Zero Friction Future: How auto sector can reduce consumer dropouts

Today’s digitally-aware consumer can buy anything with the tap of a button. While making any purchase, consumers expect their buying journey to be less complicated and speedy, and any additional effort can make them exit the purchase funnel, also known as friction, which is an opportunity lost for companies.

Anything can irk consumers while buying and this leads to friction, such as buffering of a page, filling a long form, switching windows, etc. It, especially, is seen when the purchase is a long-term investment and involves lot of money such as real estate, smartphones and automobiles.

Speaking of automobiles, as per a report by IBEF on automobile sector, India is one of the world’s largest and fastest growing automobile markets with a production of 29 million vehicles in FY18 and an estimated production of about 60 million vehicles by 2022. In this backdrop, companies have to beat competition and ensure a friction-free buying journey for consumers.

Before buying a two-wheeler or a four-wheeler, regarded as high-involvement process, consumers do months of planning, and companies need to catch hold of their interest right from awareness stage and take it forward to consideration, intent and purchase.

As per a report stated-‘Eliminating friction in automobile path to purchase’- by Facebook, KPMG and Nielsen, in the four-wheeler category, friction accounts for 26% of consumer dropouts, and one-third of this is caused by media.

The report also read that in the two-wheeler category, friction accounts for 34% of consumer dropouts, and nearly half of this friction is cause by media.

Clearly, media plays a pivotal role and companies have to be digitally equipped to keep consumers interested and within the buying funnel. For instance, the awareness stage is the first step and any friction, such as non-appealing ads, too many technicalities in information, not taking the interest to the next level, etc. can lead to consumer dropout.

Likewise, if consumers are considering your automobile, he/she will take opinion from peers, go to showrooms for more clarity, check formalities, look for test drives and attractive discounts. It is important to get hold of the consumer at the showroom, as he/she has shown intent, who can be a prospective buyer.

Any friction at this stage, such as inconveniences, bad experience with dealers, payments options and assistance from sales, can repel your consumer at the final buying stage, giving an advantage to the competitors.

Henceforth, correcting the media platform, social media strategy, and dealerships to at least bring the consumer to the intent stage should be given emphasis. As per the report, mobile is expected to influence 8 out of 10 four-wheeler, and 7 out of 10 two-wheeler purchases by 2022 and can reduce friction by 1.2% for the former category.

Also, Facebook is expected to influence nearly one in two purchases of both four-wheelers and two wheelers by 2022.

By just reducing media friction with mobile, brands selling four-wheelers can tap into around one million units of sales opportunity, whereas, it can open 2.6 million units of sales opportunity in two-wheelers category.

So, how to fill in the gaps? Today’s consumer is information hungry and providing more information to the targeted consumers at the awareness stage can result in more engagement. Keep it personalised, non-intrusive and be prepared to resolve queries to convert them into buyers.

For automobiles to images a zero friction future, they will have to re-strategize path to purchase and include consumer-friendly technologies such as AR/VR, consumer analytics through AI, machine learning and personalised offers.

With the increasingly non-linear journey, you can definitely expect a zero friction future.