Embracing Industry 4.0: How Dealerships Can Leverage AI and Data for Success
In today’s digital age, it’s no surprise that people rely heavily on the internet for shopping, research, and automotive needs. In fact, shoppers visit an average of 4.5 websites before purchasing (Source: Cox). However, it’s important to understand our past, what comes next, and how innovation has expanded the opportunities dealerships have available.
A Brief History
From energy and machine manufacturing shifts to machines and computers, each Industrial Revolution has been marked by massive and rapid innovation and transformation. While there’s some debate on the topic, many believe we’re amidst the fourth Industrial Revolution, Industry 4.0. Whether you have an opinion on the matter or not, if you’re old enough to remember the first personal computers and the early days of dial-up internet, it’s easy to see why people believe we’ve entered a different era entirely.
Source: Medium.com
The first Industrial Revolution and advent of machine manufacturing paved the way for the automotive industry.
- 1706 – Coke smelting invented
- 1765 – Improved steam engine with the invention of the Watt Steam Engine
- 1770 – Spinning Jenny patented
With the second revolution – or the Technological Revolution – the automotive industry was born.
- 1896 – Ford Motor Company builds the first car
- 1898 – First dealership is established
- 1913 – Ford Motor Company develops the assembly line
The third revolution, also known as the “Digital Revolution”, brought about digital transformation: vehicle listings, dealership websites, digital advertising, and more.
- 1980s – Beginnings of database and CRM marketing technology are introduced
- 1997 – Autotrader is founded bringing the first online car shopping site
- 1998 – Cars.com and Dealer.com amplify online listings and dealer websites
- 2000 – Google AdWords (now Google Ads) bringing Search Engine Marketing (SEM)
- 2007 – Facebook Ad Platform releases (now Meta) firmly establishing Social Advertising
Welcome to the Fourth Industrial Revolution, Industry 4.0
According to SAP, “AI is at the heart of the Fourth Industrial Revolution, allowing manufacturers to not only gather all that data but use it – to analyze, predict, understand, and report.” However, like those that preceded, Industry 4.0 isn’t marked by one technology, but several “Disruptive” technologies, each building on advancements in the years prior. At a high-level, the current trend seems to be moving towards greater synergy, connectivity, and integration of –
- People, Technology, and Systems
- Data, Analytics, and AI
Real-world applications: How can dealers get ahead?
Perhaps now more than ever, customer expectations are being shaped outside of automotive. With companies like Amazon and Spotify, consumers have come to expect a personalized, customer-first experience. Fortunately, several technologies only serve dealers in delivering that experience. Rather than explore every possibility, let’s take a closer look at the products/tools/systems that can provide the greatest opportunities to dealers.
Google Analytics 4 (GA4)
Unlike its predecessor (Universal Analytics), GA4 is event-based, offering cross-platform tracking and a more comprehensive understanding of user behavior across websites and apps.
- Google Analytics isn’t new but starting here provides dealers with greater autonomy and an understanding of their data.
- For example, many dealers use multiple third-party tools on their website, but some of these providers don’t pass data through to Google Analytics leading to blind spots that make it difficult to analyze and optimize performance.
- Dealers can benefit greatly by working with their website provider and third-party providers to establish and define “Website Conversions and KPIs[…]”
Customer Data Platforms (CDPs)
CDPs centralize and unify customer data from various sources, creating a single, comprehensive view of each customer that enables personalized marketing, improved customer experiences, and data-driven decision-making.
- CDPs often incorporate additional technologies that can be a powerful addition to dealership’s arsenal, and using one can help “deliver more effective and efficient outcomes for the dealership’s bottom line”.
- Technologies CDPs can include:
- Identity Resolution tracks website activity and matches it to customer records for greater personalization and better customer experiences.
- AI can help identify and target a variety of segments like in-market customers and lapsed service customers.
- Marketing automation technology leverages unified customer data to automate and personalize omnichannel lifecycle communications at scale.
Generative Conversational AI
Generative Conversational AI, a combination of generative and conversational AI, can simulate human conversation and provide content within the interactions.
- Many dealers have been using chatbots and automated phone systems for years. While early versions could only respond to basic inquiries like requests for hours of operation or location/address inquiries, they can now –
- Provide immediate, personalized responses to a variety of customer inquires like vehicle information requests (status/availability, options/packages, photos/walkarounds, pricing, etc.)
- Help dealers improve conversion rates (capture information, schedule appointments)
- Aid in lifecycle management / long-term follow-up (automated check-ins, notify staff members of important info, etc.)
- Other versions found in some CRMs and beyond offer more of a hybrid model, providing customer-facing teams with relevant response templates, inventory recommendations, and suggested “Next Steps”.
Google’s AI Overview
Adopt and Adapt
Adoption doesn’t happen overnight. OEMs and dealerships didn’t immediately invest in websites, digital advertising, auto listings, etc. However, early adopters quickly reaped the rewards– gaining a competitive edge and benefitting from greater efficiencies/productivity, customer engagement and retention, marketing effectiveness, etc. Now, most OEMs mandate, subsidize, or incentivize dealers to use one or more. Likewise, CDPs and AI technologies are on the same course and revolutionizing the car buying and servicing experience. While any investment should be vetted, those who adapt and adopt early on tend to come out ahead.
The auto industry is advancing faster than ever before, from EV’s to instant offers, there has never been more information for and about the customer. Impel’s acquisition of Outsell brings the best CDP and AI technologies together into one organization. With Outsell’s CDP and Impel’s Generative Conversational AI, your dealership will not only be able to keep pace, but excel in an ever-changing market.
Written by Evan Small – Product Marketing Manager