Automaker shift to e-commerce requires behavioural data insights

It started in the UK with BMW back in 2015 and has accelerated through the pandemic; major automakers are increasingly selling cars direct to the public online. Companies such as PSA, Daimler and VW have stepped into the online retail arena and more will follow suit. Yet while this offers huge opportunities, many automakers lack the new toolsets they need to make a real success of this increased investment in online vehicle retail. Selling cars over the internet requires data to understand what individual customers want, and that has to be combined with the ability to interact with them in real-time. This is how online retailers achieve maximum impact and convert as many website visits as possible into sales.

However, automakers have entered online vehicle retail just as big browser companies axe third-party cookies which have been the main source of data to fuel personalisation for years. Once a consumer visits a company’s website, businesses have used a third-party cookie to track their activity across the rest of the internet, building a picture of their preferences, habits, and potential spending power.

Prompted by privacy concerns, Apple and Firefox have already retired third-party cookies on their browsers and Google will do the same next year. Google matters the most because it has 60% of the market. All have acted in the wake of data legislation such as the EU GDPR (General Data Protection Regulation) and the California Consumer Privacy Act (CCPA).

Automakers have entered online vehicle retail just as big browser companies axe third-party cookies which have been the main source of data to fuel personalisation for years

OEMs have always prided themselves on knowing what the market wants, but their strategic shift into selling vehicles direct to the public on the internet could now have a very bumpy ride in the absence of third-party cookies.

New technologies to understand customers and power more effective interactions

Fortunately, new technologies such as real-time customer segmentation, interaction and personalisation have become available to fill the data chasm and provide smarter levels of interaction with consumers. These are AI-driven solutions that provide virtual salespeople to guide consumers towards a purchase, but with as little friction or hectoring as possible. Just as advances in battery technology have enabled the automotive market to become more sustainable at a time of growing climate concern, so real-time segmentation and behavioural tracking solutions give OEMs all the insight and capability they need after third-party cookies.

There are many elements of a vehicle purchase that the consumer can either directly personalise themselves online or indicate as preferences through their behaviour. This is why it is important for manufacturers to use technology to understand website visitors as quickly and comprehensively as possible. For example, most automotive manufacturers have website tools that allow consumers to customise the model they want, selecting an extensive range of specifications from engine size to colour and details of interior trim. Consumers also choose how they will finance the purchase and in many cases, how they will trade in or part-exchange their current vehicle.

Building a picture from behavioural analysis

In segmentation solutions, AI-driven tracking monitors each consumer’s activity in respect of these different elements whenever they visit an automaker’s website. Such solutions deploy a first-party cookie to store just the unique ID of the user and are not affected by the third-party cookie ban or privacy restrictions. This first-party cookie remembers each visitor and their visit. As the visitor moves around the automaker’s website the technology will register the subjects that especially interest them and spot when their behaviour indicates they are close to buying, or, when they are about to leave.

Acting on the technology’s real-time insights, automakers can intervene with a timely recommendation, graphic or notification, increasing the likelihood that a wavering consumer will make a purchase, or at least book a test drive or showroom visit. Any follow-up emails or communications will also be personalised in line with their preferences, making them less easy to dismiss or ignore.

Guiding customers along the sales funnel

Although buying online is far quicker than a forecourt and free from haggling, many customers who visit a manufacturer’s website still want to visit a showroom or dealership to inspect and handle a vehicle before making the final decision. Either way, automakers need to use segmentation and behavioural tracking technology to personalise the experience and ensure the customer is travelling in the right direction towards a sale.

Real-time segmentation and behavioural tracking solutions give OEMs all the insight and capability they need after third-party cookies

Companies can see from the metrics how this type of segmentation and interaction technology raises conversion rates, even if customers opt to buy offline. This is because when customers visit dealerships or automakers’ showrooms for a test drive, the sales staff assisting them are better informed about what they want and aware of any possible barriers to completion of the purchase. The customers themselves also have a much clearer idea of what they are looking for, which saves everybody’s time and increases efficiency.

This is a turning point in automotive sales

Since a vehicle is for most people the next-most expensive purchase after a house, with long payment commitments, it remains a highly considered purchase. Back in 2015, BMW had seen how almost all car-buyers were conducting online research, reducing the number of dealer visits to an average of 1.4 from an average of four less than two decades earlier.

Automotive retail may well have reached another milestone in its evolution. Much will depend on how well an industry that is driven by innovation and customer expectation uses technology to meet the new demands of consumers online. If they are to increase conversions from their websites after the demise of third-party cookies, automakers certainly need more advanced solutions. The online automotive sector is an increasingly sophisticated market where consumers have a great deal of choice and need active, personalised guidance. AI-driven behavioural tracking and real-time segmentation technology will help consumers make the best choice online, personalising their journey towards a purchase. Automakers will achieve far better outcomes as they intervene with the right recommendation at the right time.

Dave Hendry is Regional Sales Director at Fanplayr