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Porsche has created Porsche Passport, an app-based subscription service that allows subscribers to drive a Porsche of their choosing on-demand for between $2,000/month and $3,000/month.
Porsche has created Porsche Passport, an app-based subscription service that allows subscribers to drive a Porsche of their choosing on-demand for between $2,000/month and $3,000/month.
( Source: Porsche)

Passenger Experience The upshift in customer experience in the new mobility era

Author / Editor: Cate Lawrence / Erika Granath

You might have never considered buying a car from your phone or without visiting a dealership. But the days of trawling through car lots are ending and the industry is changing in response to the interests of digitally native customers. This changes not only the relationship between the dealer and the customers but also the products on offer.

When you consider what industries are experiencing and will further experience future disruption, Automotives, specifically cars, is an industry is one that comes to mind quickly. More people living in urban areas with increased public transport, and the rise of mobility platforms and car-sharing apps mean car ownership is changing. Future dealerships have to contend with car-sharing, subscriptions, autonomous fleet sales and other configurations beyond standard purchases. Further, a car is also a catalyst for a plethora of as-a-service experiences from entertainment to advertising and retail to data monetization—these services may prove more lucrative to the manufacturer and/or dealer than the initial purchase itself.

Future Mobility

SHIFT Mobility is an interactive format that focuses on the mobility of tomorrow and the environments that will change with it.

SHIFT Mobility 2020
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Will current (and post) millennials be carless?

While it's tempting to put forth a future of avocado eating Millenials eschewing car ownership for scooters, research by the National Bureau of Economic Research suggests that this is not entirely accurate as current Millenials "operate under many of the same constraints as prior generations" especially in the US where public transport is disparate and commutes are long.

The future of digital car dealerships is confirmed by Hyundai's decision to roll out its Shopper Assurance program throughout the US.
The future of digital car dealerships is confirmed by Hyundai's decision to roll out its Shopper Assurance program throughout the US.
(Source: Hyundai)

McKinsey & Co suggest that Millennials will represent more than 45 percent of the potential car-buying cohort in 2025—the largest buying demographic. As a consequence, original equipment manufacturers (OEMs) need to accommodate the needs of a customer that lives a reasonable amount of their life digitally, is comfortable with omnichannel marketing and retail, and is accustomed to a seamless digital cashless retail experience.

This is reinforced by Cox Automotive's Car Buyer Journey Study in 2019 which reveals that customers spend 61 percent of their vehicle shopping time online, and the biggest pain point for 64 percent is paperwork. Research by EY showcases an enhanced customer experience that benefits all buyers, not just millennials. This includes online sales portals, vehicle personalization, and in-built features such as easy access to sales information, including financing options—all delivered through a range of mediums including videos, chats, and text.

A New Customer Retail Experience

The future of digital car dealerships is confirmed by Hyundai's decision to roll out its Shopper Assurance program throughout the US. The brand found that logistics such as determining the actual vehicle price, applying for financing, and completing paperwork could take up to 15 hours and was considered a major inconvenience by customers. In response, the Hyundai Shopper Assurance program is designed to streamline the entire process digitally.

Participating dealers have to ensure that their pricing, not just MSRP (Manufacturer Suggested Retail Price) but all relevant incentives and average transaction price estimates are included on the store's website and app, and also available on showroom tools like kiosks and tablets. Customers have the option of a test drive where the dealer brings the car to them instead of having to go to the showroom.

Change your car as often as your Netflix box-set

Several OEMs, including Porsche, have been creating subscription options as an alternative to outright car ownership.
Several OEMs, including Porsche, have been creating subscription options as an alternative to outright car ownership.
(Source: Porsche)

Feeling noncommital? Or like the flexibility to choose between a two-seater and a sedan depending on whether its date night or road trip? Several OEMs have been creating subscription options as an alternative to outright car ownership. Porsche has created Porsche Passport, an app-based subscription service that allows subscribers to drive a Porsche of their choosing on-demand for between $2,000/month and $3,000/month. More recently Nisson has launched Nissan switch, where:

"Your concierge will deliver your Nissan anywhere within the Select Service Area—even right to your door, and help you transfer your things from car to car."

It's currently available in Houston USA. Drivers pay a $495 one-time service fee and can then choose between Select and Premium subscription plans, with a price tag of $699 and $899 per month, respectively. Customers have the option to cancel at any time. The service offers a variety of vehicles including an electric vehicle, sedans, SUVs, trucks and sports cars.

It's clear that to thrive, OEMs and car dealerships need to prioritize the mobility experience beyond the vehicle itself and factor in what an ongoing digital relationship with customers of the future will look like, some of whom will never enter a car dealership. Many car dealers never envisaged a future where drivers would buy a car via Instagram, but the way customers interact with the world is changing, and this extends to how they purchase a car.

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