Going Digital First: Digital Acceleration in the Automotive Industry
This is the third part in a series titled ‘Going Digital First’. Check also:
- [Infographic] Going Digital First: Can Banking Thwart the Threat of New Entrants?
- Going Digital First: Modernising Legacy Systems
Digital acceleration is happening across industries at an increasingly rapid pace. But what does this mean for the automotive industry specifically? Disruptive changes in the sector are currently occurring on several fronts — in addition to the development of electric vehicles, connected car technologies, mobility services, and autonomous driving, new business models around selling cars online are increasingly on the agenda of car companies.
The automotive industry has been slower than others in the adoption of digital initiatives. While ecommerce has become the absolute normal in retail, where customers of all demographics often prefer to purchase a variety of different products and services completely online, no longer requiring brick and mortar stores — this hasn’t quite translated to cars, but it’s changing.
More than a buzzword
Perhaps we need to go back a couple of steps. So, is ‘digital first’ merely a buzzword? Likewise, does ‘digital transformation’ have any real meaning? With both terms booming in usage over the last 12 months, these are perfectly valid questions. At risk of becoming another overused corporate buzzword without any tangible meaning, it’s the responsibility of people who write about tech to understand and communicate their respective definitions.
To quote from technology authority Gartner, a benchmark publication — digital transformation “can refer to anything from IT modernisation (such as cloud computing), to digital optimisation, to the creation of new digital business models”. Digital first refers to the practice of putting emphasis on a business model that prioritises digital processes internally and digital offerings externally.
But what does all this mean in the context of original equipment manufacturers (OEMs) and their digital acceleration in the automotive industry?
Since the widespread adoption of mobile phones after the turn of the millennium, increasingly advanced in-car technology has become a staple requirement of the modern car buyer. So, digital acceleration in the automotive industry isn’t exactly a new phenomena. Unlike many other industries, the car industry’s drive toward transformation hasn’t been overtly spurred on by current circumstances. It’s been on the agenda for some time and it’s primarily a result of shifting buying trends. Which, one can observe, have been influenced by the Covid crisis. In the case of the car industry, this has only sped up already observable shifts in consumer behaviour. But what does this actually mean in tangible terms?
Is it just like buying a book?
Many industries have transformed their business models because it’s what customers want — those that haven’t have lost out to new entrants. Disruptive innovators like Amazon have completely changed customer buying expectations — with people expecting total centricity and convenience as a baseline. Buying a car entirely online is still a fairly strange concept to consumers in the UK, for example. However, to put this into perspective, many OEMs — particularly in China and other emerging car markets — have been offering end-to-end purchase options to their customers for some time.
Echoing the trend shifts in China, tech-savvy US customers, accustomed to the service levels of big online retailers, are demanding more innovative features like end-to-end purchase options, all-online documentation, and home delivery. To facilitate digital acceleration in the automotive industry, certain initiatives need to be prioritised.
Read the full article at: https://thescalers.com/going-digital-first-digital-acceleration-in-the-automotive-industry/