DIGITAL TRANSFORMATION - OF AUTOMOTIVE RETAIL NETWORKS - MSX International
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Issue 1/2018 DIGITAL TRANSFORMATION OF AUTOMOTIVE RETAIL NETWORKS Page 6 Page 18 Page 34 Digital transformation of “Brick and click” Connecting with the next automotive customer experiences generation Exploring new digital Strategies for converging What resonates with today’s opportunities in a disruptive physical and digital retail youth and tomorrow’s auto market environments buyer?
Editorial
A MESSAGE FROM FRED MINTURN
As previously announced, Patrick Katenkamp has joined MSXI as CEO of Retail
bringing with him a strong background in the digital aspects of automotive
software and automotive industries, Patrick joins MSXI with a proven record
nearly three months ago, he has become well engaged in all aspects of the
FRED MINTURN
Group CEO and Executive Chairman, MSXI
DOWNLOADING DIGITAL
OPPORTUNITIES IN AUTOMOTIVE
which is created by combining the words “mobile and
transformation and disruption, Charlene Li, author of
the groundbreaking, bestseller Groundswell: Winning
, said:
“Transformation and disruption
have something very interesting
in common: they’re both human
issues, both human problems to be PATRICK KATENKAMP
tackled, not technology problems.” CEO MSXI, Retail
Network Solutions
Charlene Li
In this spirit, we will be looking at how digital
Benchmarker is focused as much on the people transformation is changing every aspect of automotive
using digital technologies as on the technologies retail networks – from parts and service to warranty,
put GEN Y and Z under the loop to see what our next
generation customers will be looking for in a driving
become a digital business but to truly move forward,
the digital age: it is no longer just about optimizing
then can we meet the expectations of connected the distribution infrastructure, but about how to
consumers and serve the needs of automated and
2 MSXI Benchmarker - Issue 1/2018
And, of course, we will examine how to use digital
technologies to create new revenue streams and cut
In this issue we take a broader view of how the
automotive business can use digital technology to be
production, distribution, partnerships, and customer
business has primarily been an analog one – based
on handshakes and contracts rather than bits and
technology platforms, the cutting edge of cars today is you can set a path to embrace digital and reimagining
PATRICK KATENKAMP
AGENDA
Editorial
2 Editorial 18 Developing an integrated “brick and
click” customer experience
automotive Increase brand loyalty and revenue by
converging physical and digital retail
4 21 Digital Trends for 2018 environments
22 Retail performance management in a
digital world
Articles
Use big data and digital analytics to
6 Digitalizing is driving exponential
change in the automotive industry
26 uture of eet
Leverage digital to open up new retail
opportunities and partnership models
gives you a competitive advantage
10 Automation and analytics: key
technologies for the digitalized dealer
30 Driving aftermarket parts digitally
Exploit growing opportunities in parts and
decision making reduce costs and increase service in a dynamic market
34 Connecting with the next generation
14 Finetuning the warranty process
What does Gen Z expect from the driving
digitally
experience?
Six steps to digitizing your warranty
management system
3
MICRO
Paid research
92%
Radio
51% of consumers 82% of consumers
Affiliate
Display
Social
Video
Email
TV
Personalized shopping cart say a business needs consult their
recommendations to be phones in a 75%
1,000 store when
available
92% of 750 30 deciding 1,100
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2024
shoppers250 which
500
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825
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75%2017 55%
CROSS 2015 0
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searches 275
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already 41%
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come from
come from consumers 0
2015
2015 21 DIGITAL TRENDS
2016 2017
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would
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is the
product, solutions is expected to
expected
than read reach $6 trillion by
2020
No
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global
Email
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86% of chatbot 75% of more than
executives 200 business executives
claim that 1,000 said AI will be
mobile actively used in
750 1,100
technologies are their businesses
30
Paid research
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Email
TV
500 825
critical to ensuring within the next 75%
a good customer 1,000 250 550
20
750
500 2024 2015 30
275
250
2015 20
0
4 MSXI Benchmarker - Issue 1/2018
10
2015 2016 2017 10 55%
0
2015 20
0
MEASURING
AR & VR ROI
By 2020 both VR
Paid research
Radio
and AR Email delivers
Affiliate
Display
the highest
Social
Video
are expected to
Email
TV
generate
$150 billion
in revenue
1,100
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0 250
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2016 2017 2018 2019
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Instagram users
Jan'17 Apr'17 Sept'17
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(in millions) after 1,100
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% 92%
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Oct'16 Jan'17 Apr'17 Sept'17
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2015 2016 2017 2018 2019
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825
75% 20
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FOR 2018
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COMMERCE UGC ad
1,1001,100
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% of internet users
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0
global mobile
Normal 375
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who use social media to
ad 825
825
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payment
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PRIVACY USER
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22%
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Sources:
5
UGC ad
6 6 MSXI Benchmarker - Issue 1/2018
DIGITALIZING IS DRIVING
EXPONENTIAL CHANGE IN
THE AUTOMOTIVE INDUSTRY
in motion to provide digitally enhanced customer
factory automation, where we have seen levels of
all levels of a retail network to move away from a
century old automotive retail business model, in
By 2020, almost 70% of annual
auto sales will be digitally influenced.
