PERSPECTIVE. The Digital Consumer Are Automotive OEMs ready for the Digital Autobahn? Abstract

Transcription

1 PERSPECTIVE The Digital Conumer Are Automotive OEM ready for the Digital Autobahn? Abtract The Digital Conumer The rie of multiple brand and choice, in the current market cenario, ha caued a compulion for buine to tay on top of emerging technologie. Thi phenomenon i continually preurizing automotive Original Equipment Manufacturer (OEM) a well. Jut a the trength of the tool define the power of the automotive, the buine plan define it ale. ebuine i emerging a the key tool for a ucceful buine plan. The auto indutry i witneing the neceity to realize the power of Web 2.0 to increae productivity and profitability through variou mean uch a ocial commerce. The potential gain are immene and the momentum of progre - rapid and revolutionary. Thi paper decribe how the Infoy Automotive ebuine Maturity Model draw out a well planned ebuine trategy that will raie OEM to the highet level of competitivene leveraging the power of Web 2.0.

2 Life of Digital Conumerim With a continuou rie in product proliferation, the conumer i faced with a phenomenal increae in the choice of product and ervice. Brand, acro the world, are truggling to acquire and retain cutomer, and automotive OEM are no exception. New brand and technologie - uch a Toyota Priu, a hybrid and Nian Leaf - are neceitating higher pend on product development and innovation. Product lifecycle are hortening and demand for car - like the TATA Nano - i on the rie. There i a ignificant amount of preure on the top and bottom-line of auto OEM. In the meantime, with the rie of the digital conumer, the Internet ha emerged a a key medium for influencing a conumer deciion making proce, while buying a car. Digital conumerim ha arrived in a big way, a reflected by the following fat fact: 1. According to a urvey conducted in 2008, majority of car buyer pend between 6-8 hour on the internet before purchaing a new vehicle. Similar urvey ugget that conumer rely on three type of webite for their purchae-related information: Third party auto webite for recommendation Automotive OEM webite for product information Dealer webite to earch for inventory Thi ame trend i alo een when it come to ued car purchae and other autorelated ervice - uch a inurance and loan. 2. Over 30% of car buyer pay heed to uer-generated online content, before making their purchae deciion. 3. Only 10% of conumer ue to hare content the majority ha hifted to Facebook, Twitter, etc. 4. Currently, there are over 12 million active blog and cloe to 400 million Facebook uer, averaging 100 friend each. Hence, implementing ebuine effectively i ubtantially more efficient at reaching target communitie/ propect/ cutomer than advertiing. While there i till a lot of ground that the auto indutry need to cover, ome OEM are already etting tandard through pioneering ebuine initiative to increae conumer engagement. Figure 1 depict the 4 trend that ummarize thee pioneering ebuine initiative. Let look at ome of the example: 1. Social Commerce 1 : Ford Motor et a new benchmark for online engagement with it Fieta Movement. 18 month before the US launch, the company gave 100 European Fieta to people in the USA, to drive and live with. All thee 100 people were uppoed to record their experience on the Fieta Movement webite. Thi unprecedented move reulted in 37% awarene level among Generation Y making it the #1 Social Automotive brand in The campaign alo reulted in 50,000 non Ford cutomer ebuine: Digital Trend Multi-channel Integration New age and internet - avvy cutomer today, are expecting a eamle hopping experience irrepective of the channel they chooe. Conolidation/ Internationalization Companie are conolidating their web platform to provide the ame online experience to cutomer, by tandardizing their webite content and deign. The Digital Conumer howing interet in buying the new Fieta. Social Commerce Cutomer are actively communicating via review, blog and ocial media ite - uch a Facebook, Twitter and Youtube, to hare product/ ervice information. Figure-1 Long Tail & Marketplace The market i moving away from big hit that have dominated traditional retail, toward cutomized product categorie that, when aggregated, contitute a ubtantial chunk of the revenue. E.g. branded auto apparel.

