Earlier this year, in March, the country’s second-largest carmaker by sales volumes, Hyundai Motor India (HMI) took a forward-looking step and introduced the ‘Click to Buy’ (CTB) online retail platform, integrating over 600 showrooms across the country to be able to offer digital retail services to customers.
While the company’s move was based on its long-term vision of anticipating a gradual shift in vehicle retail towards the digital medium, the pandemic only accelerated its plans to swiftly introduce the project, which was under pilot stages in December 2019.
Now, with over two months of experience in tracking customer trends on its portal, Hyundai says that as much as 70 percent of consumers are looking for a contactless buying experience during their new purchase – a recent trend driven by the pandemic.
Also, according to Hyundai Motor India’s research, of the total number of people researching for a new car online, around 40 percent of those are actually willing to make a purchase completely digitally.
According to Tarun Garg, director, Sales and Marketing, Hyundai Motor India, “This shift towards digital has been quite a dramatic one. At Hyundai, our digital inquiries have moved from being placed between 10-12 percent last year to now in the range of 25-30 percent during the last two months of the Covid-19 crisis.”
Garg was part of a five-member industry panel that participated in Autocar Professional’s virtual conference on ‘The Future of Automotive Retail’ held on June 26. The other panellists comprised:
- Dominic Kurtaz, CEO, Dassault Systèmes 3DEXCITE
- Veejay Nakra, CEO, Automotive Division, Mahindra & Mahindra
- Vivek Srivatsa, Head – Marketing, Passenger Vehicles Business Unit, Tata Motors
- Ashish Kale, President, FADA
However, while the Korean carmaker’s chief marketeer highlighted this emerging trend, he also acknowledged the fact that car buying still remains an emotional and social experience for customers. “The moment the lock-down was eased, most customers pressed upon coming to the showrooms for taking delivery of their new cars, even when we offered doorstep delivery,” said Garg.
“So, the car is going to remain a priced possession and the role of dealers is going to be very critical,” he remarked.
With its CTB, Hyundai essentially has been trying to bridge the gap between the dealer and customer during these trying times when it is impossible for a dealer to maintain visibility and reach out to the customers by doing any on-ground activities and events. So, the digital medium is ending up being a huge source of inquiries and leads for the vehicle dealer to allow them to take up the process further.
Garg gave an update about the online visitor footfall on the CTB portal and said that since its introduction in March 2020, already 12 lakh customers have visited the company’s online retail portal, and are now able to get much more trustworthy information about a product as well as get personalised experience for buying a new car.
He also shed light on the benefits that technology in terms of being a big enabler to rationalise costs in the back-end of a dealer’s operation as well.
“There are so many things that can be done with the customer as well as sales personnel sitting at home. The training of dealer workforce used to be a huge expense and over the last two months, we have suddenly found that trainings can be successfully done online as well. So, this is a huge enabler in allowing dealers reduce their expenses,” Garg said.
Digital trends: rural versus urban
While digital is making huge strides in the urban confines, the big question that arises is whether it is having an equally strong impact in the rural areas and Tier-2 towns as well.
According to Garg, “Digital penetration in the hinterland is very much there and technology, with the lowest cost of Internet in India, is diminishing the demarcation between urban and rural areas.”
“After integrating our outlets in the urban areas on the CTB platform, we managed to integrate our entire rural sales channel online, but were surprised to see that within just one week of floating the idea, more than 30 percent of our dealer partners from the hinterlands opted to get digitally connected, completely knowing the scenario of their local markets well,” he added.
“Also, the interest in our new models, for instance, the newly launched second-generation Creta SUV, has been equally strong from rural markets compared to urban cities. So, technology has really brought India together and the differentiation between aspirations is becoming very thin,” Garg said.
Garg also pointed out that within the new consumer trend, vernacular could be the next revolution in digital and that OEMs will have to play a key role there.
“Hyperlocal information is going to play an important part and this kind of localisation is going to be very crucial going forward. A dealer will have to customise to cater to the audiences near them,” he remarked.
How to better gauge market potential?
Building more upon technology and leveraging the vast potential of the numerous tools available to do business today, Garg mentioned that it is time when the industry needs to shift to do data-driven marketing and optimise and correct the data currently available to target the right customer.
“All of us are sitting on a huge pile of data and want to believe that we have been using it very well.”
He cited examples that how companies need to ensure that the same service advisor handles the customer when he or she revisits the workshop for the vehicle’s routine maintenance. Moreover, things like remembering the customer’s preference on his last car when he or she comes in after a few years to upgrade to a new model would go a long way in enhancing customer experience.
“We are just trying to close the deal rather than probing the data. The time has come when we need to effectively use data and offer a personalised experience to the customer. Even the customer wants not be treated in a generalised way but in a personalised manner,” said Garg.
“Simply by using data, a lot of efficiencies can come in and I think we are on the right path,” he added.
Co-existence of physical and digital
He further explained that, “We have to know the customer much more. While a customer sitting at home can go to the website and personalise the car, we will have to complete the entire experience at the showroom.”
“We should be ready to complement the digital part of the buying journey inside the showroom,” Garg said.
Today, a customer interacts with close to 15 different people after entering a showroom to purchase a new car. So, why cannot we have a single-window point of contact for a customer?” questioned Garg.
“It would require a lot of reskilling at dealerships but it would enhance the buying experience by a huge margin,” he further explained.
“We have to be empathetic with the customer and remove the anxiety in his mind so that he feels a connect with the brand. It has to be a 360-degrere way of selling rather than selling the vehicle in a piecemeal way,” added Garg.
So, while physical showrooms and digital retail will stay for good, the change of pace in the consumer habits that has been largely driven by the pandemic will continue in the future once the Covid-19 crisis subsides as well. But can buying cars become a 100 percent digital phenomenon in the future?
According to Garg, “As things stand right now in India with a car penetration of 27 per thousand, a car is still an emotional purchase. The moment that emotion goes out of the windows and it becomes a mechanical purchase, we could see car buying becoming a completely online process. “I don’t see that happening at least 8-10 years down the road,” he signed off.
Automotive retail: The digitally augmented physical experience
3DEXCITE’s Dominic Kurtaz: ‘The car is no longer a mode of transportation, it is a connected product’
M&M's Veejay Nakra: ‘Once you get the taste of convenience, it is difficult to go back’
Tata Motor's Vivek Srivatsa: ‘Thanks to digital space, OEMs can go anywhere in the country’
FADA's Ashish Kale: ‘Dealers are a resilient lot and we will adapt to new methods of selling’