Automotive Ecommerce: How To Sell Cars and Services Online
Automotive Ecommerce: How To Sell Cars and Services Online
eCOMMERCE
HOW TO SELL CARS AND SERVICES ONLINE
EXECUTIVE SUMMARY
• The automotive industry is being • Designing a new experience starts • To build a user-friendly and sus-
disrupted by several global trends. with a deep understanding of tainable experience the right
One of them is the appearance of customers’ wants and needs as eCommerce platform approach
eCommerce channels, dominated well as the consideration of their needs to be chosen, supported
and shaped by third party players changing lifestyles and consump- by the appropriate cloud service
from outside the industry tion of mobility services model for the necessary agility
Conclusion 12
1
2
ECOMMERCE M AKE S CUS TOMER
JOURNE YS MORE COMPLE X
For a long time, car dealerships acted configuring it to one’s taste can be other industries. Figure 1 sums up
as the central place for buying cars, overwhelmingly complex, making the some of the most important findings
parts and services. Recently, however, decision even harder. So far, consum- of our research. Particularly impor-
the point of sale diversified, shifting ers only had to pick and choose rather tant for automotive companies will be
more parts of the customer journey technical aspects of a car, that could the seamless channel integration: for
into the digital sphere. Initial solutions be laid out in a matrix of options. products as complex as cars, custom-
for end-to-end online sales processes Nowadays, people more and more ers simply expect to be able to change
already exist in some markets, where choose which products they let into between the physical and digital
Volvo sets an example, who sold the their lives based on emotional factors sphere continuously.
first 1927 models of the XC90 online.1 and lifestyle fit.
Digital disruption affects traditional
With that trend accelerating over the
However, as early anecdotal evidence automotive sales models
last years all carmakers must find an
such as Volvo and our research show,
appropriate response to thrive within Automotive companies are ever more
buying online becomes more and more
the new market conditions. challenged by companies from other
common. Especially for young digital-
industries – companies which dominate
Customers want to buy cars online native customers, for whom a car is
customers’ online habits and expecta-
less a status symbol than for older
Buying a car has never been easy. “Who tions. Especially pure online players
generations, it would be surprising if
is actually buying a car online? It is an and customer centric companies
eCommerce trends of other industries
experience that’s all about the feeling, such as the GAFAs (Google, Amazon,
would steer clear of the automotive
smelling and touching”. This sentence Facebook, Apple) and BATs (Baidu,
industry.
somehow describes the opinion of Alibaba und Tencent) of this world
some OEM officials. Since it’s a major Looking at the numbers, our Cars shape customer expectations glob-
investment for most people, it usually Online Trend Study reveals that 3 out ally, as Capgemini’s Cars Online Trend
takes up a lot of thought and count- of 4 customers would buy a car online Study 2018 demonstrated. Customers
less hours of research, comparisons already in 2016. Customers thereby simply expect the same treatment
and discussions. In case of purchas- expect an online price advantage and from their carmaker (and dealer) as
ing a new vehicle, the possibility of time savings, as they are used to from they receive from consumer goods
Figure 1: Customers are already willing to purchase vehicles and after sales products online,
but have specific expectations towards online sales
Automotive customers show a high Customers are indifferent towards When purchasing online, customers expect a
willingness for purchasing cars and purchasing a car online from the OEM, price advantage and a broader product and
after sales products & services online licensed dealerships or third-parties service assortment
75% … of the respondents are willing 63% … from the manufacturer‘s 55% … of the respondents expect
to purchase a car online online shop a price advantage
1
https://www.media.volvocars.com/global/en-gb/media/pressreleases/149590/
all-new-volvo-xc90-1927-limited-first-edition-cars-available-only-via-digital-commerce
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and retail companies. Therefore, these these technologies in their operations transferring sensitive resources such as
players’ move into the automotive to make online sales happen. customers or transaction data to their
industry will be even more challeng- coopetitioners.