PIETER VAN ROSMALEN
Global Vice President and Chief Product
dealerships to generate revenue and deliver on brand Officer
partnerships with traditional and disruptive external 2018, Pieter van Rosmalen leads a team
focused on two essential activities: Product
to the key trends of digitalization, connected
car, and mobility that are driving change in
What role will disruptor companies play in Retail Network Solutions at MSXI from March
the future? 2011 until 2018 and he previously served as
Vice President Retail Network Solutions for
pvanrosmalen@msxi-euro.com
Strategic partners like MSXI can provide OEMs and
services are on the rise with companies like Car2Go
retail performance and earmarking solutions for
keep pace with particularly in a time where OEMs have
Consumer electronics and online specialists like Apple this as the most exciting change in car history since
and Google are rumored to be exploring ways to transfer
7
Major trends that will effect the auto industry
OMNICHANNEL CONNECTED SHARED MOBILITY AUTONOMOUS ELECTRIC
RETAIL CARS SOLUTIONS CARS CARS
Customer Shared Mobility Autonomous
Connected Electric
Centric Solution
Battle for online Connected cars Changing mobility 2-5% of new 10-15% of vehicles
customers has provide new means needs and mobility vehicles in 2025 will be Battery
emerged, focusing of interaction with behaviour, especially with L4/5 Electric (BEV) in
on creation of an the driver in urban areas autonomous 2025
“outstanding
overall customer Generated data is Transformation from 25-30% L4/L5 in Basis for new
experience” key to Data Analytics OEM to mobility 2035, 8-10 % of which (metropolitan)
and related new provider are L5 business models
Business Models
(e.g. predictive “Car as a Service”
maintenance)
Source: MSXI research
Four steps to leveraging digital to improve mastered the data revolution, technology alone will
your retail organization
the ones who listen to customers and understand their
Step One: Make the automotive industry a “great
the right customer and vehicle data they can be your
attracting top talent with university degrees based on
great salespeople with a lot of experience, but they have Step Four:
have to invest enormous amounts of money in new
using digital technologies and selling mobility service
young talent needs to be convinced that working in to continue to invest in the research, design and
production of new powertrains as well as components
and functions accompanying the rise of digital services
Step Two:
and increase revenues in the future, OEMs will have
to put more emphasis on alternative revenue streams
virtual and augmented reality technology, and online
environment with better, more timely and smarter
are discussed in detail in other articles in this issue of
Step Three:
cases data infrastructures are already in place and
to everyone in their retail organization through
standardization and centralization and making
employee training, and a strategic omnichannel digital
8 MSXI Benchmarker - Issue 1/2018
Digitalization is the biggest technology
transition in history
OEMs have no choice but to embrace their digital
organization to be more digitally competent, the
change among employees by involving them in the
Automotive Digital Retailing
“ Technology is nothing. What's VISION 2020
important is that you have a faith in
people, that they're basically good
and smart, and if you give them Reimagine customer journey from pre-sales
tools, they'll do wonderful things through sales to aftersales.
with them.”
OEMs and ecosystem participants will
develop online and offline touchpoints.
Create an enhanced omni-channel customer
Creating urgency around innovation by building experience.
organization no longer works in isolation but that
Redefine showroom experience focusing on
economics and regional markets (Audi city
concept will not suit for all regions).
At MSXI we are helping many OEMs with concrete Capability building at dealerships – Focus on
solutions such as how to save money by digitalizing front line sales and service followed by
warranty management, how to digitalize technical dealership principals and digital consultants
support, or how to find new ways to do parts leveraging AI, VR, gamification, etc.
