Porsche-owned consultancy says transition to digital sales model 'irreversible’

MHP, the consultancy owned by Porsche, believes the transition to digital sales models is “irreversible”, but offers a chance to rethink the entire car buying journey.

MHP’s Online Car Sales Benchmark Analysis report has looked at the German market as a case study, which saw online car sales increase by 144% from 2020 to 2023.

It’s not a direct correlation of the UK market and also includes a period of time hugely affected by the Covid-19 pandemic, but still provides some insight into a mature European market.

In 2023, 22% of all persons surveyed in Germany had purchased a vehicle online.

The report said that many established manufacturers and some online retail platforms are still struggling with weaknesses in their digital customer journey.

Florian Langer, partner at MHP, said: “Our study clearly shows that the digital vehicle purchase is much more than a technical challenge – it is an opportunity to rethink the entire customer journey.

“The transition to digital sales models is irreversible.

“Manufacturers and retailers must develop their platforms strategically and align the entire customer journey to the needs of the customer, from the initial contact to vehicle handover, not to mention any aftersales services ... in a consistent way.”

The analysis examines the six crucial phases of the automotive customer journey – from the search for information to the vehicle handover – and provides a detailed evaluation of the status quo in the volume, premium, EV and platform segments.

Conversion drivers show potential for improvement

The Benchmark Analysis makes it clear that traditional manufacturers and retailers frequently fall below the expectations of the customer base.

The report said: “There are clear weaknesses, especially when compared to the new EV providers: many manufacturer websites appear cluttered, technical tools such as vehicle configurators do not work reliably, and the websites are often complicated and difficult for users to navigate.

“Chatbot features and the option for getting in touch are often not implemented adequately, or these are difficult to find.”

 Maurice Tennekes, senior manager in customer experience at MHP explained that the benchmark for the online experience is no longer set by the automobile sector, but by the expectations of conventional e-commerce experiences.

He said: “The customer wants to know what the individual processes before they receive their vehicle look like.

“Here, the following applies: the more they understand exactly what is involved in a digital car sale process, the more confident they feel with their decision to purchase their new vehicle completely online.”

Proposals for action

The 18 experts from the automobile sector surveyed as part of the analysis are in agreement that there is potential for improvement in all phases of the automotive customer journey, especially in the sales consulting and purchase phase.

A frequently cited challenge is the test drive. This is viewed as indispensable, but involves disruption, as it requires switching from the digital journey to the analogue one.

With regard to financing, 17 of the 18 experts surveyed see a backlog of demand.

As well as the in-house banks of the manufacturers, external providers should also be taken into account, as their own group-affiliated banks (captive banks) often do not offer the best terms, which leads to potential buyers losing interest in the purchase.

In summary, the Online Car Sales Benchmark Analysis from MHP results in the following proposals for action for an optimised online customer journey

• Ensure technical excellence: Vehicle configurators and other tools must work perfectly and must make the whole purchase process considerably more straightforward.
• Tailored solutions: Using so-called conversion pathways to focus the process is highly recommended in order to ensure a tailored solution and seamless transitions between the gates.
• Promote transparency: Clear information about prices, financing and processes creates trust and promotes a willingness to purchase.
• Uphold e-commerce standards: The customer journey should meet the high expectations that customers are used to from other sectors in online retail.
• Establish omnichannel strategies: Shaping the link between online and offline options can also offer real added value – and generate more comfort and customer loyalty.

Clemens Kohlsaat, manager and co-lead of the Benchmark Analysis, highlighted: “In order to be successful in digital sales, automobile manufacturers and retailers must align their online strategies to the needs of their customers in a consistent way.

“Only those who test and validate the online journey with customers on a continuous basis can close the gap between the automotive online experience and the high expectations of the e-commerce experience, and thus remain competitive in the long term.”