3 2. Long Tail and Marketplace 2 : Niche product egment when aggregated, contitute a ubtantial chunk of the buine. Recognizing thi fact, BMW ha enabled the conumer to buy original acceorie on a eparate ecommerce ite. Another example of a bold ebuine initiative in the auto egment would be the GM & ebay tieup to auction GM car in the California region for a limited time. The conumer can bid for the car of their choice on ebay, though the actual exchange take place offline. 3. Conolidation and Internationalization 3 : French car maker Renault ha conolidated and treamlined it online preence by offering imilar web experience to their conumer in different countrie. GM homepage i deigned to make it eay for the cutomer to navigate acro the GM online world (Country webite, product webite, ocial media preence, etc.). 4. Multi-Channel Integration 4 : A cutomer are becoming progreively aware and internet-avvy, they are expecting a eamle experience acro channel (webite, mobile, ocial media, and dealerhip) that they elect to purchae product or view information. For example: Nian developed an iphone app. for a Car 2.0 concept that allow uer to connect, via iphone, to Nian global data center to view information about their vehicle - uch a it battery charging, air conditioning, and heating. Indutry Ranking in Term of Conumer Engagement 5 Figur e-2 Low E ngagemen t H ig h E ngagemen t One Channel Media (6) Retail (8) Leiure (5) Conumer Bu Service (3) Electronic (7) Conumer Product (12) Foo d&bev (11) Apparel (7) Financial (13) Auto (12) Manufacturing (4) Technology (12) Many Channel Footnote: The number in bracket indicate the no. of companie urveyed/reearched. ebuine and the Auto Indutry Car are indicator of peronality, tatement of peronal tyle, ubject of interet, object of paion, and one of the mot reearched topic on the Internet. With over 75% conumer logging-in before purchaing a car, it i difficult for any auto OEM to achieve continued Yearon-Year (YOY) growth without getting it ebuine trategy right. Some Fortune 500 companie have dedicated a much a 50% of their marketing pend to the digital medium and the reult have been quite encouraging. Auto OEM are deploying a hot of e-buine tool - uch a webite feature, digital content, mobility, ocial media and gaming - at every tage of the cutomer lifecycle Initiate, Acquire, Maintain, Extend - to augment the convenience and interet of the cutomer, thereby booting ale and loyalty.

4 While ome OEM have hown the way in adopting and integrating e-buine enabler in their overall trategy, the auto Indutry till ha ome way to go. A hown Figure 2 (Source: ), the auto indutry i average, at bet, when it come to online conumer engagement and there i a lot that it could learn from, for intance, the technology ector. The Infoy Automotive ebuine Maturity Model an aide to crafting an effective ebuine trategy by mapping the preent and charting the future. So, are we talking about fad or fact? Infoy ha taken a buine-centric approach by conidering all the relevant buine activitie of cutomer life cycle, then applying the key ebuine enabler to all the activitie and creating a maturity model. Thi proce i depicted in Figure 3. Criteria for Aement of the Automotive Indutry Figur e - 3 Extend Initiate Get conumer feedback Enure loyalty Drive exchange campaign Launch a new product Manage brand Generate interet to buy Li fe c Gaming yc le itie tiv L if ec ac yc le ac t itie iv Digital content ble r e B u ine Mobility e En na ble r eb u in tie tivi E L ife c y cl e a c tiv itie e B u i ne OEM webite feature a ble r eb u in le r ab e En a En c fe Li y ac c le Ecommerce Dealer Enablement NEWS Social media Maintain Sell acceorie Service vehicle Enable elfervice of vehicle Acquire Certify ued vehicle Finance vehicle Inure vehicle

5 Maturity Level (depicted in figure 4) are aigned to individual lifecycle marketing activitie, baed on the level of effective uage of the enabler. Maturity Model Overview Figure-4 Lagging Minimum capability to meet cutomer expectation. OEM need to rework their approach, unle there i a cot contraint. Maintream Average capability to meet cutomer expectation. OEM match their competitor and provide an 'at par' experience. Leading Above average capability to meet cutomer expectation.oemare uing e-buine trategy to provide clear differentiation to cutomer. Pioneering Outtanding capabilityto meet cutomer expectation.oemare uing ebuine efficiently to gain competitive advantage. The Infoy Automotive ebuine Maturity Model i a tool deigned to ae the automotive ebuine competitive poition of an OEM, identify opportunitie for differentiation and build a roadmap for future capabilitie. A depicted in figure 5, the approach to evaluate and create an automotive ebuine trategy i briefly decribed a follow: 1. Multiple enabler can be ued for each activity, within each phae of the cutomer life cycle. 2. Depending on the maturity or effectivene of the way an enabler i ued, the auto OEM lifecycle activitie are aigned a rating of pioneering, leading, maintream or lagging. 3. The enabler for each activity are given ome weightage and the maturity level are aigned a core (Lagging = 1 and pioneering = 4). Baed on the weighted core average, the overall maturity level of the activity i aigned for the auto OEM. 4. Pioneering initiative ( Benchmark ) - by local a well a global competitor - are mapped, an auto OEM i then compared to them, and the gap i analyzed. 5. A roadmap of initiative i then defined, baed on the gap that are critical to enable an auto OEM to achieve it buine objective. 6. The metric related to the initiative are meaured and bae-lined for Value Realization/Return on Invetment (ROI) calculation and for monitoring the initiative effectivene.