We are working with them to eliminate data silos OEMs will build eMarketplaces to retail cars,
between dealers and OEMs so they have a clear view parts and provide service aggregation
platforms.
sharing our expertise and technical tools to enhance
9
AUTOMATION AND ANALYTICS:
KEY TECHNOLOGIES FOR THE
DIGITALIZED DEALER
Digitalization has to extend to the core of
your business
operations from production through to how business Robotics accelerate the transition to lean design
processes by introducing as much automation as
challenge remains being able to continually simplify
and make that technology accessible at all levels of your All binary processes with an established rules base can
previously been stranded inside machines and processes open up new pricing models, KPIs and Service Level
as well as better pinpointing opportunities to automate
for emerging technologies, transformative business
Growing digitalization and
models, and new forms of collaboration internally and advancements in technology will increase
automotive industry investments to
start is understanding what’s going on, what’s available, $82.01 billion by 2020.
10 MSXI Benchmarker - Issue 1/2018Companies that add advanced analytics to the mix can
and better identify potential safety, production or
learning also allow you to identify patterns in data
and processes that are too nuanced for a human to
learning the system will progress its understanding of
“The goal is to turn data into
information, and information
into insight.”
BRENDAN WALSH
Global Vice President and Chief Digital
Officer
Brendan Walsh was named Vice President
a deep understanding of your business processes and and Chief Information Officer at MSXI in
goals and your digital mandate has to connect front
for global information technology strategy
and operations as MSXI continues to
identify means by which technology based
solutions can differentiate the company
in the marketplace, and create value for
reached at bwalsh@msxi.com
11The building blocks of real time customer when they have huge existential competitive threats in
service the realm of customer facing issues like mobility and
Automation and analytics are also the building
blocks of delivering real time services to customers
such as technical help desk services, warranty prior OEMs to change but allow them to build the
advantages of digital advancements into existing
resulting speed and accuracy promises a better
service experience for the customer and a better have a lot of data, they often lack the bandwidth or
relationships between parts and warranty, technical built robotics solutions in warranty that are already
lines of parts and warranty data into our big data
data streams allows planners and analysts to see where solutions – allowing our data scientists to interrogate
data and insights converge, enabling more seamless
combining this data analytics interrogation capability
with data visualization technology to make data
Data Analytics Trends
Hyper Personalisation
Internet of Things (IoT)
DATA Machine
Artificial ANALYTICS Intelligence (MI)
Intelligence (AI)
TRENDS
Augmented Behavioural
Reality Analytics
Journey
Graph
Science
Analytics
Agile Data The Experience
Science Economy
Source: Spring People
12 MSXI Benchmarker - Issue 1/2018Breakdown of automotive OEMs' value pools along the value chain in 2025
Research and development
Use of vehicle usage data for R&D optimization Value potential
from bottom-line
8 effects
(7%)
Procurement¹ $US billions (as share
Advanced spend intelligence of through AI costs in
corresponding part of
22 51 (4%) the value chain)
(15%)
Supply chain management Value potential
Autonomous guided vehicles from top-line
effects
$US billions (as share
of total revenue)
22
(0,9%)
Manufacturing 61 (15%)
In-line quality measurement by vision or sound
9 Part of the value chain
(12%)
Example for optimization
Sales and marketing $US billions (as share of
through AI
Reduction of discounts on vehicle
8
Next-product-to-buy prediction (0,3%)
5 � Includes direct and indirect spend
(5%)
Aftersales and services
Pulling customers to licensed garage for service and spare parts
Assortment and storage level optimization for spare parts
+
17
(19%) ∑ ~ $US 215 bn
Support functions
Automated processing of invoices with natural =9 EBIT percentage points
language processing or an average annual
12 productivity increase of
(0,5%) approximately
Driver/vehicle features 1.3%
Autonomous obstacle avoidance and next-generation navigation
Source: McKinsey
Unlocking the possibilities of automation
and analytics in the future
Looking ahead, OEMs are going to receive more and
that data can be expensive if you don’t know what you
are looking for – and also time intensive at a time when
with no automotive experience can accelerate negative
your KPIs, where the pain points are in your retail
from parts and services or technical support – as well
winners in the market will be those who take advantage
are weak in any one of those areas you can’t unlock
your language to stay on course in a rapidly changing
1314 14 MSXI Benchmarker - Issue 1/2018
FINETUNING THE
WARRANTY PROCESS
DIGITALLY
initiated which included established strategies for
Fully digitalized warranty process
generate up to 60% savings
on operational costs.
