPG report, about 58% of car buyer feels online purchasing as convenient as easily accessible while about 40% of the customers hate cumbersome price negotiation and their preference goes with online purchasing which is open and direct with no checkout lines or crowding.

In the automotive retail industry, traditional methods of selling have been overrated and hence the need to have modern strategy in selling. In one of the conducted research, most dealers have proved that traditional sales need improvement since they have identified that most customers are not satisfied and are going for an industry that is in e-commerce. The survey (Stanowska, 2018) identified that a satisfied customer most reported is the one who purchased their products online. Thus, the automotive industry needs to digitalize their products with fixed and transparent prices. Therefore, if the automotive retail is planning to achieve sales in the future they need to modernize their activities starting from the manufacturing and in the dealership process. Hence, there is a need for having strategic marketing and sales that capture and satisfy the modern customer.

2.2 New approach in automotive sales and marketing

Due to the emerging mobility need and concept, the automotive retail has evolved from one step to the other and also embracing new strategies to satisfy their customers as well as boosting sales. The automotive retail has integrated the Omni-channel strategy (Koroth, Mazurek, & Pater, 2019) which is aiding them to target a large market in a converged manner through the use of divergent media.

The Omni-channel strategy involves the digitization of marketing strategies through video marketing on YouTube, Instagram, creating an automotive App, google ads, Bing shopping and opening online stores. The automotive retail is focusing on creating a buyer-seller engagement online experience. The use of the Omnichannel strategy focuses on gaining customer loyalty by automotive retail becoming customer-centric. The automotive retail industry is embracing the use of (AR) that is the augmented reality or use of Virtual Reality (VR) and Mixed Reality (MA) which is more convenient and real as identified by Stanowska, (2018). Through VR demos retailers can offer car buy test drive at the convenient of the customer without physical contact.

Most customers are not interested in purchasing a car just for the driving experience but further want to experience new brands of vehicles as well as good aftersales services. Thus, the automotive retail industry has created mobility services and there is regular training on the sales team about having aftersales competence and skills. Aftersales services involve offering clients multiple choices in terms of car repair and servicing. Through digital customer engagement, automotive retail is able to reach the customer and respond to their inquiries. Digitalization includes doing online marketing of the vehicles on sale providing details on the car features and prices (Stanowska, 2018). Automotive retail on the online platform it’s relatively comfortable, saves time and orders are delivered instantly where there are different car brand choices. This is because according to the survey conducted (Plapper, Oberhausen & Minoufekr, 2018) about 95% of the car customers spent the most time doing online research before buying a car thus; there are easier checks and comparisons through online platforms. Moreover from a conducted research, about 70% of car buyers will be more convinced to buy the car after watching a video from social media such as YouTube. Thus, mobile stores among other social media tools are great platforms where automotive retail are using to market their products and engaging in sales.

Thus, in the near future, there will be radical digitalization of automotive services and sales whereby; customers will order for car online as well as booking for car services online or home-delivery services. Secondly, there will be the concept of direct sales from the manufacturer to the consumer which will increase customer connection to the industry due to the exchange of personal information in the time of purchase. Overall it’s evident that online car buying will gain its significant in the coming generation of customers. Automotive retails have employed qualified personnel with social selling skills as well as digital marketing techniques.

2.3 Is automotive retail prepared in doing online sales yet

Change does not always come easily and in most occasion change is associated with extra cost coming in handy. However, if the change will bring future benefits on the table it will be wise considering it. Thus, the automotive retail industry must be readily prepared in changing from traditional selling to online selling. Toyota and ford we have seen them approaching Omni-channel strategy in marketing and conducting an online sale. More is being expected from this industry since everyone is going digital. According to (Khan & Kumar, 2019), Indian Automotive Manufacturers (SIAM), has gained $74 billion and by 2026, there is a higher expectation in the industry in achieving a sale of $300 billion. This shows the readiness in which the automotive is prepared in making more sales by going in the online channels.

2.4 Pros and Cons of online marketing and selling in automotive retail

Just as every industry is faced with some challenges also the automotive retail industry has faced a few problems when it comes to online marketing and selling. These challenges are not only experienced by the dealers only but customers have raised some complains this makes it hard to transform from traditional car dealership to online dealership (Sengupta, 2018). Firstly, on an online platform no test drive can be done hence customers may feel not satisfied since they can’t sit in the car. Secondly, online retailing makes the dealer sell a car at a lower cost as compared to when the deal was done traditionally. Thirdly, the price offered online is a bit low compared to the price if the buyer was at the location. Also, online sales the dealer will be soon be eliminated due to direct sale from manufacturer to car buyer (Stanowska, 2018). Moreover, on the online platform, third parties can offer misleading information to buyers thus; there is low trust and confidence when purchasing the car.