Since product lifecycles and therefore
ing for traditional carmakers. In 2017
innovation times are generally much
Amazon announced their plans to sell
shorter in technology companies, auto-
cars and corresponding products on “To keep track with changes,
motive OEMs increasingly will need
their platform.2 This event should ring
to collaborate with these companies carmakers shouldn’t refuse
the alarm bell in automotive CEO’s
to integrate new tools and processes to collaborate with innova-
offices, as this would be the first indus-
try not to be completely disrupted
in their online sales customer jour- tive companies that push
ney. This puts them in a somewhat forward in their own busi-
by Amazon.
ambivalent position, as they need to
Digital innovation offers opportuni- collaborate and compete with these
ness model. However, they
ties for automotive eCommerce players at the same time. For example, should be cautious on what
OEMs and their dealers could use information to share with
New technologies can also be of great
use for the eCommerce approaches
Amazon’s platform to market (after their coopetitioners. Crucial
sales) products to maximize reach data should always be in pos-
of car makers. For instance, 360° car
while building up their own branded
photos and virtual/augmented real-
shop ecosystem and be in direct com-
session of OEMs.”
ity allow opportunities for the visual
petition with Amazon. We call this
quality of their offers, while e.g. video Christian Küster
phenomenon ‘coopetition’. OEMs will
chat or face recognition enables digital Automotive Account Executive,
have to manage this situation care-
processes like user authentication. Capgemini Invent Central Europe
fully and especially safeguard against
OEMs will need to find a way to include
Figure 2: Different new technologies and players are shaping automotive eCommerce
Virtual
Reality
New technologies allow the creation of Big tech & eCommerce players New market player compete for the client
disruptive digital business shape customer relationship and disrupt the value chain
Examples: Cloud, artificial intelligence, Examples: Cross-channel, cross-device, Examples: Carvana sells 100% of their
virtual reality, digital verification 24/7 customer support, convenient used cars online without using any
methods, digital marketing and new (& free) delivery, simple return, intuitive dealerships, instamotion enables online
payment methods processes, personalized offers trade-ins for the purchase of used cars
4
https://www.ft.com/content/34737954-51e6-11e7-a1f2-db19572361bb
2
5
IT’S ALL ABOUT DESIGNING
A NEW EXPERIENCE
The following section outlines how OEMs can use the chances of digital
innovation and react to new coopetitioners to sell cars, parts and
services online.
Considering the shift cars are under- phase take a major part of time and that the car plays in customers’ lives.
going from the main means of effort, before the design team can Using a variety of online and offline
transportation and status symbol to start with several iterations. Besides channels, customers start forming an
just one option in a mix of various getting a clear understanding on the opinion on the values they associate
mobility offers, OEMs must come overall business goals and techno- with a car and put themselves in the
up with something new to convince logical capabilities this first phase is pictures progressively. Through the
customers. In today’s world, a car has all about gaining a deep understand- insights generated during a qualitative
to reflect and neatly fit into a person’s ing of and empathy for the user. research phase it is possible to easily
individual lifestyle. The experience Through the means of ethnographic personalize and tailor: car customiza-
needs to transform from being a research methodologies like contex- tion has always been an important
product that customers want to own tual inquires, qualitative in-depth feature of the way these functional
to a platform fulfilling a number of interviews and observations, OEMs means of transportations become
services. This change imposes the chal- are able to uncover customers’ prob- objects of personality and desire. This
lenge to readjust the way to connect lems, desires and needs and translate is even more true since the diffusion
with the consumer, as it fundamen- these into insights. This approach of mass customization and just-in-time.
tally changes the dynamics of the ensures that organizations don’t fall Taking pages from the book of the
purchase decision. However, if done into inside-outside thinking, mean- fashion industry, with their product
right it opens a vast amount of new ing that organizational processes and personalization (e.g. Nike ID), customer
opportunities at the same time. Once structures dictate the way products experience design can help custom-
a consumer decides to invest into a and services are shaped. Considering ers easily customize, personalize and
certain ecosystem, it opens doors the important role that lifestyles tailor the car they are looking for to
which enable automotive companies to and mindsets play in guiding the way buy. The difference is that besides the
get very close to their customers and people make purchase decisions, it is typical customization through detailed
integrate closely with their desires and even more important to get as close as features – there’s a trend towards cus-
needs – apart from just getting from possible into the minds and hearts of tomization by lifestyle and life events.
A to B. customers.
