EY Automotive Retail Conference

What will be the future model for a car

dealership?

December 9th 2014

 Agenda
The challenges of excellence in customer experience:

Overview of experiences with Customer relationship re sale and after-sales.

new concepts being conducted Who owns the customer?

by the manufacturers in
Europe and in key global
markets

Page 2
 Context and Background
OEMs invest heavily in retail and distribution, both in strategies and
operations

Customers and OEMs focus on product ►►► Change ►►► Customers demand service

Customer Centricity
Design & Lean Lean ► Customer Experience
Functionality Development Production ► Customer Loyalty
► Mobility Services

1950 1970 1980 1990 2010 2014 2020

► Major car development steps on a timeline

Page 3 Automotive Retail Solutions

Successful brands setting the scenes
Automotive discover Brand power

Brand Power

Automotive brands discover

customer experience and
brand power

Customer Experience

Page 4
Successful brands setting the scenes
Automotive discover Brand power

Brand Power

… and start to invest in

customer centricity initiatives
for being perceived as leading
customer brand

Customer Experience

Page 5
New level of Customer Experience initiatives
BMW Future Retail
MB Connect & Telematics
to target Aftermarket
AUDI City (London, Beijing, Berlin)
Page 6
• Changed retail formats tailored
to particular consumer needs
• Handling raise of product
diversity and proliferation of
options
• Transformation of innovative
concepts and driver assist
systems to comprehensible
presentation methods
• Mass Customization for new
car market and aftermarket
• Upselling by individual
customized Service Initiatives
• Connected Car Services and
Telematics will bring customer
delight & WOW-Services
But even upper premium and non premium automotive
brands are getting closer to each other

► Renault is aiming for excellence in customer

relations at each point of contact with brand

► Opened 150 Renault Stores across France in one

year

► Virtually entire network will comply with new

standards by end of 2014
(265 sales outlets already engaged)

► After-Sales reception placed in showroom

Established role „receptionist“ welcomes customer

VS. ►
and guides them to the right place

► Warm, friendly brand area enables customers to get

to know brand & products (WiFi lounge)

► Theme-based areas display vehicles in clearly

defined groups (News, Passion, Sport, Z.E)

► Configurator provides large-screen display of all

extras – enables customer to configure alone or with
assistance & display in real time

► Delivery area with personalized handover

Page 7
But even upper premium and non premium automotive
brands are getting closer to each other

► The flagship brand showroom,

Hyundai Motor’s first, features a
series of newly-curated retail
and cultural experiences, as well
as exhibits that engage visitors
and communicate the
company’s future brand
direction and aspirations.

► Hyundai revolutions car buying:

VS. Online, in-store, no car
salespeople

► Buying experience of the for the

digital age

► Located in shopping center

► Design to be disruptive, but also

reflect modern digital lifestyles
and modern approach to
shopping

 Todays‘ premium is expected to be commodity soon

Page 8
Customer Experience Consistency

Customer Experience should cover three consistency levels

Customer Journey Emotional Communication

Consistency Consistency Consistency

Consistent Customer The combination of … The combination of …

Experience along …
… a brand I feel close to … promises made
… Early research
… a brand I can trust … promises kept
… New Car & Used Car
… a brand that recognizes ME … recognized promises
… After Sales
… a brand I can identify with
… considering individual journeys

Page 9
 9 different initiatives to strengthen retail of OEMs have been identified
Geographical Presence
► Mega-Cities vs. Suburban / Rural
Locations, Flagship Stores vs. Outlets vs.
Pop-Up Stores
Customer Treatment
► Customer journey, customer treatment
during customer journey, country-specific
adaptions to customer journey and
treatment
Multi & Cross Channel Mgmt
► Consistent customer experience
for all sales/info channels: internet,
apps, media, events, pop-up stores,
outlets, as well as mobile sales and
customer care centres
Page 10
Store Concept
► Furniture Design, lighting concept,
technical features with new forms of
media, refreshments, entertainment (TV,
Children), relaxation & leisure
Early Test Drive
► Simple test drive bookings, early test
drives, test drives at special events
Social Media Presence
► Measurement, analysis and assessment
of both the brand’s market presence and
overall perception in social media
Future of Retail
Technical Features
► Flat-Screens, display walls, iPads, touch-
Desks, sound-systems, USB-Stick with
car configuration data, i.e. Audi City
Beijing, Lexus Tokyo
New Roles in Dealerships
► Product Genius („Expert“), Greeter
(„Assistant“), Event-Genius, Flying-Stars
Customer Perf. Management
► Measurement of customer churn
throughout the customer journey,
performance of the retail employees,
effectiveness of the new roles in sales
process
 Digital reality

New channels to reach

consumers

Page 11
 Digital reality
Consumers approach to purchasing vehicles changed completely in the last
15 years: Internet and social media are now the first source of information

1998 2013

Daily visits per sales In 1998 there were no Smartphones

advisor[#] 4 1.4 and only 1% of the population was
using the web as a source of
information…
Web usage before
buying [%] 1 92
…Today there are more than 1.2
billion Smartphones in the
world and in 2020 there will be 4
On-line purchase billion
intent [%] <1 42

…In May the only Autoscout

Spare-parts on-line was visited 18 Million times
purchase intent [%] <1 56

Today 16% of all spare parts are

Accessories on-line traded on the internet, and
purchase intent [%] <1 62
this number will rise to 20% in
2024…

Sources: EY analysis; Technological trends; Autoscout

Page 12 Future of Automotive Retail

The main source of information for financing and
leasing is the internet Customers
Potential Customers

Sources of information for automotive financial services Sources of information on the internet

Which of the following sources of information have you used to Where exactly did you look for information about
inform about financing/leasing? (in %) financing/leasing? (in %)

39 58
Internet Search engines (e.g. Google)
42 57

27
17 OEM websites
Colleagues/friends 46
26
35
23 Dealer websites
Dealer 41
26
29
Independent caomparison sites
19 26
Captive/Bank
25
21
Bank websites
23
15
Material from dealer
22 13
Captive bank websites
20
9
Material from OEM 1
17 Facebook
6
1
Print media 4
2 Online car portals
4
4 4
Others Others
4 4
?

