February, March Conferences Set Tone For Year, At Retail
Most people in the business put their retail hat on in early February and they don’t push it to the back of their head until late March — that’s because each year conferences like NADA, the RLA Conference, LINK, eTail West and Shoptalk keep us keenly focused on the latest in retail transformation. And 2023 is not disappointing us, one bit.
The R2 Media team is gearing up for Shoptalk next week at Mandalay Bay in Las Vegas, and we believe there will be more car people attending this year’s event than ever before. The uptick in attendance will be spawned by the industry’s continued move into digital retailing and Ecommerce (it’s interesting that two-to-three years ago many people viewed digital retailing and Ecommerce as one and the same, and today most view them as totally separate channels). With tracks including The New Retail Organization and Meeting Heightened Consumer Expectations kicking off the four-day event, the agenda is packed with content that will help move dealers and dealer groups along, regardless of where they find themselves on the digital retailing journey. We also believe, moving forward, OEMs, including Stellantis, Ford and General Motors, will begin to send larger teams to these retail-oriented events and begin playing much larger roles at them.
With 25% of new car sales expected to occur fully online by 2025, and a whopping one-third to be fully online by 2030, there is no doubt as to why retail transformation is top of mind with everyone on the consumer-facing side of the automotive business today. Dealers see themselves, in a few short years, no longer selling cars, but selling complete car experiences around fulfillment and ownership. So how can dealers morph themselves from sellers of cars to sellers of experiences? To do so, dealers need to, immediately, do two things. First, they need to build customer loyalty around their dealerships, all aspects of the dealership experience. They can no longer be, simply, a conveyor of information on the latest vehicle offers. Second, they need to meet their prospects where they are, with messaging that is tailored to that prospect. That means a household-oriented, Omnichannel-marketing approach that includes a heavy digital video strategy.
Omnichannel digital marketing reverberates in virtually every consumer product and service sector but, in many respects, it has become timely in 2023 most of all for the automotive sector. While linear television (and to some extent print) deservedly remains the backbone for car advertising, industry data shows car buyers turning to digital media in all its forms before choosing a make and model. Google data shows that an astounding 95 percent of car buyers get most of their information from digital sources – and 60 percent of them consume that content through mobile devices. That digital content drives consumer purchase decision funnels to the point where the average car buyer now visits fewer than two dealerships before buying from one of them.
In many respects the car dealership sector has begun to mirror other consumer product categories, particularly electronics. Just as major electronics retailers, such as Best Buy and Walmart have re-invented their businesses – with seamless connections between digital media delivered through a multitude of channels, e-commerce portals, and physical stores – market data strongly suggests that those car dealers that employ similar strategies will increase their reach, their connection (and brand recall) with potential buyers, and their sales closing rates. And they will also meet consumer expectations. To a large degree, the automotive sector is marketing to consumers accustomed to omnichannel digital experiences driven by other consumer products and services. Digital marketing has become an inescapable element for automobile marketing.
Suggesting that change is upon us, this past week we saw a somewhat, major announcement out of the Adobe Summit, the digital experience conference where attendees are presented with solutions for advertising, analytics, marketing, automation, commerce, and managing customer experiences. That announcement, that General Motors will be working with Adobe Experience Cloud to deliver one-to-one personalized interactions at scale for millions of its customers. With an OEM making such a bold move, it makes sense that dealerships are being equally aggressive.