Despite the consumer’s higher computer literacy, the automotive sector and in particular the aftermarket are struggling to evolve and to offer the market a digital response and a truly omni-channel service. The potential benefits are many and the efforts involved are less onerous than one might think
Maybe one day it will be remembered as the "digital paradox of the automotive industry". According to several experts, however, the digital “arena” is already witnessing a battle for the survival of the species. A battle that could leave many victims on the ground, mostly because consumers are by and large more and more computer literate, while the automotive sector, with its focus on developing new ground-breaking products and sales techniques, is struggling when it comes to transferring the benefits of digital developments into the aftermarket business.
A recent study by MotorK, an Italian company that offers digital services dedicated to the automotive world, together with AsConAuto and Consulta Service Manager, on a panel of 1,000 after-sales operators showed that in Italy, 30% of all garages do not even have a website and, even more alarmingly, one in ten does not even consider it useful. The glass may seem half full if you consider the remaining 70%. However, there is no room for easy enthusiasm: about a third of these companies do not know whether their online space is responsive (i.e. able to automatically adapt to different digital devices) or not. Finally, only 5% of the respondents have a structured website for online sales. The survey, presented at Autopromotec 2019, presents a scenario that is in stark contrast with the rest of the country, where more than 39 million citizens are regular Internet users and about 44% of the population regularly purchases things online. According to the B2C Observatory of the Business School of the Politecnico di Milano, the recent results illustrated during the last Netcomm Forum, show the "relentless" growth of e-commerce channels in Italy. In 2019 digital shopping is expected to exceed 31.5 billion euro, 15% more than in 2018. However, not only products reached new highs (+21% or 18.2 billion euro), but also services (13.3 billion euro, up by 7%). The tendency to develop a large part of one’s shopping experience online is also confirmed when it comes to automotive parts and services. "Data from Google Gearshift 2018 confirm that, since 2016, automotive after-sales online searches have tripled. One in four of these relate to services. Finally, many users are increasingly requesting online quotations and appointments", confirms Tommaso Carboni, MotorK country manager Italy. However, the industry's response to the growing digital demand from motorists does not seem to be in line with demand. "In this sector, efforts have always been focused on selling goods, regardless whether new or second-hand. After-sales services are still considered “second-best”. This also applies when we talk about digital strategies: a lot of energy is spent in selling, leaving aside effective strategies in after-sales service and assistance”. An oversight that could prove rather costly - in the true sense of the word! -, because, even though after-sales generate smaller revenues, it is equally true that margins are all but negligible. Quite the contrary. Winning the trust of a customer during the approximately seven years of ownership, on average, represents more than just an opportunity. It’s a must! "The digital customer journey must be managed throughout the multiple touch-points with the consumer, including service," continues MotorK's country manager. Meaning: It is vital to be digitally in the right place at the right time and give customers the answers they are looking for, transforming the digital journey in a personalized and satisfying experience.
With so many advantages at hand, it is only natural to wonder why are things going so slow: "Costs cannot be the real problem - says Carboni convinced -. The costs involved in a digital upgrade are quite negligible compared to what dealers normally spend on other activities. I think we need to talk of a cultural block”. Large official dealers, on the other hand, are more willing to “digitize” their business, often prodded by the vehicle manufacturer they represent, followed by official after-sales channels and ,but lagging far behind, independent operator who often (but not always) considers these issues far from his real needs and almost inaccessible in relation to the resources at his disposal. "Size does not matter – replies Carboni -. Whether only 2 or 200 clients walk into the workshop each day, the need to approach the market digitally is real and identical for everyone". The so-called "GarageK Method", developed by MotorK, has precisely this goal: "the digital transformation of dealerships and workshops with complete hi-tech solutions that include website, CRM, managing digital investment, support, etc.. Our approach is good for any repair shop. Investments, in fact, are tailor-made around the needs and size of the company”. Which means enriching every workshop not only with technologies, but also digital skills: "Yes and no - says Tommaso Carboni - the digital manager is certainly a becoming a strategically important figure. At the moment, though, only 5% of the businesses considered have actually hired one. For many companies that are starting up, this cost is just unbearable and frankly not even indispensable. They can rely on third party companies that can support them and guide them in the transformation from analogue to digital enterprise. The vital thing here is not to neglect any aspect. A haphazard digital upgrade, besides the cost, really doesn't make any sense".