6 OEM Maturity Level Aement Methodology (Illutrative) Figure-5 Marketing Initiative Lagging Main Stream Leading Pioneering Benchmark 1.Launch new product 2.ManageBrand 3.Generate interet to buy 4.Certifyuedvehicle 5.Financevehicle 6.Inure vehicle 7.Sell acceorie,merchandie &apparel 8.Service vehicle 9.Self-ervice vehicle 10.Get cutomer feedback 11.Enure loyalty 12.Drive exchange campaign WebTV channel; product placement in online game 2. Green / Environment ection; External link for new car brand 3. Virtual tet drive; Detailed price/ tech comp with non-oem brand 4. Ability to tranact and purchae vehicle online 5. Pre-approvedfinancing option 6. Online inurance ale; e-brochure for warranty&extended warranty 7. Online ale of merchandie; e-brochure 8. Online pricing/ detail on part and acceorie; SMSvc. reminder 9. Availability of maintenance/ elf helping guiding video 10. Place for cutomer feedback, owner review, and complaint 11. Online car club link;dicount on club memberhip 12. Exchange program advertied online and explained in detail ABC Motor Benchmark Capability Gap Concluion While there are ome bold initiative by ome OEM in the digital pace, o far, none of the OEM eem to have an integrated and eamle approach to ebuine, which i quite evident in the low conumer engagement level (Fig. 2). The Infoy Maturity Model combined with Infoy domain and ebuine expertie in the automotive ector, help develop a cutomer oriented mindet temming from deep ocial interaction and an effective ebuine Strategy. Thi allow the company to identify and meet cutomer need in the marketplace, generating uperior ROI and key differentiation vi-à-vi competition thereby making you ready for the Digital Autobahn.

7 Biography Point of View Author: 1. Sudhir Chaturvedi i the VP and Head in the Manufacturing Buine Unit (Europe) of Infoy. He joined Infoy in the UK, in 1999, a one of the founding member of the European operation. 2. Ruchir Budhwar i the Senior Engagement Manager (Europe Automotive) and one of the initial leader of the Automotive practice in Infoy. He ha been intrumental in tarting new relationhip, a well a managing exiting relationhip in thi ector. 3. Riteh Arora i a Principal (Europe Automotive) with Infoy Conulting and i aligned to the Manufacturing practice. He ha cloe to 14 year of indutry and conulting experience, with major automotive OEM, in the field of automotive retail. 4. Guillaume Vingtier i a Principal Conultant within the Next Generation Commerce practice of Infoy Conulting. He i pecialized in Multi-Channel trategy and integration, with a focu on cutomer experience. Reearch, Analyi & ebuine Maturity Model Team: 1. Steven Lambert i a Partner in Infoy Conulting, with more than 15 year of experience in tranforming Manufacturing companie in Europe, and in the U.S. 2. Amit Handa i a Senior Aociate with the Next Generation Commerce practice at Infoy Conulting. Hi key area of interet and proficiency include Digital marketing, Multi Channel Integration, Channel & Trade marketing and Integrated Marketing & Communication Strategy. 3. Parul Bajaj i an Aociate with the Information & Technology Strategie practice of Infoy Conulting. She hold an MBA from Indian Intitute of Management Bangalore, India.

8 Reference 1. Social Commerce Ford Long tail & marketplace BMW GM (ebay) 3. Conolidation GM Renault 4. Multichannel Nian 5. Indutry Ranking in Term of Conumer Engagement Indutry Channel Score Companie Surveyed Apparel Auto Buine ervice Conumer electronic Financial Food & Beverage Leiure Manufacturing Media Retail Technology For more information, contact infoy@infoy.com For more information, contact aku@infoy.com 2017 Infoy Limited, Bengaluru, India. All Right Reerved. Infoy believe the information in thi document i accurate a of it publication date; uch information i ubject to change without notice. Infoy acknowledge the proprietary right of other companie to the trademark, product name and uch other intellectual property right mentioned in thi document. Except a exprely permitted, neither thi documentation nor any part of it may be reproduced, tored in a retrieval ytem, or tranmitted in any form or by any mean, electronic, mechanical, printing, photocopying, recording or otherwie, without the prior permiion of Infoy Limited and/ or any named intellectual property right holder under thi document. Infoy.com NYSE: INFY Stay Connected