Source: EY survey

Page 13
Regarding dealership of the future

Which areas/services should the car dealership of the future offer besides the sales
of new car and used cars as well as after-sales services in order to realize stable
earnings

After-sales (extended, general) 23.3%

Carsharing (alt: mobility concepts) 18.3%
Insurance offerings 11.5%
Extended services 11.5% 20 % of dealer don't know
Financial services 10.8% how to create
Rental (short-/longterm) 10.0% opportunities from the
E-Mobility 8.3% current challenges in their
Shop-in-Shop Solutions 7.8% company
Full comprehensive services 6.0%
Pick-up and delivery services 5.3%
Acquisition of new clients via social media 4.3%
Equipment/accessoires 4.0%
OEM support 3.5%
E-Commerce 3.3%
Networking within the companies 2.0%
No E-Commerce 0.8%
Other 10.0%
None/keep everything as it is 3.8%
Don’t know/no comment 20.0%

Source: EY survey

Page 14
 Digital reality
Automotive customers spend an average of 10 hours on the web to search
information and define where to buy

Sales activities by type of channel

Internet Advertising Word of mouth Papers

Final decision 29% 13% 35% 23%

Car configuration 29% 14% 27% 30%

Choice of model 32% 20% 11% 37%

Price comparison 50% 6% 7% 37%

Preliminary
37% 12% 12% 40%
information

Sources: Autoscout; EY analysis; Technological trends

Page 15 Future of Automotive Retail

 Digital reality
OEMs and Dealers have to use digital marketing and ensure presence
on social media including them in their futures strategies
Increasing role of internet in car purchase Urban markets witnessing social media
and other services proliferation

► 67% of consumers with access to internet use new information ► Over 500 million people are connected via Facebook; 175
channels such as blogs, online comparative tools, webcasts for million followers on Twitter and 95 million tweets per day; 2
vehicle screening and selection billion views on YouTube per day in 2010

► OEMs are aggressively using internet for marketing campaigns,
advertisements, new car launches, offering test drives, register
complaints, booking service appointments, give quotes, etc…
► Big dealer groups creating websites to attract customer base
and initiate sales enquiry, register complaints, etc…
► Consumers sharing uncensored feedback and information on
their perceptions of products and services via social media
► Thenetworks enable consumers to access unrestricted
volumes of data that may influence their purchasing decisions

Future sales and marketing strategies

at the dealerships

Online retailing Web pages on social media

Increase in digital marketing
spend
Dedicated social media
marketing strategy
Attractive dealer websites
Tie ups with companies like Web pages on social media like
Option to enquire, book a test
Carwale, Cardekho, Edmunds, Facebook, LinkedIn, etc… for
drive, register complaints, book
AutoTraderfor enquiries, quotes, general updates, brand
service appointment, etc…
comparison & reviews awareness

Innovative promotion tools Advertisements on car Digital data sharing through

Live launch webcasts, online Shift from content management forums, news portals emails or mobile apps
customer service, car rallies, to user-generated content with increasing reading base, Digital journals to keep in touch
association with travel-based sharing on social media advertisements on leading news with the customer, share product
events websites, car forums info

* Source: Social Bakers, Sysomos and Cisca

Page 16 Future of Automotive Retail

From Multi-Channel over Cross Channel to
Omni Channel

Channel-Management

Multi-Channel Cross-Channel Omni-Channel

DEALER INTERNET CALL MOBILE DEALER INTERNET CALL MOBILE DEALER INTERNET CALL MOBILE
CENTER CENTER CENTER

Silo-Approach of Channels Connection Approach of Channels Integration Approach of Channels

► Same processes and key messages
within independent sales channels
► Each service request is initiated,
processed and closed within its
own channel
► There exist no or only marginal
possibilities to integrate and drive
processes to other channels
► Customer are able to move
between interacting channels
► Customer are actively invited to
change channels
► The approach focuses offering
customer preferred channels (e.g.
online vs. on-site) - based
customer segmentation
► Customers have the same
customer experience along all
channels
► Supply and Quality within each
channel is identic and without any
discrimination
► Customer are able to change
channels at any time and without
any disruption

• How far is your company on integrating and streamlining Sales and Service processes?
• Which objectives are you pursuing on a mid / long-term scale?

Page 17
Dealers must focus on transforming the overall experience for
customers in order to derive a sustainable sales performance

Need for new Changing Impacting customers and business Requiring redesign
differentiators … forces … models … of capabilities to ....
► More choices and options
Mobile ► Higher expectations
► Seek personalized and relevant
and digital Customer recommendations and services ► Design and
behavior ► Any where, any time over deliver
multiple devices and across
multi touch points (mobile, differentiated
tablet, physical) customer
experiences
Standardized ► New entrants – nimble,
product Social specialized ► Build trusted
► Multi-channeled
innovation and Increasing ► Competition – price, product,
customer
supply chain and new selection, options, and risk relationships
competition ► Targeted sellers
► Public reviews
► 24x7 ► Transform
sales, service
and marketing
► Voice of the customer
Discovery of Big data ► Huge data generation ► Achieve
New ► Customer insights
brand power CRM ► New customer segments business
and considerations ► Pro-active sales and service results
customer initiation
► Customer loyalty
experience
…The decade of the customer and customer relationships …
Page 18 Future of Automotive Retail
 Thanks

Page 19