Five innovative strategies for next-gen auto retailing in a perhaps not-so-entrenched industry that is creatively bridging the digital-physical divide

In 2020, the automotive sector has been bucking its reputation for being stuck in its ways and lacking innovation. PSFK researchers studying the industry have been tracking major points of strategic brilliance allowing auto brands and dealers alike to provide state-of-the-art activation, discovery, trial and purchase experiences. As part of a deep-dive report unpacking the swiftly evolving omnichannel and largely digital-first path to purchase for car buyers, the team found an industry increasingly defined by an ability to bridge the physical and digital worlds. Here, we share from the report five of the most actionable trending strategies for innovative auto retail, brought to life with examples from the industry's leading players.

Immersive Exploration For many shoppers, digital commerce still presents the barrier of not fully explaining how a product might fit or work within a customer’s lifestyle. Retailers are bringing their digital content to life by partnering with VR, AR and gaming platforms to create immersive online shopping environments and allow customers to virtually explore and engage with products before considering a purchase. Lexus’s AR Play app effectively lets prospective car buyers take 360-degree tours of its 2021 IS sedan, providing audio narration to explain features like design elements, performance and safety tools as they embark on their virtual exploration—complete with a test drive simulation after customizing their ideal car.

Expert Consultations Research shows that though 80% of prospective car buyers are likely to start the process on the web, 78% still find the in-store dealership experience valuable—pointing to a need for hybrid retail experiences that maximize online discovery. Retailers are further humanizing and personalizing the digital aspect of the shopping experiences by offering customers high-touch, 1:1 consultations with on-site experts to guide them toward the right purchase. By utilizing the video capabilities, both customers can see products in situ and associates can get a better sense of the shopper, their preferences and lifestyle. For instance, Cadillac Live’s online showroom permits customers one-on-one video consults with agents who can personally show them close-up views and demos of various models’ features. Then customers can choose which model they’d like to test drive—and skip right to getting behind the wheel when they show up, having completed the showrooming aspect virtually.

At-Home Trials Providing customers with the ability to test a product within their everyday life before committing, at-home trials and testing opportunities create greater customer confidence while providing a direct link between a shopper and brand. As brands explore ways to amplify the product experience stage within each shopper journey, elements of convenience, and product immersion continue to inform consumer perception and affinity. Nissan is helping consumers get a better feel of their next car by partnering with car-sharing marketplace Turo to let prospective buyers book cars for extended test-drive trials, giving customers the opportunity to see how a model could truly fit into their day-to-day life. 

Incentivized Ownership As a way to keep customers involved between purchases and encourage them to develop a deeper-level of engagement, retailers and brands are updating their loyalty programs to offer rewards for value-added activities that extend beyond a single transaction. From registering products and attending events to sharing on social media and referring friends, these programs provide customers with a greater sense of connection and control while building a personalized relationship with each shopper. Jeep’s ‘Badge of Honor’ mobile app experience is activating a community around the brand by connecting fans of off-roading, providing trails for members to try as well as reviews from those who venture out on them and awarding badges for participation as well as photo-sharing. 

Community Marketing In an effort to stand out in an increasingly crowded marketplace, brands are looking to encourage more audience engagement post-purchase and make these customer voices a larger part of the shopping experience. To do so, brands are tapping into their loyalty programs and social channels to customers, inviting them to share user-generated content in the form of ratings and reviews. Honda is cultivating a community around its brand by hosting guided virtual tours at American national landmarks where experts like park rangers host live educational sessions that viewers can stream on-demand. The goal is to encourage viewers to share their own outdoor treks at #AdventuresWithHonda, which creates online social buzz and helps the brand reach additional audiences through a network.

And these are just a selection of the many trending strategies PSFK researchers identified as driving the future of the automotive industry in a recent deep-dive — for more, look out for our follow-up “deeper insights” article, and view details about the report here