Source: MSXI research
MIKAEL WEPSALAINEN
Predictive analytics allow us to mine vehicle and
Global Director Warranty & Technical
driver data for information about early warnings and
Products
information for analyzing failures and contributing Mikael leads the MSXI Warranty and
developing and positioning the full range of
current automotive development towards
digitized warranty processes up and running, OEMs have alongside the organization’s sales and
to embrace business processes that create collaboration operational teams helping them add value
in Gothenburg, Sweden and can be reached
up their organization’s warranty claims processes and at mwepsalainen@msxi-euro.com
Six steps from chaos to competitive 1. Use Robotic Process Automation (RPA) processes
advantage to manage warranty claim assessment as soon as
Warranty claims have impacted OEM revenue between learning technology automatically tells you which
claims can be processed immediately and which claims
15Technology Model
Enhance backlog selection using a dynamically evolving scoring system.
External data sources
to improve selections
OEM Claim MSXI Data
System Warehouse
Machine
Learning &
Monitoring
Scored Claims
Platform
SMART
Backlog
MSXI can supplement
Constantly evolves existing data with
scoring models additional feeds to
Monitors Accuracy deliver an even
Claim Services smarter experience to
(Each service supplies weighted scores)
customers.
Vehicle Claim Flawed
Failure Anomaly Claim
Predictor Detector Warning
Source: MSX International
helps you standardize warranty coverage for any
Warranty bill reduction of 0.5%
2. Act like an insurance company to get warranty
respresent 247M euros.
costs out of the P&L and balance sheet by using
predictive analysis to make a more informed decision Source: MSXI research
about potential repair issues and adjust warranty
to help you predict what warranties you can avoid
with integrating diagnostic data and proactively
3. Manage warranty as part of a total customer use available information, as well as integrate to
experience strategy by mining vehicle and driver data
you advanced warning of imminent repair issues
courtesy call from a dedicated customer care center
4. Reduce repair and servicing times by ensuring
that utilize car history and real time data from the car
5. Predict the impact of warranty/risk decisions by
integrating data across your organization including
the vehicles or components you sell, warranty
terms and condition, spare parts, sales transactions,
purchasing prices, diagnostic guidance, and supplier
6. Involve your dealers in a proactive way by
involving them in the planning process, synergizing
payment processes and automating the decision
process, so they are freed up to handle other
16 MSXI Benchmarker - Issue 1/2018Warranty should be a cornerstone of your standardized digital infrastructure based on predictive
business strategy analytics and capable of managing multiple channels
Sweeping improvements in technology call for a considering the needs of customers and stakeholders
well thought out and implemented digital warranty
that makes the market so complex can also be turned to
in the door – the future of warranty management will
with new types of partners such as phone, internet
Warranty cost % of global revenue
3,0%
2,5%
2,0%
1,5%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Premium Volume USA Volume EU Volume Asia
Source: MSXI research
17DEVELOPING AN INTEGRATED
“BRICK AND CLICK”
CUSTOMER EXPERIENCE
Dealers must become as course of 14 months than customers who used only a
“efficient as Amazon,” as
“enjoyable as Apple.”
A segment of one – building more
personalized offers
Automotive retail has to operate at the speed of
environments is positive for both OEMs including the customer with a high level of understanding of
of these two spaces provides automotive brands with
more granular information about customer behavior Where is the customer in their purchasing journey?
deliver the right message at the right time, in the right
been shown to deliver in terms of increased revenue format with speed and convenience? Given the high
level of competition for customer attention in today’s
digitalized world, relevance has become even more
omnichannel customers spent on average four percent
18 MSXI Benchmarker - Issue 1/2018Securing buyers’
It is crucial to analyze and improve retail network
omnichannel feasability, but because the automotive
landscape today is so complex, it can be hard to actually
“The biggest part of our
digital transformation is
changing the way we think.”
