As recent months have clearly shown, having a strong digital marketing and commerce capability has been one of the defining factors of those organisations that have best coped with the COVID-19 crisis.
This has also proven true among those industries which have been digital laggards, such as automotive sales. For Volkswagen Australia however, customer feedback had consistently pointed to the need to make purchasing a vehicle simpler. And that had, in turn, led the company in 2019 to developing an ecommerce strategy.
April 2020 marked the first time a customer could configure and order a Volkswagen vehicle online. As it turned out, the new functionality launched just in time.
“The digital strategy was always there, and something that we were slowly deploying, but in April we really accelerated our focus,” says Volkswagen Group Australia’s chief customer and marketing officer, Jason Bradshaw. “With our partners, Katzion and DDB, we were really able to fast track our work from our early learnings and create opportunities to bring cars to market sooner.”
Bradshaw says over the past five years, Volkswagen has spoken to around 1 million customers, through its sale and service experience and via focus groups.
“There have been three things that have really come out loudly from our customers,” he tells CMO. “They want it to be simple, they want the retailer to make things happen, and they want to feel valued.”
This has seen Volkswagen take a ‘minimum viable product’ approached to its strategy, building out basic functionality needed to configure and sell a car online, then adding additional capabilities over time, such as the ability to buy a care plan online and check stock across all locations. But in each instance, the desire to provide a simplified experience has reigned supreme.
“We are looking at every part of the consumer’s buying and ownership cycle and asking if there is a natural fit in the digital world,” Bradshaw says. “And if there is, how can we make it a simpler and more convenient process for customers and for our dealer partners to go through.”
Customers have responded positively, with Volkswagen Australia selling out of a limited edition of its 6.1 generation California Beach camper via online sales in less than nine hours. Volkswagen also sold 100 of its recently released T-Roc compact crossover before the car was even available for test drive.
“The sheer fact that we have the capability to sell and service our customers online is what enabled that,” Bradshaw says.
While Volkswagen’s embrace of ecommerce was accelerated by COVID-19, Bradshaw says consumer behaviour was inevitably taking it down this path anyway.
“Over time, we have seen a gradual change in consumers’ willingness to engage in that purchase cycle online,” Bradshaw says. “And we are also starting to see people in their late 30s and 40s who are digital natives become much more open to buying a car online.”
One of the most significant changes has been that the old behaviour of visiting multiple dealers to examine cars and compare deals has all but disappeared, with most buyers only test driving one vehicle before making a decision.
“People are still going to more than one car dealership, but they are doing it all online,” Bradshaw says. “That dealership visit is about closing that deal. With the amount of information available online now available – customers have a wealth of user reviews, they have all of the specs and comparison sheets they could possibly imagine – and so anything we can do to make that end step easier for them is vital.”
Bradshaw was so taken with the success of the ecommerce site, he also signed Volkswagen up to be part of the Click Frenzy online sales event in May.
“Its a little bit left of field for an auto brand to be a part of,” Bradshaw says. “Some of the commentary that came back from customers suggested they thought it would be accessories or merchandise, and then they saw there were time limited offers on a range of vehicles. So we brought customers’ purchases forward by months.
“While we built out the tech quickly, we have great partners and a solid platform. We broke every record we had in terms of onsite simultaneous visitors, and the tech side didn’t skip a beat.”
One factor that has held some automotive manufacturers back from adopting ecommerce has been the need to maintain the faith with dealer partners. Volkswagen has managed this challenge by enabling dealers to embed its ecommerce functionality into their own pages and is also enabling dealers to transact and fulfill the orders. When placing an order, customers are automatically directed to their nearest dealer, although they can override this if they choose.
Bradshaw says the increase in leads being generated through the upgraded site has been pleasing for dealers.
“We have taken the approach that our dealer partners are an integral part of our relationship with customers, and so we hand off the sales process to the dealer to complete,” he says. “Since April, we have connected more Australians with dealers than we have in any other year. In July, we had a 600 per cent year-on-year improvement in the number of potential customers who were connected with a Volkswagen dealership.”
The ecommerce solution will continue to be expanded over time, such as through selling Volkswagen genuine accessories in October. Bradshaw says he has already been impressed by the ability of the site to increase awareness and sales of its Care Plan service offering.
“What that reinforce is our product is right and our pricing is right – we just needed to do a better job of getting it in front of customers,” he says. “A lot of learnings from the online environment are also translating into our broader work around those areas that we need to amplify more to sell the value that comes with the vehicle.”
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