The automotive sector is facing a pivotal year as it gears up to navigate wide-reaching structural changes in the industry, coupled with the challenge of delivering immediate results as supply recovers in a rapidly advancing, complex market. 

In this new normality, joining up the highest quality retail customer experience (CX) across every channel should be considered a fundamental aspect of doing business rather than a competitive advantage in 2023. Here are a few reasons why. 

Essential Omnichannel Retailing

Consumers expect empowerment and demand effective and efficient connected experiences with the ability to create their buying and ownership pathways at every stage of the journey. They also want brands to offer valuable features and attractive benefits in exchange for their custom and ongoing loyalty.

With increasing options now becoming available, customers won’t tolerate having to restart their journey and reset their experience every time they move between online and offline channels. This shift to complicated channel-hopping makes sales more challenging for everyone in the industry, especially those manufacturers adopting the agency distribution model in 2023 or prepping it for 2024. 

The year’s most successful businesses will continue transitioning to a customer-oriented structure while optimizing and supporting multiple sales channels, with the end goal of authentic omnichannel retailing experiences. Automotive players should set the foundation with technology and people, linking them with data and insights to launch “digital dealerships” and position themselves ahead of the competition. 

Adoption of the Agency Model

Following some well-reported delays, many automotive original equipment manufacturers (OEMs) will take on the entire sales journey from their traditional retail partners, resulting in broad implications well beyond any proof of concept already delivered.

The agency model will give OEMs the final say on pricing and ownership of critical data assets and a front-row view of the customer experience, all of which are significant benefits. OEMs will collect information on prospects, keep them engaged, communicate routinely, respond to their requests, and conduct every other task related to pre-sales and after-sales. All of the legwork previously handled by dealerships is now in the OEM’s hands.  

This period of change is likely to define 2023 for many brands, and they must manage these elements with adaptability and flexibility while avoiding potential conflict with long-term retail partners. 

OEMs must take precautions and simplify the process to avoid damaging the customer experience and creating complications. An effective combination of technology and people can ensure that customers enjoy frictionless and personalized omnichannel retailing experiences, rewarding OEMs with better sales conversion and loyalty scores. 

On the other hand, the challenge of the agency model presents dealerships with an opportunity in 2023 to optimize customer operations, reduce internal contact center costs, and refine sales operations around the best retailing practices. 

New Products, Competitors, Demand, and Ownership Options

Some automotive retailers and brands may have lost their agility and hunger after COVID-19, cushioned by the security of limited supply and sky-high used vehicle prices that emerged as a result. Those who continue to operate on cruise control should anticipate a harsh awakening this year.

With more choices than ever before, demand for new ways to buy and consume products is likely to increase significantly. Customers have already begun to adopt new behaviors driven by the rush towards electric vehicles and connected cars. However, many will also face the reality of lower disposable income while brands present them with products they don’t understand or aren’t completely sold on.

New and emerging brands will see this as an opportunity, not a threat in 2023. These challengers, unburdened by legacy systems and thinking, can launch aggressive growth and transformation plans that take full advantage of omnichannel CX, leaving more established players unable to move at the required pace.

Whichever way you look at it, the industry is set for a shake-up this year, so only those who have a firm grip on these key themes and who are prepared for the inevitable market improvements will come out on top. 

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Tony Patterson is Managing Director, Automotive at Concentrix. He has over 20 years of experience helping leading car manufacturers and retailers maximize their online strategies through innovations, best-practice customer experiences, and deployment of people, processes, and technologies.