Group CIO at Chubb Group of Insurance Companies
DIRK BOTT
aftersales, between dealer and OEM data pools and
Vice President and Global Account
between print and digital communications in order to
Executive
symbiotic rather than a cannibalistic business approach
In his current role he oversees global sales
and contributes to the growth of large
The OEM dilemma: digital is only one piece OEM key accounts such as BMW, Mercedes,
in the puzzle his over 20 years’ experience, prior to his
roles at European OEMs in Sales, Product,
become myopic – treating customers’ digital experience
be reached at dbott@msxi-euro.com.
strategy that MSXI has been working on with OEMs
revolves around the development of Business and
19Omnichannel experience
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Although about 90 percent of and provides OEMs with a better overview of their
retail purchases still take place
in a physical store, digital now
example, we train national sales companies to better
influences 64 cents of every understand social media and new roles in order to
dollar of those in-store purchases. cascade the OEMs digital strategy to national and
local levels – through a single point of contact at the
And it ensures that your customers are not being
and warranty support, mobility services, express
service, delivery services, online parts ordering
is digital savvy, but at the end of the day, when
customers need real help, they want to be served by
Consolidating every aspect of your omnichannel
customer experience in one dedicated location
maximizes the value of vehicle and customer data
Step out of your comfort zone and
embrace change
and physical assets, since all research shows
that customers want both channels to operate
resources for the development of an omnichannel
strategy? Are you using social media? Is your online
20 MSXI Benchmarker - Issue 1/2018presence integrated with your dealership presence? integration strategy, think about your next customer,
Are you training your people to make use of the Internet
opportunities offered by digitalization? What digital report, she showed that the popularity of
trends are most popular with your customers? Once
to be a clear breakdown of the customer buying
experience, from online to actually selling the car or
Think beyond digital: replace silos with a
vibrant ecosystem
of disruptor companies coming from the digital
Likewise, digital integration will not come out of the
What Digitizing the Retail Environment Enables
OBJECTIVES CONTENT REQUIREMENT CHANNELS CONVERSION TARGETS
Core objectives Visit website, social media
Short text (Twitter,...) accounts
Create brand awareness Visit showroom, venue, etc.
Build brand credibility
Brand visibility Long text (Blog,...)
Email
Sales
Telephone
Images
Strategic Live chat
objectives
Video Social media conversations
Customer service
Prospects Join communities
Leads Audio
Event support
Advocacy
HR/recruitment
CONVERSION PLACES
End destination social
Website Physical locations Contact center
media platform
CONVERSION POINTS
Sale Showroom visit Sales enquiry Audience engagement
Request service Service/repair inquiry Post reach
Submit contact form Warranty inquiry Audience research
Email subscription Technical information Sales (eg. Facebook
Chat Comment, complaint commerce)
Views
ROI
Source: MSX International
2122 MSXI Benchmarker - Issue 1/2018
RETAIL PERFORMANCE
MANAGEMENT IN A DIGITAL
WORLD
Everywhere you turn things are being digitized – how
at the forefront with connected cars and connected
create more engaging and personalized customer
Customers typically switch 4
times between online and offline
channels and want to move
seamlessly among them.
Source: Bain Global Automotive Consumer Survey, 2017
TOM RING
there exists a complex mix of digital data exchanges, Global Director Retail Performance
Management Products
the scene, and both OEMs and dealerships struggle
to balance demands of both the physical world of the function responsible for Product Strategy
data and advanced digital analytics to inform and responsible for providing strategic leadership,
development and execution as well as driving
the implementation of strategic Retail Network
automotive professional with 28 years of
an omnichannel environment spanning multiple
automotive retail experience, including 18
years at senior management and Board level
in national, regional and OEM organizations
insure your car online and have it delivered directly
citizen living in Cologne, Germany – holding an
MBA in business administration and speaking
want less sales and more consultancy services and
tring@msxi-euro.com
23For more than 40% of
customers, friends and More than 60% of
family are most trusted customers decide
brand
influencers in on brand, model
car purchase and price before model
visiting a dealership
price
With only 9 weeks from Offering online purchasing is a
research to purchase, must, more than
time is of the essence 25% of customers
are potential users
Source: Bain Global Automotive Consumer Survey, 2017
Digitalization is revolutionizing automotive
retail
OEMs have traditionally seen themselves as
dealership to establish customer relationships and
now have a bigger role to play in ensuring a positive
customer experience across all communication
processes across their retail network responsible for
implementing strategies for getting closer to their
an automotive chat room – this service will have to
Almost 50% of car buyers
begin online.
