For an automobile shopper, almost 89% of decision-making is impacted by online research and digital media today. How are brands re-working their strategies to catch up?
With more than 400 million active internet users in the country, digital has changed the way Indians make buying decisions. Take the automobile industry — not too long ago, the purchase funnel started with person to person word-of-mouth/hearsay, going to various dealers, collecting brochures, undergoing test drives and negotiating before purchasing your favourite four-wheeler. Today, research has moved online where feedback and comments are shared and read on social media, and videos on car reviews/car interiors are watched to help one decide which model to buy.
According to The Drive to Decide report by Google India and Kantar TNS in 2017, 89% of Indian car purchases were digitally influenced, up from 75% in 2016. Elaborating on the influence of digital on the path to purchase, the report says that in the last two years, there has been an over two-and-a-half times increase in the number of consumers who are taking only two months to buy a four-wheeler. Furthermore, a joint study by Assocham and KPMG conducted late last year informs that digital ad spends are expected to witness an increase from the current level of `9,800 crore to `13,000 crore by 2018-end.
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With the growth of digitisation in India, a vast majority of the audience set for auto sector brands lives and breathes in the digital world. The result? Car makers are effectively going digital by upgrading car showrooms to include touchscreen product pods, e-brochures and giving online options for customising engines.
Social word-of-mouth is the first touchpoint in the consumer car purchase journey followed by searching for information, progressing to booking test drives on brand websites and eventually deciding to purchase, based on the overall brand experience. The digital platform is emerging as the main driver in the buyer’s decision and if an automobile brand can create a truly personalised online experience, which has already gained much foothold globally, then it can have a buyer hooked for life.
Paving the way
Today, the line between online and offline is blurring with customers no longer differentiating between the digital and physical worlds. “A customer goes through approximately 28 touchpoints before buying a car. Among these, close to 21 are digital and the remaining are physical,” reveals Vivek Srivatsa, head — marketing, PVBU, Tata Motors.
Auto shoppers today are clearly digitally savvy and hence, rely on online research, mobile and video to stay informed rather than visit dealerships. The challenge for marketers is to understand where and how to invest online to feature on a prospective buyer’s list. Automobile companies are thus executing a lot of digital initiatives which are later culminated into physical experiential activities.
For instance, Tata Motors has introduced chat functionality to respond faster to queries received as well as set up virtual showrooms experiences using AR/VR technology which has helped in increasing traction. Adds Srivatsa, “With Hexa, a 360 degree view of the vehicle was built on a 3D graphical engine, and the idea is now being carried to Tigor and Nexon as well.”
Hyundai Motor India’s senior GM and group head — marketing, Puneet Anand feels that the time is ripe as ‘digital India’ is growing incrementally. “At Hyundai, we follow a ‘smart marketing’ strategy and constantly strive to offer unique experiences to our customers adding Brilliant Moments to their lives.” The company has initiatives like its promotional microsite HyBUY, offering customers a unique online buying experience. The initiative achieved the 300 units of online booking target within two weeks of its launch in July, 2017, in addition to over seven lakh HyBUY site visits and 4.9 lakh people reaching out through HyBUY shares on Facebook, as per the company.
“Digital is not a ‘can do’ but a ‘must do’ for the auto sector,” asserts Navin Khemka, managing partner, Wavemaker India while adding that in today’s connected world, every consumer does a lot of research online before making a final decision. Thus, digital plays a very critical role in the entire decision making process.
It is not just automobile companies which are witnessing this change, but achhe din are also on the anvil for portals that sell used cars. “Most buyers on our platform are young millennials in the age group of 20-34 years, who are looking for their first purchase or planning to upgrade to a better vehicle,” says Sunny Kataria, director, auto category, OLX India. Auto is the largest category by user traffic on OLX, generating 45% of the traffic, resulting in 1.6 billion page views per month. In 2016-17, two lakh cars were sold per month of which 65% were hatchbacks, 20% were sedans and 15% from the luxury and SUV segment, according to company data.
Till a few years ago, the average age of a Tata Motors car buyer fell in the 38-40 bracket. Today, 65% of its customers are less than 35 years of age. The company agrees that with creative engagement at its core and a heavier digital tilt, it is witnessing a shift in perception of being a young, cool and aspirational brand. “Our digital budgets have witnessed a growth, from 6-7% earlier to now being a little less than 10% of our spends,” informs Srivatsa.
On traditional media, it is no secret that OOH sees immense investments from the automobile sector. Sanjeev Gupta, MD, Global Advertisers, says, “OOH is a platform that supports digital marketing very strongly.” In the initial stage, most brands work on increasing brand awareness and hence opt for TV, print and outdoor. As the customer moves up the buying ladder, digital becomes critical to reinforce key brand propositions. Since automobile is a high involvement and high value purchase, the role of digital is to help every consumer move on from the consideration stage to the purchase stage.
However, not everything is skid-proof. While digital channels allow for accurate and predictive content targeting to influence consideration, the challenge for the automotive industry will be to adapt, thrive and stay relevant in this environment of flux. Another rough patch is to measure the influence on digital and correct attribution of the same in the sales process.
Also when compared to other markets, digital efforts by Indian automobile makers still lag behind. A research report published in 2017 by Facebook in association with Bain & Company says that Indian auto OEMs are spending a mere 10-11% of their marketing budget on digital, as compared to over 50% in China and more than 25% in Mexico. “A year ago, auto spends were 8% of overall digital advertising spends in India which is expected to go into double digits by end-2018,” points out Varsha Sethia, partner client leadership (digital), Mindshare. “Brands are seeing the benefit in doing aggressive acquisition-led campaigns online which is leading to final conversions of car sales.”
India is the fifth largest automobile market in the world and is expected to be the third largest market by 2020, as per reports. Auto brand launches mean big budgets, so every marketer needs to be equipped with digital strategies for these.