Online and offline integration is key
Using customer’s lifestyle to sell It helps to focus on how the car fits
As eCommerce becomes an ingrained
online in people’s new lifestyles, as consum-
component in consumers’ lives in areas
ers now have more and more options,
At the beginning of every solid design- as grocery, fashion, utilities and white
OEMs need to redefine the key func-
process comes a discovery phase. goods, people have started to use a
tional, emotional and social aspects
As shown in figure 3, the discovery mix of online and offline channels to
go through the decision making of
Figure 3: Project phases buying a car. Dealers and retail points
have shifted their role: they are now
Strategic Design Detailed Design & Execution experience centers. Selling is not going
What to build How to build it
to be their primary activity anymore,
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not as much as allowing people to an overview of the current way the The online purchase is a step of high
touch, feel and play with their poten- overall experience comes into place. importance, and is often associated
tial new purchase. In addition, they can figure out what with a lot of doubts, uncertainties
parts need to be redesigned in order and second-thoughts. The lack of a
Following this evidence, digital chan-
to enhance the outcome from a cus- person – a dealer or customer repre-
nels are increasing their importance in
tomer perspective: it helps orchestrate sentative to support throughout the
disintermediated buying: once tried,
marketing, digital and retail initiatives journey – may increase the possibility
individuals and families are becom-
in a way that is seamlessly connected that the whole process feels uncom-
ing more familiar with the idea of an
and based on what consumers do. It fortable for the user. Careful design
evening in front of a computer - or
divides the experience into frontstage of the eCommerce process brings the
even more frequently a mobile device
and backstage activities, where the right information to customers as they
– where they can customize their car
first is all about what the customer start having these uncertainties. It also
and order it without the mediation of
sees and experiences and the latter helps customers to get in touch online
a dealer.
accounts for the necessary processes with people who can support them
Experience design helps brands re- that need to adapt inside the organiza- in their micro-moments of doubts:
shape the pre-purchase discovery tion to be able to deliver value to the online concierges (a mix of automated
journey: by considering the purchase customer. Constantly assuming these and human support) as well as direct
journey something that happens across two views in relation to each other connection with online customer sup-
multiple touchpoints, design teams can makes sure that the whole system is port – integrated at the right time
assist brands create a holistic approach changed instead of single actions that within the journey – make a difference
to helping consumers through the are well intended but are disconnected in reassuring people and giving them
different steps of the decision-making from each other and will therefore the confidence to continue without
process. likely result in disrupted experiences someone else driving their purchasing
experience.
Figure 4: Shapes of design
“eCommerce is not only
Service Design
a new sales channel for
Analog
UI Design
digitally.”
Capgemini Invent 2019 David Lindskog
Heah of Digital Strategy & Customer
As the last layer, service design helps for the customer. In contrast, a well- Experience, Capgemini Invent Nordics
to orchestrate and marry individual designed customer journey and the
touchpoints into one seamless, coher- corresponding frontends will enhance However, more is not always better.
ent experience while at the same time the brand with the potential to create Adding a technology should always be
accounting for business goals and signature moments of engagement, the means to an end to solve an exist-
the necessary internal processes and which will remain with the consumers ing problem, satisfy a customer pain
structures (see figure 4). Through the as happy memories. point or deliver real joy. Mindlessly
creation of customer journey maps and using it just to “see what sticks” can
service design blueprints, OEMs gain create the opposite result.
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AGILE IT AND NEW TECHNOLOGIE S
ENABLE THE NEW EXPERIENCE
To provide a seamless purchasing integration of business functionalities The best way to go through these
journey and to meet new customer like e.g. analytics, customer support or steps is to conduct scoping and IT
expectations and preferences, respon- content management into the eCom- target picture workshops with stake-
sive and flexible IT is required. At the merce platform is a must-do holders from the business and IT side
same time, it needs to be ensured that (see figure 5). to break up silos, considering the new
ongoing processes can be continued customer expectations. Once the
A seamless customer journey and
stably and reliably. However, OEMs scope of the platform is known, the
smooth processes therefore require
usually depend on legacy systems with process of setting up the eCommerce
both, dealer and OEM systems
complex, heterogenic structures that platform can be defined. Basically,
integration, which can be a great
have been growing over years or even three different solution types are
challenge for OEMs due to the
decades. The systems, that partially feasible. All three types can be sup-
described environment.
date back to the 70s, either do not ported by cloud technology to profit
allow new requirements or cannot To find the appropriate platform from enhanced automation, fast avail-
keep up with the modern require- approach, requirements need to ability of resources and scalability of
ments of a digital world. They are be collected, modules defined and capacities to cope with the aforemen-
based on rigid development cycles intersections between these modules tioned issues.
and do not have the necessary inter- identified:
Standard software
faces to connect the needed systems.