Source: Bain Global Automotive Consumer Survey, 2017
If data is the new capital, OEMs are going to have to
Direct sales will change the relationship
is that much of it lies dormant due to data silos or between dealers, OEMs and their customers
of putting it to work and transforming it into insights In the future even more people will bypass dealers
OEMs have already begun the process of ensuring that
future customer and vehicle data stays in their hands,
by renegotiating customer data contracts with their customers indicate a preference for buying their cars
24 MSXI Benchmarker - Issue 1/2018efficiency of dealership operations, whereby the
form of digital process to research their buying business retains a higher percentage of its gross as
compared to peers, leading to an attractive return on
and Machine Learning becomes more accessible, the
next logical step will be to tap into the RPM data
reposition themselves as experts in Mobile as a
Embrace the digital opportunity to boost
models for moving vehicles such as offering vehicle
subscriptions (Cadillac and Porsche are already retail performance
Capturing the opportunities in automotive retail
strategic and conceptual development, as well as
fleet strategies can open up new revenue streams
We support OEMs to create future retail models
that include data management and analytics, retail
initiatives, the topic of another article in this issue
competency training, and solutions for managing
performance is a bit like a roller coaster – closing
Three pillars for successful retail performance
At MSXI we have identified three pillars necessary the ride is to throw yourself into the experience and
for successful retail performance: profit, process and
consistency in all three of these areas, you can With an average of 2.4 dealer
Improved profitability for dealers is measured by visits throughout the buying
calculating when the financial return earned from experience, dealers remain pivotal,
the dealership business is substantially higher than
but their role is changing.
and making the business attractive for the business
Source: Bain Global Automotive Consumer Survey, 2017
Integrated Retail Performance Management Model
SUSTAINABLE
NETWORK PERFORMANCE STRATEGY
BRAND SIGNATURE CUSTOMER CENTRICITY
FINANCIAL OPERATIONAL ORGANIZATIONAL
HEALTH HEALTH HEALTH
ENGAGED, PASSIONATE
IMPROVEMENT
BUSINESS MANAGEMENT PROCESS STANDARDS AND ORGANIZATIONAL DEVELOPMENT
CONTINUOUS
MANAGEMENT
Dealer Profitability JLR Training Academy
Voice of the Customer Management
PEOPLE
Business Intelligence Dealer Management Training
Dealer Process Standards Departmental Manager Training
Process Review and Improvement Frontline Training
DRIVING AN INVESTMENT HIGH QUALITY SUSTAINABLE FOCUS ON COMPETENCE AND
MINDSET PROCESSES CULTURE
ACADEMY ENABLERS – BOG, R&R, HR MANAGEMENT
TRANSFORMED COST STRUCTURE AND BUSINESS EXCELLENCE
Source: MSX International
25FUTURE OF FLEET: OEMS WILL
HAVE TO LIMBER UP TO MEET
NEW CUSTOMER DEMANDS
In Europe, 52% of new well as mature national and/or international retail
vehicles registrations are independent fleet leasing companies, cutting costs,
leasing.
Source: MSXI research
Today’s fleet customer – diverse and
Automotive fleet sales are intersecting with new demanding
We are seeing structural changes in the way vehicles
are procured and used that will dramatically affect
will change every aspect of transportation over the
ensure continued access to today’s fleet customers,
OEMs building a fleet management strategy that OEMs need to develop digitally enabled platforms
includes MaaS in their offering will therefore have to both manage their business and to connect with
the best chance to succeed in a fractured market customers interested in mobility services, rather than
car, sells to dealer, dealer leases to customer no
ownership experience instead of handing the reins
of vehicle and customer data at their fingertips as
26 MSXI Benchmarker - Issue 1/2018“Growing Importance of
usage over ownership.”
