How automakers, dealerships can set themselves up for success post-COVID

As we emerge blinking into the light, through the proverbial dust cloud of the asteroid of COVID-19, what will it take to make sure that automotive brands are on the right side of the competition during recovery? How to set up organizations to navigate what is undoubtedly an uncertain and rapidly shifting future is an existential question for many. How do brands ensure they are the nimble and adaptable mammal, as opposed to the lumbering dinosaur?

There's been plenty of discussion around the impacts of the pandemic. Consumer behavior shifts can be viewed in two categories: the acceleration of existing trends and the emergence of new COVID-19 specific ones.

Existing trends include increasing demand for convenience in the retail and servicing experience. Our own research with a leading automaker shows a 6 percent increase in comfort with purchasing a vehicle completely online as a result of COVID-19. In addition, there has been clear growth of interest in electric and autonomous vehicles.

New COVID-19 specific trends include the immediate need for touchless vehicle pickup and drop-off for servicing, as well as the rise of remote work. The subsequent reduction in commuting will mean customers are less likely to drop off their car for service on the way to work, potentially leading to them switching service providers. Already, real estate agents are reporting a steep increase in the proportion of new buyers looking to leave large urban cities for the suburbs. This will likely change retail demand and service volumes for dealerships.

Concurrently, consumers are preparing for the worst financially as savings rates hit a record 33 percent. If previous crises are to be a guide, this contraction in spending will remain in place for a significant period.

In this shifting landscape, different stakeholders are moving at different speeds. Automakers are rapidly expanding existing programs or rolling out new ones.

Some notable examples of where this is happening are Cadillac's Shop, Click, Buy program, which highlights existing dealers with the ability to check out online. The model where inventory options on the brand site are filtered by the ability to checkout online seems to be the most popular among automakers. Audi At Your Door takes the same approach though with a dedicated microsite. Other automakers, such as Lexus, seem to be leaving all response efforts up to the dealers themselves. Of course, those doing best now will be those for whom this method of doing business was always second nature, such as Tesla and Carvana.

Outside retailers, companies that support the move to online selling are also doing brisk business. Whisbi, whose platform enables live video calls with sales reps, previously partnered with Hyundai, and will be fielding more calls as customers avoid showrooms entirely.

Dealers and automakers need to equip themselves to be able to quickly understand how the landscape is changing, then respond to it. Understand your customer's journey, identify where the most value is generated, and uncover where the friction for customers and/or the business is.

Following this, identify where value is being lost due to a poor customer experience, or where COVID-19 has created a demand for a new type of customer experience. For example, a reluctance to visit the dealership will likely lead to an increase in demand for at home servicing collection/drop-off.

Once a pain point has been identified, then a decision about how to address it needs to be made. This is all about understanding the problem in depth. Talk to customers through appropriate user research methods, uncover the nuances in what your specific audience would find most useful and where the opportunities for innovation are. The demands of home delivery/collection for customers in rural Nebraska are going to be different to those of customers living in Manhattan.

Once you've identified the problem and have some ideas for the solution, think about what is the minimum amount of effort needed to validate whether a solution will work. For example, could you mock up the experience with some customers and get their feedback before investing? Following this, decide if you're going to build or buy a solution. Do you need the speed to market and lower cost of an off the shelf e-commerce tool such as Roadster, or the flexibility and control of something custom built? Once in place, begin the cycle again so you're ready for the next shift, whatever that may be.

There are many models for how this agility can be achieved. Invest in market research or develop the skills internally. Streamline procurement so you can quickly test third party vendors. Run your own internal design sprint with free online resources. However you choose to approach it, make sure it's fast.

If the recent lockdown reversals are a sign of things to come, which seems likely, then the next few months are going to be characterized by deep uncertainty. A nimble approach based on understanding your customers and the customer journey, and COVID-19's impact on it, is vital. This means constantly listening to what your customers need, experimenting efficiently with solutions, and scaling quickly. If you do all this, there's plenty of opportunity to thrive in this ever changing new world.