Vasone (Anfia): the aftermarket must invest in a digital future
A digital upgrade is no longer an option, but a sine qua non condition, without which the survival of many automotive businesses, including after-sales, is no longer guaranteed. Paolo Vasone, coordinator of the aftermarket section of Anfia (the national association for the automotive industry), is convinced of this: "our companies must take a good look at what is happening around them and have the courage to innovate and invest in what can no longer be called the "future", simply because it is already here". Vital in this regard is training. "Too many companies still believe it to be just a cost, while it is an investment”. Multinationals and large distribution groups have, in fact, already understood the need and urgency to focus on new digital skills. "More can and should be done, that is sure" says Paolo Vasone. Anfia, therefore, is working hard to support member companies (more than sixty in Italy) and beyond. "For about three years now, together with MotorK, we have been offering and planning specific training courses for digital managers in the automotive industry".
The Master in Automotive Digital is structured into seven modules, each addressing individual topics (Digital Management, Web Analytics, SEO, Google AdWords, Digital=mobile, Social media and digital reputation, Database & e-mail marketing) and ends with an exam followed by an Automotive Digital Manager (ADM) certification issued by MotorK, and Google Basic issued by Google. The aim of the course is to train managers in the commercial and marketing areas, to take up the digital challenge and take full advantage of the potential benefits offered by the web and its ongoing evolution. To date, a total of twenty-five managers have completed the Anfia’s master.
"Usually most of those attending our courses are young. The average age is between 28 and 40. They have basic skills and a mental predisposition to working with computers - says Paolo Vasone -. However, the most common reactions to the role that a high level and transversal figure such as a digital manager plays in maintaining and developing the business is, surprise! This enthusiasm and massive support we received in the first three editions of this master course convinced us about the benefits of this initiative and we will thus continue to focus on this aspect of training, perhaps encouraging an integrated system approach that, besides appealing slogans, can increase the availability of increasingly valuable professional resources”.
Quattroruote professional: digital technology at the service of car repairs
"Just as accustomed as we are to home-banking, we must also be ready to seize the opportunities offered by digital after-sales channels", says Fabio Uglietti, marketing manager at Quattroruote Professional, which, for about 30 years, has been providing specialized services to professionals in the automotive world.
Over the last five years, Quattroruote Professional's strategy has focused on vehicle repair, focusing heavily on digital purchasing, ordering, spare parts management and cloud solutions (the new paradigm on providing on-demand services offered from a supplier to an end customer through the Internet). "Compared to stand-alone applications installed locally, the cloud offers greater advantages in terms of access to a large updated database, in real time and from any device. It's like having a big hub at your disposal where data can be obtained when needed. This is the case with the Infocar Repair web service management system through which, starting with a vehicle's registration plate, it is possible to trace, in a few seconds, all the technical information needed to carry out any repair work: regular services and checklists, recall campaigns, selection of original and equivalent spare parts, catalogues and spare parts price lists updated in real time. The management system is offered with an annual subscription and, depending on the individual needs of the business, can be integrated with other service packages. Furthermore, Quattroruote Professional develops e-commerce websites or platforms and spare parts management systems, able, if needed to interface with other management systems. "Our goal is to integrate management platforms with digital marketing services”.
As things stand, thousands of aftermarket firms in Italy use Quattroruote Professional platforms. However, as Uglietti admits, the sector is generally slow in accepting this digital transformation and above all, not consistent. "In Italy there are about 45,000 repair businesses and far from identical. Some, too few unfortunately, have realized that they need to evolve and diversify their business. However, the majority is held back by fear and anxiety. Many are no longer earning as they used to, even if there is no shortage of work. However, they lack a true governance by numbers, they are unaware of how much their business costs and they cradle themselves in the illusion that "word of mouth" will always be enough to fill the workshop with new and old clients. Therefore they are unwilling to invest in something they don't think they can or want to manage. Yet this is what the future of self-repair is all about. "It is no coincidence that large networks are waging hefty sums of cash on intense training programmes, or that rentals have, for some years now, been working on ongoing network qualification projects, focusing on organizations with greater potential - concludes Uglietti -. Joining a network in the future, will depend on guaranteeing minimum standards of equipment and skills, even of a digital type".