1. Requirements: Functional and
Therefore, an agile, digital project Standard software provides eCom-
non-functional requirements
structure is significantly impeded. The merce functionalities and standard
must be collected and prioritized
slow, market-wide or even interna- processes out of the box, is ready to
tional rollout of new retail systems 2. Platform modules: Modules use and provides best practices. The
can also become a stumbling block needed to meet the requirements key advantage of standard software
for eCommerce. must be identified is that it can be applied quickly and
does not require extensive program-
Finding the right platform approach 3. Integration map: Interfaces
ming know-how. However, changing
is the first step between the modules must be
or adding functionalities or processes
indicated by means of an integra-
For a user-friendly and sustainable is limited to the standards provided
tion map
eCommerce experience, however, the
Business functionalities
Analytics and Customer Order and inventory Procurement Content Marketing Pricing and
reporting support management management promotion
… … … … … … … … … … … … … … … … … … … … …
eCommerce platform
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by the software. Therefore, the No Agility without cloud technology operating environment are consis-
usage of standard software limits tently automated. The high degree
As mentioned before, all three
the possibilities to build a strong USP of automation is the ideal basis to
approaches can be supported by cloud
against competitors. leverage a DevOps approach and con-
technology to take advantage of the
tinuous delivery of new functionality.
Framework software fast availability of resources, to get
access to innovations as well as flex- Software as a Service (SaaS) deliv-
Framework software provides generic
ible pricing models. ers ready-made applications that can
eCommerce functionalities and acts
be used directly by customers as a web
as a building block with the ability to The combination of eCommerce
application. Operation, development
adapt functionality and processes platform approaches with the dif-
and maintenance of the software are
flexibly. This is a major advantage but ferent cloud service models results
carried out by the SaaS provider.
also requires more programming skills in different advantages and disad-
than the application of standard vantages. Figure 6 illustrates the IaaS and PaaS can be operated both
software, since the software is not possible combinations. as a private cloud on dedicated
ready to use. In the automotive con- machines and as a public cloud on
With Infrastructure as a Service
text, framework software is shared machines. A private cloud envi-
(IaaS) components such as virtual
recommendable for setting up a web ronment can be operated in its own
machines are automatically made
shop for after sales products, ser- data centers or hosted by a provider,
available via a self-service portal in
vices and accessories, as it reduces whereas a public cloud environment
any quantity. Instead of waiting days
time-to-market with the option to is always operated by an IT provider.
and weeks to create and configure a
flexibly adapt desired functionalities. SaaS, however, operates only as a
virtual machine, a developer can select
For these reasons, Ford and Renault, public cloud3. The cloud’s elasticity of
a pre-configured virtual machine on
among others, chose framework capacity typically reaches a limit for
a management console with one click
software to build their accessory web the private cloud due to the limited
and use it minutes later.
shops, as illustrated in figure 7. resources in data centers. Large public
A Platform as a Service (PaaS) cloud providers like AWS, however,
Self-development
layer automates the provision of a continuously invest in their data
A self-developed solution provides development and operating environ- centers and have millions of physical
the highest degree of flexibility and ment. The management of databases, servers in globally distributed data
scalability for functionality without security, integration, development centers. Therefore, they can react
any limitations. It allows tailoring the tools, associated test and release much more flexibly to high load peaks
solution to the exact needs of the processes and the management of the and scale capacities automatically.