However, though noted a few cons of online selling the benefits outweigh them, online selling and marketing have been noted to boost sales as noted by Stanowska, (2018) in the automotive retail industry; since most customers are on social media searching for products. According to Khan & Kumar (2019), 84% of the automobile customers are socially active on YouTube and Facebook and there were 66% of the car owners/buyers responses on Facebook automotive ads. Online selling enables automotive retailers to identify the motivators of car buyers and they are able to improve on brand and prize of the car. Online marketing and selling boost sales due to referrals from different purchasers who post the positive features of the car, as identified by Sengupta (2018), 84% of car purchasers are as results of recommendation by online users.

 

3.0 Research methodology

3.1 Introduction

This research paper will use a qualitative method in data collection by using primary and secondary data whereby; the primary-data collection will involve conducting an interview from five different automotive retail industries here in town. Secondary data, on the other hand, will involve information derived from journals, books, articles, and reviews in order to support the primary data and is the basis of our literature review. Also, the study will conduct experiential research which will be done through visiting websites of four or five automotive retail industries such as AdSyndicate in India Automotive industry.  Data evaluation will be done parallel with the interview in order to achieve the correct and actual data.

Also, this research will conduct a self-survey on the online platform by posting a research question on Facebook as one of the online channels. The question will intend to know whether car buyers feel to prefer online purchasing or traditional methods of buying. The interview questions will be based on face to face questions written down in foolscap having the same question for all the interviewed automotive retail industry. This interview will be used to collect primary data from different automotive retail industry for the purpose of understanding how the industry uses online selling and marketing to drive sales and create awareness of their different brands as follows;

Subject: The use of online channels to market and sell cars in the automotive retail industry

General questions

1. How much profit do you receive from online sales?
2. What is the percentage of your selling and marketing strategies is online?
3. Why did you decide to do online marketing and selling cars online and which online platform is the most favorable?
4. during online selling in the digital arena what are the barriers that car buyers avoid in the buying process or the research review?
5. Do you follow clients who post their requests and inquiries and how do you do it?
6. Do your online clients have knowledge of your products in terms of brand and price? How do you know whether the client has the understanding?
7. Do you see digitalization in the automotive retail industry as a strategy for improving sales in the near future?
8. How have Virtual Reality and Augmented Reality techniques helped in driving sales? Can you compare the test drive for AR experience with that of the showroom?
9. Have you been able to capture the attention of all your customers through the online strategy of marketing? If so, how do you measure it?
10. since many cars are similar in terms of designs and engines are you able to show your customers your unique factor on the online platform? What is unique in the way you communicate your value?
11. Does online marketing enable you to differentiate your brands from brands in other automotive retail industries?
12. when you compare traditional methods of selling and online method are you able to convince a new car purchaser in choosing your brands over others?
13. can you say online marketing has more benefits in comparison to traditional marketing?
14. If yes, how?
15. If no, why?
16. Does the online channel help you connect and understand your customer behavior and preferences better?
17. Has online marketing improved your relationship with the customer? Has it made?

your job easier? How? In how far?

17. Do you see the automotive industry flourishing in the coming years given the high rate in mobility factor?
18. Do you compare your online prices, brands and other features with that of your competitors? If so do you have a wide range in differentiation factor?
19. What trends do you see coming?
20. What techniques or channel would you like to include in the future online sales and marketing strategies?

This raw data will be then compared and contrasted and data analysis, as well as insights, will be done. The sample of this study will be carefully selected and it will be smaller in size in order to allow time for thorough research. The interviews in this study will be carried out directly at the offices of every automotive dealership’s location. The study will include sales representatives, marketing head managers. In order to reach and book an appointment with the interviewee, we will use phone calls and email to agree on the meeting day.

3.2 Validity and reliability

The use of interviews and observations conducted from customers and automotive retailer is much reliable and valid. There will be repeated observation and queries to achieve valid information.

4.0 Data analysis presentation and discussion

This research paper gathered raw data from five different automotive retail industries here in town where we involve sales and marketing teams as well as industry managers. The interviewee was very devoted to giving more information on how digitalization has brought revolution in the automotive retail industry. One of the sale representatives showed practically how the selling process had revolved and made easier by conducting one sale online for their uploaded online cars using their Car App.

As projected from the interview in the various automotive retail industries there have been increased revenues through online selling in the industry. Most of the automotive retailers in the US will continue using digital marketing and selling techniques as these strategies have boosted and doubled sales with an expectation of $12 billion in 2019 which is a 16% increase from 2018 sales amount as indicated in Appendix 3. The five automotive industry reported that they progressed to online marketing after identify that almost consumers are on online search for products this represents 75% of the automotive industries that are on online platforms to do marketing and to boost sales. During the interview, the respondent identified that almost 90% of the online customer didn’t want complicated negotiation but rather fixed price and dates in time of car purchase. The survey identified that most customers about 65% will purchase the car due to the low price without considering the price.

