15 January, 2021
With San Francisco’s annual International Auto Show shelved due to pandemic concerns, a very public illustration of private industry concerns was laid bare to everyday consumers for whom a decades-long holiday tradition had been cancelled. Unfortunately, when it comes to partaking in seasonal cornerstones or even routine daily affairs, Americans have had to make some adjustments as of late. Minor grievances aside, businesses across the United States are fighting for their very survival, and by this point most realize that simply cutting expenses and riding out the crisis does not a business plan make. To hold fast, companies must get proactive and understand that the culture of convenience is now king. The changes we’ve reluctantly become accustomed may or may not be here to stay, but the digital investments made to counter today’s economic slump will be crucial to long-term salvation.
Already comfortable with online commerce from decades of normalization, consumers are pleased with the automotive industry’s newfound love of convenience. J.D. Power found that “43% of car buyers tell us that they are willing to complete the entire purchase process online—without ever visiting the dealership”. Enthusiasts, too, have relished the new and specialized parts catalogs made available online, in turn boosting digital channels sales to record levels as they prepared their garaged beauties for the next time tires would hit asphalt. Leveraging e-commerce for car parts is not solely the purview of diehards, though, with joe average and scores of DIY buyers opting for the same experience. It appears that automotive consumers of all stripes have tasted the ease of online shopping, and it is sweet.
For those whose passion is strong but mechanical skills weak, new entrants eager to capitalize on rolling lockdowns and socially-distanced retail experiences will come directly to them to get their hands greasy. The days of “night-owl” key drop boxes are long past – the auto shop now comes to your driveway, giving “home delivery” an entirely new meaning in the process. And business is booming. One mobile mechanic provider, Seattle-based Wrench, has seen a “300% year-over-year increase in revenue for its repair business” from the onset of pandemic. Similarly, YourMechanic recently reported “twice the number of its usual bookings after sending out emails announcing a no-contact car repair service”.
The initial pandemic scare resulted in consumers clutching their wallets close to chest, subsequently boosting mobile repair services for those seeking to save capital by maintaining their current ride versus buying new. However, the pendulum will eventually swing back as dealerships solidify COVID-friendly procedures, perfect the contactless experience, and consumers regain confidence. Luckily, the Automotive industry has the raw material necessary to drive radical innovation in our data-driven economy; Internet-enabled cars and a mobile-savvy consumer base provide all the information necessary to capitalize on our “new normal”. The only piece missing for large-scale implementation and adoption is a platform to run it all. BMW is off to a solid start by launching its data hub collaboration with Amazon’s Cloud Computing division, created to give the German mark a heads up to possible supplier issues and sourcing problems. But quickly identifying internal processes ripe for efficiency is just the tip of the iceberg.
Depending on the make, some vehicles can accept wireless software updates that can make them better than they were when purchased. “Today, most automaker’s OTA updates improve a vehicle’s infotainment system (maps, Apple CarPlay, Bluetooth compatibility), which, in our view, does not add material value to a vehicle. On the other hand, Tesla’s OTA updates improve infotainment systems, along with range, autonomy features, braking/acceleration functions, and safety systems.” With features such as these, it’s easy to see how the industry will soon move towards adopting software-hardware like margins. And while it’s true that legacy OEMs currently trail Tesla with in-car technology, it won’t be the case for long.
Just as vehicles and technology have continued to coalesce, Silicon Valley is now lending its expertise to automotive manufacturers. Contrary to the likes of Tesla or digital vehicle retailers such as Carvana, OEMs and dealership groups benefit from decades of brand identity and superior geographic reach, which could form a powerful symbiosis when paired with digital providers. As one such innovator, SHIFTMobility’s end-to-end secure auto retailing and service aggregation platform brings together OEMs, Dealers, Customers, and supply chain entities to digitally transform the user experience of purchasing and selling vehicles, parts, services, and accessories. If you’re ready to explore the only digital ecosystem designed to power our connected future contact us.