business, but also requires exten-
sive programming skills and implies
Figure 6: Possible combinations of platform solution types and cloud
a high one-time effort. As the online service models
sale of cars in most cases is linked
to a complex structure of systems, Software as Platform as Infrastructure
self-developed software solutions are a Service a Service as a Service
recommended to consider the specific
Self-development
system landscape and business needs
of the OEM. Therefore, companies like
Hyundai as well as Autoscout24 rely on Framework Software
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Applies to multi-tenant only - single-tenant private cloud possible but not relevant since advantages of public cloud are eliminated
3
Standard and framework software reduce their costs as no investment No benefits without challenges
through SaaS or IaaS in data centers is needed and provide
To fully enjoy the cloud benefits,
the highest data center security and
If ready-to-use software or framework however, some challenges have to be
degree of availability. However, con-
software from a provider is installed overcome in advance.
siderable in-house IT skills and staff
on-premise, there needs to be tech-
will be needed. Also, there is less con- First of all the new cloud architecture
nical in-house knowledge to install
trol over the physical location of the design needs to be applied and inte-
and update the software regularly.
server. The same applies for frame- grated. Depending on the complexity
The company’s own IT staff are fully
work software when it is installed on of the application landscape the
responsible for the availability of the
automated IT-infrastructure. transformation can be rather challeng-
shop. Also, the initial investment and
ing and depends on a sophisticated
the recurring costs are rather high. Self-developed software through
transformation roadmap. A new task
PaaS
To cope with these issues, standard that comes with the introduction
software can be provided without PaaS is the cloud service model of cloud technology is the manage-
installation by a cloud service provider of choice for implementing a self- ment of the chosen deployment
(SaaS). This leads to a very fast deploy- developed software solution as not model. Besides these fundamentals
ment as the software can directly be only the IT infrastructure automated the financial impact on TCO and the
used as a web application. Operation, but so is the development process, effects on IT accounting need to be
development and maintenance of making the development much faster. elaborated. Even though data center
the software are carried out by the The integration with existing appli- security is very high, when applying a
SaaS provider, guaranteeing high cations of any kind is rather easy in cloud approach, cloud security aspects
stability and quality. Also, total cost this case. As with all cloud service – especially identity and access
of ownership (TCO) can be reduced models no investment in data centers management – need to be taken into
due to fewer IT expenses. However, is needed and further cost reductions account. The new cloud strategy also
compared to on-premises installation, can be realized through standard- requires changes to the IT target
full control over the system and its ization and automation. With PaaS operating model. Changes to the
upgrade cycles and new features is the maintainability and scalability existing organization, roles, processes,
given up. of the eCommerce software can be and governance need to be conducted
improved through the direct access of to successfully use cloud technolo-
If OEMs want to keep responsibility
the auto scaling and load-balancing gies. In order to effectively leverage
for all aspects of software manage-
features of the cloud platform. The cloud benefits and become truly
ment internal but still take advantage
degree of availability as well as the agile, organizational changes regard-
of the high availability the cloud
data center security are very high. ing skills, leadership and culture need
offers, they can also install the ready-
However, a loss of control over plat- to be considered as well. To address
to-use software on an automated
form and data is possible depending these challenges in a structured way,
IT-infrastructure (IaaS). This will still
on the cloud provider. Capgemini Invent has developed the
Cloud Strategy Framework.4
4
For more information on the Capgemini Cloud Strategy Framework please visit 10
https://www.capgemini.com/de-de/service/invent/future-of-technology/cloud-strategy/
Figure 7: Selected examples for eCommerce approaches from different automotive companies
Declining sales in Magento based solution for the 92% of Hyundai customers “Click to Buy” is an industry-first
accessories business official Ford web shop start their research online developed by Hyundai in-house
Requiring a flexible and PHP framework, Shockwave Flash Hyundai strives to be Collective development of user
innovative solution which embed and Fancybox Javascript first OEM to offer an experience, design and front ends
contains a new customer end-to-end online car
experience concept Various filter options to browse the buying solution Functionalities for customers to
large product portfolio trade in their car, configure a new
Former website provides Solution needs to regard car, arrange financing and pay the
very complex view of any possible customer deposit from all devices
interior and exterior journey
accessories
Renault seeks to provide Renault chose Magento as the best Performance issues due Development of an own solution
