Dealers have traditionally set the tone for the car buying and ownership experience. They’re knowledgeable about local markets, and they know their customers well.

As retail becomes increasingly digital-first, OEMs must take the lead in designing a retail experience that is global, simplified and data-driven. To do so, automakers must understand macro purchasing patterns and changing customer behaviors in order to create a modern retail experience. 

A redesigned retail strategy serves as the backbone for localized retail experiences adapted to fit certain regulations, markets and competitive landscapes. 

For example, local regulations determine the level of dealer involvement in the purchase process. Competitive landscapes determine the appropriate experience customers expect for different vehicle segments and brand-specific value propositions.

Additionally, OEMs with different and/or competing brands under the same portfolio will need to consider service differentiators that define each brand, particularly as these brands work with the same product assets.

Today, few cars are being bought online, and much of the automotive industry is in a phase of speculation. Few examples exist of what the future purchase and ownership experience might look like.

As a result, organizations are looking outside the industry for references to guide their efforts. But these comparisons may not be entirely helpful given the nuances of purchasing a vehicle online.

Most likely, automakers will uncover a third way that’s not yet defined but will be uncovered through data-driven experimentation. This involves a spirit of constantly looking at data and experimenting, without being too absolute in defining new patterns of selling, as the auto industry continues to undergo layers of transformation in the coming months and years.

To deploy a more centralized retail experience, automakers will need to implement technical infrastructure to enable open data sharing between OEMs and dealers. This allows customers to configure, purchase and receive delivery of a car through any combination of online and offline channels.

Adding a layer of predictive intelligence enables OEMs and dealers to anticipate customer needs and reach out to customers proactively with recommendations.

For this new model to work, OEMs must work closely with dealers to define fair incentive models, ensuring that what customers gain in seamless experiences is not lost through dealer attrition.

Prototyping enables teams to see concepts in action, evaluate the complexity of experiences and observe how experiences integrate into existing systems—faster than traditional methods. This learn-by-doing approach facilitates faster decision-making and collaboration across stakeholders and internal silos.

Simplicity is a necessity when consumers must manage complex digital purchases on their own. Prototyping helps OEMs explore ways to simplify the purchase process, for instance, by observing how difficult it is to customize a car across 500 possible configurations.

The move toward simplification in the automotive industry also means avoiding “feature creep.” Too often, when OEMs consider ways to add value, they can become focused on adding layer after layer of features.

The Kano model is a framework for prioritizing features based on consumer demand, which allows OEMs to refine customer journeys based on adding value rather than adding features.

Automakers risk investment in new ways of working. A pilot-led approach can be beneficial to corporations with less agile experience or with less appetite for risk, as quick wins can be achieved within individual units, thus building momentum for a larger agile transformation.

To succeed in retail, automakers must swiftly adopt new mindsets, build dealer relationships and develop ways of working that place customers at the center of transformation efforts. This requires bold leadership and a commitment to reshaping the organization for a new and improved era of customer experience.