MSXI market research has additionally shown that in
ROB VAN RIJSWIJK
Vice President Product Management
of transparency in terms of managing ownership and
Rob leads the MSXI Global Product
Cutting costs and improving operations developing and positioning the full range
deep passion for strategic innovation and he
sophistication and an ecosystem of complete mobility works alongside the organization’s global
account executives, helping them add value
are transforming commercial vehicle operations
in Cologne, Germany and can be reached at
rvanrijswijk@msxi-euro.com
consolidates multiple dealer repair/parts purchases
27convenience and security for company drivers by phones, the customer purchases a licensing fee
eliminating the need for company credit cards or cash rather than a product, and fleet offers can and must
be highly personalized to the needs of the driver or
limits to control repair or service before authorization
since the connected car provides them with a lot of
based support also improves transparency overall –
they can tap into data from partners in order to
MaaS-ive opportunities to improve customer innovations we are seeing around the world in terms
of MaaS in fleet:
loyalty in fleet
Mobility cards allow customer to book, pay and
In the MaaS model, the car is only one piece of a
mobility card)
Operating cost per mile (US)
New EV 4% Usage
New ICE
MaaS
$ 0.34 per mile (ICE Vehicle)
Existing ICE
40% Usage
MaaS
MaaS (pool)
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ICE Internal combustion engine
EV Electric Vehicle (100% electric battery)
MaaS With Autonomous E and V (family usage in each ride)
MaaS (pool) With Autonomous E and V (pool models like Uber pool)
Source: MSX International Research
28 MSXI Benchmarker - Issue 1/2018Trends in UIO distribution (US)
300,0
250,0
200,0
150,0
100,0
50,0
0,0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Individual owner Individual leased MaaS vehicles
True fleet (without private leasing) Other fleet Low mileage/non-used vehicle
Source: MSXI research
telematics are allowing leasing companies to further
the short term customize and individualize their offers to mobility
Smart Mobility offers employees mobility budgets mobility services will also power fleet growth for
to use as they see fit rather than leasing them a
vehicle need to focus more on new business models that
position them as holistic service providers and to
Usage based insurance such as Renault’s partnership
to data privacy but expected to grow
packs
New leasing avenues include private leasing plans
for corporates that do not generate any additional
costs to the company
monitoring and maintenance, driver digital logs,
and intelligent reporting and analysis for fleets
Services)
Key drivers in the fleet and leasing market
supporting the growth of eMobility, many firms are
expected to upgrade their fleet to include more
2930 MSXI Benchmarker - Issue 1/2018
DRIVING AFTERMARKET
PARTS DIGITALLY
have to compete against independent wholesalers
time, consumers and independent repairers have
is a dominant factor here, but price alone will not
technologies are essential to optimizing planning
processes, consolidating consumer and vehicle data to
better understand purchasing behavior, and opening
this article we will examine the changing market and
how OEMs can best plot a strategy to exploit the
ANTHONY BARTLETT
Senior Account Manager
Marketplace providers will
dominate in delivery times and cost;
traditional participants must role within Retail Network Solutions is
Global Subject Matter Expert for wholesale
develop capabilities to compete. parts business, with responsibility both for
existing global OEM programs and wholesale
40 years’ experience within the automotive
industry, his previous roles included being
Choice is driving a dynamic after sales market of Independent Repairers
reached at abartlett@msxi-euro.com.
by consolidating their resources in order to increase
repairers are rapidly being replaced by franchises and
buying groups able to purchase in bulk and pass cost
independent aftermarket parts suppliers are already
also aggregators – online search apps – that allow
31owners, independent repairers, buying groups,
franchises, fleet companies, private fleets, body
shop groups and insurance companies – each of
Disruptive models, mostly driven
by technology and centered around
making B2B trade convenient for
the customer, will emerge as the
winning formula in the future.
consumers to search for the best repairer by entering
already buying online and this continues to grow year a multichannel strategy targeting individually each
on year, as does the growing number of consumers
purchasing their own parts to deliver to their local
other success factor relies on a fundamental shift
from OEMs and dealers seeing independents as
an impact on the market with their highly developed
now, but in the future their involvement will likely
manage customer data to understand what is being
user friendly dashboards that make parts sales data
OEMs have to invest in distribution and available 24/7 help consolidate reporting so that
quality of service OEMs can identify gaps in business and identify
new areas of opportunity for both the competitive
and highly competitive parts segments across all
need to be based on a comprehensive analysis of
the marketplace across the retail network in order
to understand both customer and competitor strategies using CRM technology to understand
Integrated Mobility Management
Convergence of Platforms
eCommerce IAM Parts New Service Digital Connected Service
Models Engagement Repair Marketplaces
Aftersales 2.0 Pillars
32 MSXI Benchmarker - Issue 1/2018OEM Aftersales Transition, Global, 2000-2025
2000 2005 2010 2015 2020 2025
Traditional Aftersales Aftersales 1.0 Aftersales 2.0
Business from scheduled Retain customers in OEM Expanding customer touch
maintenance mostly during channel – extended warranty points – mobile apps and
warranty period periods telematics system, in-vehicle
systems
Major customer touch point Multiple touch points – mobile
Multiple service models –
through telephone alone and email
express service options and
remote servicing
Building long term relation-
Own vehicle brand parts sales ship-loyalty programs, Integrating multiple digital
with premium pricing subscription contracts platforms for parts and service
sales-in-vehicle diagnosis and
Primary revenue generation Compete with national brands sales
through the authorized service in IAM – offering value-line Compete in IAM – offering
centers for parts sales and parts multibrand vehicles parts and
services service
Omnichannel approach – OES,
IAM and eRetail Multiple mobility options such
as car-as-a-service
and identify strategically located dealers and partners
more important and OEMs will have to increase their to be wholesale parts distributors in order to remain
platforms have to be designed using an omnichannel
Back to the future of parts and service
completely change the automotive service and
parts industry but although these vehicles will
independent wholesalers have logistic warehouses
throughout the market with teams of people to years for new mobility solutions to take hold on
a massive level, but the clock is ticking and OEMs
markets may have 300 dealerships or more, it is need to be highly proactive change leaders in this
domain – with innovative new services, premium
33CONNECTING WITH
THE NEXT GENERATION
Loosely defined as those customers currently under Many claimed they would be willing to give up social
20 and the first generation to be born into the
While ownership is viewed as practical than millennials – making decisions on price
less of a necessity, 92% still Surprisingly, unlike millennials, they are not too keen
plan to own a car.