their customers with a new solution for their online store to high automated and based on Amazon Web Services
eCommerce store requirements and implemented it human traffic
Swim lanes to microservice
within five weeks
Renault wants to be Intended change from From .NET on Windows to the
independent and flexible in Quick setup and easy adjustment to on- premise to cloud- JVM on Linux
terms of development and Renault’s specific needs based solution
maintenance of the From own data centers to the
eCommerce platform Internal processes such as shipping, Some parts of the platform cloud
complaints, payment methods, difficult to automate
From separate development
The structure of the site payment control and inventory
and operation departments to
should attract customers disposition in the Renault web shop
“you build it, you run it” teams
and the interface should be were mapped exactly to
easy-to-use requirements Rebuild whole product site
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CONCLUSION
In today’s automotive landscape it is With respect to the new role of dealers Check list for OEMs – what needs to
clear that the possibility to sell cars as an experience center rather than be done
and services online issues a rather the ultimate point of sale, the entire
Strategy
big challenge to most OEMs. After customer journey needs to be redesig-
decades of successfully selling via the ned (including all entry points as well • Evaluate possible partnerships
classical stationary sales model car as online and offline touchpoints) to with pure online players and inno-
makers now find themselves in a more satisfy customers. vative technology companies
complex environment with rapidly • Consolidate eCommerce targets
Third, these requirements won’t be
changing customer requirements on and requirements of each business
achievable without an agile and scala-
the one hand and lacking experiences line
ble IT landscape, which needs to be set
with the new sales channel and touch-
up according to the desired business Design
points on the other hand. Therefore,
targets. OEMs need to determine an
OEMs quickly need to develop their • Conduct user research as focus
appropriate platform approach for
own eCommerce solutions and care- interviews and user testings
their eCommerce activities. Different
fully integrate customers and dealers
cloud deployment models can enable • Consider all touchpoints, not just
into the development process. Based
the agility and scalability required for those that are online
on our experience, we see a need
successful eCommerce enterprises.
for OEMs to thoroughly tackle these • Include your dealership in the
challenges and especially consider stra- Such an intention can only become a overall journey
tegic design and backend topics hand reality by starting a dedicated project Backend
in hand. setup with agile project management
and using an MVP approach. A digital • Determine the suitable platform
First, before a web shop is designed, approach by gathering requi-
transformation project enables OEMs
OEMs should analyze how the eCom- rements, identifying required
to react to changing customer and
merce solution fits the brand strategy, platform modules and developing
dealer requirements and incorporate
incorporating all business lines. An an integration map
feedback quickly. As always, the abi-
after sales and services web shop will
lity of an organization to change and • Identify the suitable solution type
impose different requirements than
adopt cultural patterns should not be considering the business model
a new or used car sales platform.
neglected for the success of the eCom- and intended value proposition
However, OEMs are willing to provide
merce endeavor.
one single ecosystem to their custo- • Decide on a promising com-
mers for the entire product portfolio. In our view, automotive OEMs have bination of solution type and
A direct sales model requires different no reason to back off from automo- supporting cloud technology
forms of dealer integration and remu- tive eCommerce. Instead, they should Overall
neration compared to a model in which rather look boldly into the future and
the dealerships are the contractual find a way to combine their strengths • Apply agile project management
partner, just to mention a few relevant with new possibilities to serve custo- tools and processes
strategic barriers. mer demands and become true • Establish the IT capabilities requi-
eCommerce champions. red to develop, implement and
Second, after the alignment of the
overall eCommerce strategy, OEMs operate the determined solution
need to define how to design the type
entire customer experience of such a • Experiment and re-iterate product
web shop, including options to change increments using MVP approaches
between the online and offline world.
• Take care of change management
within your organization and
dealership
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CO N TA C T
Christian Küster
Automotive Account Executive – Central Europe
Phone: + 49 1517 06010 232
[email protected]
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About
Capgemini Invent
As the digital innovation, consulting and transformation brand of the
Capgemini Group, Capgemini Invent helps CxOs envision and build what’s next
for their organizations. Located in more than 30 offices and 22 creative studios
around the world, its 6,000+ strong team combines strategy, technology, data
science and creative design with deep industry expertise and insights, to
develop new digital solutions and business models of the future.
Visit us at
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