Auto Retailing: 2028

What’s happening today hints at tomorrow

What will automotive retailing look like in the next decade? One thing is certain, car shoppers will have different expectations than they have today when it comes to how to shop and buy a vehicle. As consumers see everything they do being made easier and faster through technology, and traditional advertising and marketing losing effectiveness, the auto industry will need to change their approach to getting consumers to choose their products.

There is already change afoot, and we set out to identify significant indicators of what the next 10 years will bring based on the leading edge of today’s automotive retail. What did we learn? Innovation and change is happening at every point along the path to purchase.

Here are five examples that foreshadow what to expect.

Automobile brands will create physical experiences apart from dealerships

Marketing investment in experiences that immerse consumers in the brand’s story and encourage them to touch and feel the product is increasing. Pop-ups and non-traditional locations are the next front-line for new product awareness building and prospecting. Concepts like Volvo’s modular Pop up Cube experiences have the double benefit of being immersive and memorable to the consumer and potentially highly sharable on social media.

Relay Cars’ virtual experiences feature vehicles ranging from exotics to hybrids, to sedans and full-size trucks.

Shoppers will have better ways to narrow their selections before visiting the dealership

Car shopping today begins on the internet, but as convenient and informative as digital resources can be, they have lacked the ability to provide the experience of actually sitting in a vehicle. By providing a more immersive experience, virtual reality promises to close this gap. Relay Cars is a start-up looking to get a lead on providing manufacturers and consumers a one-stop digital destination for virtually experiencing new cars. Virtual reality also promises to enhance the presentation of features and options as the number of players and level of production sophistication increases.

Rockar’s goal was to eliminate the stress and inconvenience of traditional car buying

Consumers will have more convenient ways to buy

There has already been a decade of innovation in pre-owned car retailing. CarMax , EchoPark and Carvana give shoppers a more complete set of digital tools to shop, finance, and buy- integrating the digital and physical retail experience. This model has been slow to hit new car sales but is beginning to take hold with concepts like GM’s Shop Click Drive digital platform which matches buyers with local dealers. The Rockar Jaguar/Land Rover dealership concept in the UK is leading the integration concept by converting the showroom into the culmination of a digital experience where 60% of sales occur online, and salespeople are replaced with customer experience experts they call “Angels”.

The Super Drive Center appeals to potential buyers with Alibaba provided discounts and incentives

Manufacturers will seek new retail partnerships

In an effort to exploit the tremendous consumer traffic that mainstream retail and ecommerce sites offer, manufacturers will look for new relationships that give them access to more buyers. CarSaver, the online pre-owned vehicle shopping site, has partnered with Walmart to bring a physical presence into 250 stores. Many manufacturer brands already exist on Amazon and direct buyers to local dealers, but Ford has gone further with Alibaba in China. Utilizing a smartphone app, shoppers in Guangzhou can schedule test drives with Ford products through a multi-story vending machine

Intersect by Lexus scheduled events include talks, transforming workshops, seminars, and more

Luxury car brands will evolve to be lifestyle brands

The need to be associated with innovation and indulgence through experiences, as well as being associated with a broader luxury lifestyle ethos is driving a new definition of premium. Lexus has embraced this approach with the recent introduction of Intersect by Lexus in Tokyo, Dubai, and soon in New York. Described as “a place where creative minds meet; where inspired people intersect with expressions of food, fashion, design, entertainment and technology to experience amazing.” Intersect, along with the exclusive Lounge by Lexus at the Brussels airport enhance the social status of the Lexus brand.

Today the auto industry, and auto consumer are in transition. Electric vehicles are still a novelty, ride sharing and subscription concepts are reducing the need for car ownership, and autonomous vehicles seem inevitable. But there are over 18,000 dealerships in the US, and last year 17.25 million vehicles were sold, with 2018 estimated to also exceed 17 million. There is a demand for cars that appears not to be slowing anytime soon. And cars are better than ever- with initial quality moving up consistently year over year.

At ChangeUp, our mission is to lead manufacturers and dealers with a vision of what’s next: creating experiences that delight shoppers, strengthen dealers, drive growth, and build brand preference.