what makes the next generation tick will translate
few areas that will resonate with today’s youth and
if you want to gain the upper hand in connecting to
what promises to be the largest group of automotive
Price, efficiency and product knowledge
If OEMs and dealers get these three things right
they’ve already made a huge leap in the right
34 MSXI Benchmarker - Issue 1/2018dealers are forced to be highly transparent and honest
has a survivalist mentality having been born during
the upper hand, the best deal, the most value for their
Only 26% of Gen Z said they would
want to buy a car online − just over
52% said they would need at least
two test drives before buying a vehicle. DAVID GRAFF
Vice President Sales and Marketing
Retail Network Solutions (RNS) at MSXI in
October 2013 and is responsible for the
company’s sales strategy and execution for
don’t want is to spend three hours repeatedly providing
car on a mobile device and, when ready to purchase, aerospace and technology and can be reached
want a dealer to get them through the process and at dgraff@msxi.com.
and appointment scheduling tools which collect and
35Your customer of tomorrow
How to 81% 92% How to
SELL use social media as a
are ONLINE TALK
to me RESOURCE for new
consumer products on a daily basis to me
ON DEMAND 43%
They expect services to be reactive read their stories on their
and deliver to their location SMARTPHONE
2-4h YOUTUBE/DAY 63%
and less than an hour
prefer REAL PEOPLE
of traditional television
instead of celebs in their ads
TWICE more likely to
make a MOBILE PAYMENT
compared to the
Their 8 sec.
rest of the population ATTENTION SPAN
needs a simple and
fast message
55%
BUY their
clothes
ONLINE 84%
MULTITASK
with an Internet-connected
device while watching TV
Leverage digital to drive up sales and
loyalty
to dealers and it’s critical to establish which one best
72% of Gen Z teens would
rather have a car for a year than use were product feedback and price information will be
social media.
Source: Kelley Blue Book and they will broadcast their potential purchases to
Product knowledge: Practical Gen Z customers will
features, and salespeople need to be well educated at
delivering the right answers using the best technology
likely to know more about a product problem or
correctly, mobile sales tools allow salespeople to use
digital materials to demystify complex technologies –
need to support dealers here with materials that can be
locally adapted while still communicating their brand
are transformed from transportation goods into
telecommunication devices, there are also lot of new
technologies outside the scope of today’s automotive
36 MSXI Benchmarker - Issue 1/2018At a time when we are experiencing a levelling out of (CXO) will be the one to help connect your business,
new car sales we can take heart that the evolutionary positioning your solutions throughout the Gen Z
path that Automotive Retail is on is correct, and will
become more prevalent as Gen Z begins to add to
the developments created out of the demands of Gen
Generation Z will account for
happy to pay less for access rather than more for 40% of all consumers by 2020.
perhaps, your newly hired Chief Experience Officer
Most important components when selecting a vehicle to buy
67% 77%
43%
GAS MILEAGE
49% PRICE
SAFETY
STYLE FEATURES
35%
INFOTAINMENT
27%
ENVIRONMENTALLY
FRIENDLY
23%
BRAND
37Contact Email benchmarker@msxi.com Subscribe to Benchmarker retail activity anywhere in the world are welcome to join the expanding list of email recipients of the biannual editions of the Global Benchmarker by sending their name, designation and business details to benchmarker@msxi.com Editorial Team Pieter van Rosmalen & colleagues pvanrosmalen@msxi-euro.com
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