How BMW Accelerated Its Digital Journey to Boost Customer Base

German luxury carmaker BMW reported its best-ever sales numbers in the fourth quarter of 2020 and with the marque expecting 25% of revenue to come from online car sales over the next few years, BMW is building on its strong position to accelerate its digital journey.

“New players who are entering our markets are building digital-first journeys,” said BMW Group senior vice-president, customer and Brand BMW, Dr Jens Thiemer. “It’s important that as a car manufacturer with a legacy of 100 years, we are offering that possibility to consumers who are ready to purchase cars online.”

Addressing the virtual audience at Adobe Summit: The Digital Experience Conference, Thiemer said the brand has to be ready to meet the expectations of a growing segment of buyers who are “more informed and seeking personalised experiences and innovative mobility solutions.”

Building digital journeys and strengthening phygital experiences

The automotive industry is evolving and even as sales at physical dealerships are dropping, the online car market is growing.

The global online car buying market, valued at US$237.93 billion in 2020, is projected to reach US$722.79 billion by 2030, according to Allied Market Research. From 2021 to 2030, the market is expected to grow at a compound annual growth rate of 12.2%.

For automotive players, the online car sales trend has become more pronounced following COVID-19. Long pandemic-led lockdowns, the closure of physical dealerships and safety concerns together contributed to changing consumer behaviour and growing preference for digital and contactless buying journeys.

The data coming in from BMW retail partners shows that customers want simple, faster and individualised buyer experiences.

“Our understanding is that we have to set up phygital experiences building on the strengths of our physical network. But, additionally and in parallel, the brand has to offer consumers complete digital journeys,” said Thiemer.

Redefining the buyer experience

Consumers are buying and using their vehicles differently today from how they did in the past.

BMW has identified three big shifts in car buyer preferences.

1. Connectivity plays an increasingly important role for car buyers, in addition to the actual driving experience.
2. Customers are not only seeking vehicles powered by digital technology but expect the brand of their choice to extend personally tailored options for the vehicle purchase and use phase.
3. With changing mobility needs, consumers want their vehicles to adapt and grow with hardware and software upgrades.

For buyers, it’s not just a car, premium or luxury, which defines the customer experience – there’s more to car buying besides the product design and features.

“It’s the entire buyer journey that defines consumer experience. It matters how a consumer is treated, even before the awareness phase, during the purchase phase, and in the usage phase of the car, by a brand,” noted Thiemer.

Driving the entire purchase and experience cycle

BMW is breaking through silos and moving away from vertical thinking and decision making.

Taking the responsibility for the entire customer journey, the brand is reinventing internal and external workflows and digitising all touchpoints to support:

• Vehicle purchases from a single source: The COVID-19 outbreak saw BMW build a contactless sales process. Retailers assisted buyers in configuring vehicles virtually using a shared screen or by giving buyers a virtual tour of the cars the dealership had in stock. Building further on this experience, BMW is working with its partners to enable customers to receive tailored offerings from a single source with dealerships, omnichannel and digital.
• Selling online through high-traffic websites: Having launched a contactless sales process in 60-plus markets during the pandemic, BMW is working alongside retailers to expand online sales through its high traffic websites.
• Creating value for consumers with functions on demand: BMW is offering consumers a slew of value add-on services to help them personalise their vehicles. It is looking to engage consumers with not just physical but software upgrades as well. “We are offering customers a bunch of functions on demand and digital subscription models to make buyers’ experience with a car even better. That’s building a relationship and keeping your car fresh,” said Thiemer.

BMW expects vehicle functions after-sale upgrades to contribute significantly to the company’s optional equipment business. It not only sees functions on-demand as a big revenue generator from new cars alone but also from used car buyers or customers who lease or rent their vehicles.

An example of function on demand includes steering wheel heating – a customer driving in sub-zero temperatures will be reminded by the brand’s voice assistant to try out the steering wheel heating free of charge for a trial period. Customers who like the feature can opt for it through a subscription.

Safeguarding consumer data and building digital trust

Customers must trust that buying a car online is safe. So how does a brand build trust in a digital world?

Thiemer recommends brands can take the following steps to protect consumer privacy and assure them of their data safety.

• Deriving first-hand data from the company app, it’s critical for brands to communicate with consumers with transparency as to what end (purpose) their data is being used for.
• Communicate consistently and openly with digital leads (prospects) using available consumer data through direct company platforms and other secure third-party channels.
• Trust plays a huge role within the usage phase of the product. As you (brand) deploy consumer data for driving loyalty and engagement, use the data responsibly without compromising user identity.
• Use trustful technology while dealing with consumer data.

Be it protecting sensitive consumer data or offering seamless digital buying experiences, everything starts and ends with brands being customer-centric, said Thiemer.

Credit: WARC