The survey identified that most automotive retail industry has Car shopping Apps that keep their clients on check. This involves the regular update of their new brands and prices as well as replying to customers’ responses.  Also, the research identified that the marketing team were well trained and equipped on online advertisement on a brand which helped the different automotive industry attain competitive advantage in the competitive market. One of the interviewees recorded that almost 90% of their clients preferred Augmented Reality test drive compared to showroom test drive and this promotes an increase in sales by 20%. All the five samples used identified that the future of driving and boosting high sales in the automotive industry will in the near future entirely depend on the online market which means 100% of the automotive retail industry by 2026 will be conducting marketing and selling entirely on online platforms.

From the interviewed questions survey it was noted that all the five automotive retail industries embraced online selling strategies since there was increased sales year after year see Appendix 3. However, the study identified that there was room for improvement by the automotive industry in the transformation from traditional methods to digitization marketing and selling. The study noted that 60% of the automotive retail industry has recorded decreasing sales since they are still in traditional methods of marketing. Moreover, from the conducted interview the study identifies that due to the sharing of cars there arises threats in the retailing industry where the next generation will buy fewer cars with increased car sharing. Therefore, to eliminate this threat the survey analyzed that most automotive industries are investing in new innovation and doing online adverts. Moreover, the automotive retail industry is planning to improve on aftersales services such as home delivery car services and online booking of car services.

5.0 Summary of the finding and conclusion

 

The automotive retail industry is undergoing significant disruption which is resulting in the paradigm shift, from Omnichannel to having digitalized dealers and Uberized services. Within the next 20 years, the automotive ecosystem is seen to be completely transformed. This research identified that revenues are driven by online marketing most especially by creating brand awareness. Most of the car buyers are online users hence; the study concludes that one of the big markets in the automotive retail industry is the online market. (Shoeb & Maqbool 2017) The future of the automotive retail sector relies on an online channel to boost sales and achieve increased returns as seen in Appendix 3. Online marketing strategies will continue to improve with the increasing trends in technology.

Most dealers are accessing and creating a new online channel in order to reach a large multitude of people. Amazon has been on the lead in marketing and selling automotive products. Almost every country starting from Japan, US, China, Australia, Canada, and Mexico among others has invented new strategies on online marketing and also conducting sales. As stated by Khan and Kumar (2019), by 2026 online marketing and selling will record significant sales of $300 billion as predicted in India automotive retail industry. The future of the automotive industry is bright and there is still more improvement expected in the sector. The study identifies soon there will be no middlemen and dealers in the car buying process since the manufacturer will be in direct contact with the consumer.

Automotive retail industries are realizing that sales are made by a continuous process of engaging customers even after a sale. Customer centricity has been the main objective goal in many organizations thus; the organization is following customers’ tastes and preferences and focusing on satisfying them in return high sales are achieved. The paradigms shift in selling and marketing cycle from being a multi-channel retailing to becoming Omni-channel retailing is expected in shifting further in coming years (Koroth, Mazurek & Pater, 2019) to a world where services and products are within the reach of the customer any time of the day and at any geographical location. Therefore, the automotive retail industry is being challenged to represents the organizational need and disruption in technology trends as described by Sengupta, (2018). There is a high expectation of service and quality product delivery which calls for well-trained workers, new innovation developing new business strategies after every time. This transformational will act as a foundation in the automotive retail industry where many consumers are looking forward to seeing the digitalization in this sector just as many organization has shifted.

5.1 Recommendation

The first recommendation is that automotive retailers should carry out frequent research on new trends in technology and also in the consumer change of need. The industry should have their focus on digital marketing strategies as we have identified that most customers are on online platforms. The sales team should be equipped with technology skills through training in online marketing strategies. This can be done by involving the sales team in the new formulation of business models in marketing and selling automotive products. After identifying that online platform offers the automotive retailers a big market more research on online tool need to be conducted in order to reach out to this market.

The second recommendation should be the total integration of formulated business models at the first stage of the manufacture of the car. The online marketing should start from car manufacturer to the final stage of selling. This is done by involving all stakeholders in the automotive retail industry. This should include updating the customer on the new brand and intended innovation in the industry to prepare the consumer mind in the process of purchasing. Thus, if customers are psychologically prepared for new products definitely there will be a notable increase in sales.

 

 

 

References

Khan, M. T., & Kumar, N. (2019). Technology Entrepreneurship Capability Development in Indian Automotive Industry. In Advances in Interdisciplinary Engineering (pp. 561-567). Springer, Singapore.

Konrad, A. (2019). Customer retail Experience as a new approach for creating dealership sales loyalty in the automotive industry. Proceedings of The 14th IAC 2019, 240.

Koroth, A. K., Mazurek, G., & Pater, P. (2019). Disruptive Innovation in Automotive Retailing. Journal of Management and Business Administration. Central Europe, 27(1), 44-59.

Sengupta, J. (2018). The use of digital marketing in the Swiss automotive retail industry (Doctoral dissertation, Haute école de gestion de Genève).

Shoeb A, Maqbool A (2017) Growth of indian automobile industry. Int J Emerging Res Manage Technol 6(5):26–29

Stanowska, N. (2018). An investigation into the development of Toyota’s e-commerce customer journey. Journal of Undergraduate Research at NTU, 1(1), 146-181.