Digital car-buying still needs the human touch

Mercedes expects 25% of its sales to take place online soon, but customers still like to get personal advice

26 July 2019 - 11:38 By Denis Droppa
An emotional moment is created for the customer at the handover of their new vehicle, with an experience that combines lighting, sound and film elements.
An emotional moment is created for the customer at the handover of their new vehicle, with an experience that combines lighting, sound and film elements.
Image: Supplied

As modern cars become ever smarter and more digitised, so too does the way we buy them.

Five years ago the average customer visited a dealership five or six times before a purchase; now it’s an average of 1.4 times, says Selvin Govender, Marketing Director of Mercedes-Benz Cars South Africa. He says car buyers now do about 19 hours of research before walking into a showroom.

To deal with ever more informed and digital-savvy consumers, Mercedes has changed the way it interacts with them and launched its “Best Customer Experience” in 2013 to make access to Mercedes products and services easier.

Much of this has involved bringing the digital revolution to car sales, with Mercedes optimising its online presence and introducing a Mercedes Me app which links customers to all of the company’s products and services.

“Almost everyone owns a smartphone and expects to be connected all the time. Cars today are smartphones on wheels, and the car becomes your personal companion,” said Britta Seeger, board member for Mercedes-Benz Cars Sales & Marketing, at last week’s launch of “Best Customer Experience” 4.0 in The Hague, Netherlands.

She says digitisation makes Mercedes available to customers around the clock. For instance, the Mercedes Me app is linked to the car and notifies an owner when the vehicle’s due for a service. The owner confirms a price, date and time of the service and an online booking is made, all using the app.

In the buying process, the app allows a car to be configured online, and when the aspirant buyer’s ready for a test drive, Mercedes Me reveals where the nearest demo model is and guides the customer to the dealer with a built-in navigation function.

Options such as digital radio and a digital vehicle key can be purchased via the app and automatically downloaded to the car online.

It is personalised for different countries; for example, in China there’s a door-to-door service where the dealer collects the vehicle from the customer for a service, and drops it off again.

Mercedes Me also allows the new A-Class to be shared with friends and family members, with the authorised user opening the vehicle using the app instead of a key.

Mercedes Me, which has a 90% uptake among Mercedes customers and already has 3-million worldwide users, will be further updated in the next few months to bundle the entire spectrum of mobility and connectivity services.

Digital-savvy customers can order and configure their cars online, but most still like to speak to a product specialist and take test drives.
Digital-savvy customers can order and configure their cars online, but most still like to speak to a product specialist and take test drives.
Image: Supplied

“With Best Customer Experience 4.0, we offer our customers a seamless and convenient luxury experience whenever they want to enter into contact with Mercedes-Benz,” says Seeger.

The point of sale is becoming the point of experience, according to Seeger. Pop-up Mercedes stores at shopping malls and other venues bring the brand to where customers are, while dealerships have become more hi-tech and interactive with car information and videos presented on large digital screens.

She says that buying a Mercedes-Benz should become as easy as ordering a book online, and expects that by 2025, 25% of Mercedes’ worldwide sales will take place online.

Among all the digitisation, the human touch remains a core element and most customers — as information-empowered and digital-savvy as they are — still want to speak to a person at the dealership before signing on the dotted line.

“More than 80% of customers would still like to get personal advice and take test drives. Physical sales will continue to be indispensable for us,” says Seeger.

The vast complexity of modern cars has led to dealerships splitting the traditional salesperson’s role into two: dealers now have product specialists who earn fixed salaries and discuss the car’s features with a customer, without any pressure to make the sale like a commission-earning salesman.

Customers are then passed on to the salesman for the wheeling and dealing. Not that there’s much of that, as being able to negotiate a big discount on the dealer floor is a thing of the past in SA.

Mercedes-Benz SA has introduced a new pricing model where the car’s advertised price is already discounted over the manufacturer’s suggested retail price (MSRP). Individual dealers don’t decide their own discounts and the price is centrally set by MBSA which uses algorithms to find a sweet-spot price for a vehicle based on its desirability.

“It’s an intelligent pricing model with a set discount, much like buying online air tickets, and there’s very little room to negotiate on the dealer floor,” says Govender.

Asked how popular this system’s been with customers, Govender says it’s difficult to gauge due to the downturn in SA vehicle sales.

“However, the benefits for MBSA is that we speak with one voice as a brand, and improve resale values. The bigger the discount, the more customers will pay at some point.”

The concept of car ownership is changing too, with the company testing a new concept called Flexperience where customers pay a fixed monthly premium to get access to a range of cars that cater to their changing needs.

For instance, a customer could use a C-Class as their regular day-to-day ride but swap it for a GLC when they need an SUV for a holiday in a game park, or for even for a high-performance AMG model when the adrenaline is ready to flow.