AWS for Industries

Reinventing automotive sales with AWS

Even before the current pandemic, automotive retail was undergoing a fundamental shift towards a more digital and personalized experience. For years, automotive manufacturers (OEMs) and dealerships have witnessed a decrease in dealership visits and have experimented with new digital experiences and retail formats to counter this trend. In this blog, we will discuss how new digital experiences, holistic customer experience management, and changing business models are driving change within automotive retail, and how AWS is supporting those trends.

While customers make fewer visits to the dealership, the ones that go come better prepared. Studies have shown that the majority of in-market automotive shoppers research brands and models online before ever stepping foot in a dealership. Customers mainly visit the dealership to get their specific questions answered, take a test drive, and get their car delivered. This trend is even stronger in younger generations. With most dealerships geographically located in industrial areas with minimal foot traffic, automotive companies must reinvent automotive retail to attract customers. Continue reading this blog to learn about the three trends that are driving automotive sales transformation.

Enabling online sales experiences

With many customers doing research online, it is essential for automotive companies to offer rich online experiences to present their product and convey their brand experience to potential buyers. Most manufacturers and retailers are building capabilities to offer photo realistic high definition virtual representation of their cars on their website. However, offering 3D visualization and high-quality renderings requires deep expertise in rendering technologies and significant compute power. That is why leading OEMs like Audi and Lucid are leveraging AWS Partner ZeroLight’s cloud based rendering expertise for their online experiences. Leading the way, Lucid planned a virtual launch for their flagship vehicle, the Lucid Air. ZeroLight built the company a website to facilitate customer engagement and mimic the in-person shopping experience.

Lucid created a shared configuration solution that digitally mirrors the luxury one-to-one Studio experience, enabling customers to enjoy it either online or in-store. Powered by ZeroLight’s concierge product, Lucid Live Studio uses the agility of Amazon EC2 G4 instances to create a luxury virtual sales session. A customer can interact with a digital model of the Lucid Air from the comfort of their home while a sales representative guides them through its key features and configuration options. Because this is all powered by the cloud, no screen sharing downloads, or plugins are required, allowing for a seamless customer experience.

When Lucid evaluated more than 436,000 sessions on their website to compare their 3D configurator vs. an image-based experience, they saw a 46% increase in car reservations from visitors who engaged with the fully interactive configurator.

For established OEMs, moving the sales process online is still a challenge, but when the current pandemic forced car dealerships across Europe to close, Audi launched an online vehicle reservation on AWS in just 6 weeks in multiple countries. Audi achieved this timeline by leveraging AWS serverless services like AWS Lambda, allowing software developers to focus on the business challenges instead of managing IT infrastructure.

Connecting with customers

Traditionally, OEMs have relied on their dealership network to manage the end customer relationships and invested heavily in training sales staff, trying to ensure a consistent brand experience across the network. With customers starting their purchase journey online, OEMs need to develop new capabilities to connect with their customers – but also connect customers with dealerships. Depending on the customer’s questions, the request need to be routed to the customer care center or their local dealerships. OEMs can leverage Amazon Connect, an omnichannel cloud contact center that allows OEM’s, sales organizations, and dealerships to provide superior customer service at a lower cost via e-mail, chat, and phone. Amazon Connect provides the capability to track customer sentiment in real time and allows for advanced analytics across voice and chat interactions to detect patterns in service inquiries, helping to improve customer experience, product, and measure customer satisfaction. Having a comprehensive view of all customer interactions helps OEMs to gain insights into customer touchpoints and monitor service quality. Data from customer interactions can be stored in a central data lake, where it can be combined with data from marketing, sales, and connected car services to deliver personalized experiences. For example, Cox automotive leveraged AWS to deliver more personalized advertising to their customers. By combining data from sources across Cox’s business, Cox is able to create a 360 degree view of the customer, resulting in a more personalized experience and increased customer engagement.

Moving beyond margin pressure

Operating an automotive dealership is rarely a high margin business with most dealerships earning about two percent return on sales. While customers would traditionally shop at their closest dealership now there  is more information readily available online. This means there is an increase in price transparency and usage of independent car brokers, where multiple dealers submit offers to get to the lowest price possible. These biddings eat away dealer’s margins, forcing OEMs to provide financial aid. At the same time, OEMs and dealers rely, for the most part, on Excel spreadsheets and manual process to forecast sales volumes. This makes it difficult to effectively forecast sales volumes for individual models and trims and where it is most efficient to use sales incentives (discounts). With most OEMs spending between 5 and 10 percent of their revenue on sales incentives, it becomes one of the largest levers to pull to drive profitability. AWS has been working with leading OEMs to apply machine learning to more accurately forecast vehicle demand by model and pro-actively manage sales incentives. By bringing together data from more than 10 data sources across sales, marketing, and finance, machine learning on AWS can be used to forecast vehicle demand broken down to trim level, taking into account the proposed sales incentive spend. To dive deeper into machine learning powered automotive sales insights, you can watch our recent automotive news webinar. 

If you would like to discuss how AWS can support your automotive sales transformation, you can contact us.

Learn more about Amazon Connect how AWS Automotive is helping customers transform their digital customer experience.

Related resources:
AWS cloud solutions for automotive