Is Auto Retail Ready for the Internet of Things?

On paper, it sounds amazing: Place a few beacons around a car at a dealership, and create a connection point between the shopper who’s wandering the lot, the car they’re looking over, and a salesperson ready to build a relationship. In a flash, that person is treated to key model features, aftermarket options…not to mention financing and special incentives. The opportunity to actually connect a car to the systems dealers use to market, retail and process a vehicle purchase may well open a new chapter in the online to in-store evolution of automotive retail. It’s beyond RFID codes, and printed brochures. It’s an idea that could re-imagine that initial moment of engagement at the showroom, and help dealers create a more efficient, rich and connected sales experience.

The Internet of Things

But wait – not so fast. Beacons, sensors, gadgets…whatever the name, they’re a part of the Internet of Things, otherwise known as the IoT. According to Webopedia, the IoT “refers to the ever-growing network of physical objects that feature an IP address for Internet connectivity, and the communication that occurs between these objects and other Internet-enabled devices and systems.” A more specific explanation might go something like this: take a car, embed it with a sensor, and enable it to exchange and share information across a network. As a result, you connect the physical and virtual world via a controlled and designed environment. The things that make it happen are very small connectors that use Bluetooth low-energy (BLE) technology to identify the location of a customer and deliver content to them. It works through the use of an app: the signal pings the phone, which pushes the appropriate content based on the location of the person. That creates a more content-rich and private environment, which results in a better consumer experience. The downside, however, is that the customer has to download the app and opt-into the experience.   

Retail Trends

That doesn’t seem to deter major retailers from employing beacons and sensors to more deeply engage with customers. Indeed, according to eMarketer, the use of “proximity marketing” is growing – and fast. The number of beacons deployed by proximity providers has grown from 3.3 million last year to over 8 million in 2016. In a survey conducted by Unacast, “50 percent of organizations connected to the retail, shopping mall, hotel and tourism industries use some form of proximity technology in their marketing efforts.”  Far and away, the most popular device to implement is beacon technology, followed by GPS. Still, though – there are hurdles for all retailers, including automotive. For example, a recent benchmark report by Retail Systems Research found “only 25 percent of respondents had wifi available for employees on the selling floor, and another 19 percent had wireless available for customers.” The study also cast a cautious eye on the issue of consumer privacy in terms of rules, guidelines and opt-in rates.   

The Automotive Internet of Things

Despite the challenges, the automotive industry is applying this technology in literally hundreds of ways, across virtually all aspects of the business. From factory productivity to showrooms, aftermarket and in-car infotainment, sensors that connect vehicles to data and networks are driving a new world order of connected cars and technologies. Gartner, in fact, sees that world growing to 250 million vehicles on the road worldwide by 2020, which adds up to around one-in-five cars. Possible applications run the gamut from enabling urgent medical assistance to advertising, vehicle diagnostics and much, much more.  In its 2016 The Internet of Automotive Things report, eMarketer researchers found that “IoT will give industry marketers more ways to communicate with target audiences, more data to target personalized messaging, valuable feedback about what they are doing right, and more ways to enhance customer service.” On the showroom floor, the technology is steadily gaining more attention. Last year, Ford tested beacons on dealer lots as a way to introduce key features about a specific car. The idea? Create a seamless bridge from research being done online to the showroom experience – a continuation of the online to in-store evolution of car buying.

Connecting the Experience to the Workflow

It all sounds exciting and promising – but then most new technological advances do at first, right? Sometimes, so called “transformative ideas” end up not being as amazing as initially thought. So it will be interesting to see how this connected reality unfolds at the showroom in terms of actual process, dealer adoption, and engagement. It may be that the use of beacons creates an opportunity for dealers to more closely connect sales workflow to car and customer. It may create a richer, more tightly aligned experience in which the dealer maintains control and is able to provide a flexible and nimble sales experience. Those little beacons might one day make it possible for a vehicle on a test drive to be instantly connected to fundamental aspects of the dealer workflow, easing the path to purchase – and creating a significantly more efficient and customer-focused experience.

There’s no doubt that beacons are connecting the physical world of things to the virtual world of content experiences. The only question is how they will be most effectively used at a dealership fitted with integrated retail systems. After all, one of the most compelling possibilities behind the Internet of Things is that it may create a complete retail journey from start to finish — no matter where you start, engage, or finish the deal.  

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