December 17, 2020
How Augmented Reality is Driving Change in Car Dealerships
As virtual and augmented reality technologies become more sophisticated, realistic and accessible, do they hold the key to boosting car sales by engaging with potential buyers in new and exciting ways?
AR Technology and Car Showrooms
Whether they are used as a way to add impact and engage with customers in physical showrooms, or enhance online experiences, immersive technologies have the potential to usher in a new digital age for the car showroom. From offering customers innovative ways to explore vehicles in both existing physical and online showrooms, innovations such as augmented and virtual reality can move car retail up a gear.
For broadening customer reach, augmented reality (AR) is a potential gamechanger. Whereas virtual reality takes customers into imagined spaces, augmented reality works by overlaying the real world with digital content. Crucially, AR content doesn’t need expensive hardware as it can be accessed via widely available tech including smartphones and tablets. This offers an attractive business proposition to car retailers, as it gives them the chance to attract and connect with new and existing customers and to make that all important sale.
Supporting online purchasing
“Very forward-thinking dealerships right now are trying to come up with a way to do a complete transaction online without [the buyer] ever even walking into the store.” Andrea Baker, NCM Associates
Consumer behaviour when selecting and buying cars is changing. The Deloitte Disruption in the Automotive Industry: How Digital is Changing Car Sales report highlighted that 84% of potential buyers research cars on their mobile phones, and that the majority would prefer a completely online experience. Augmented reality can help online customers in their purchasing decisions by bringing vehicles to life, taking digital imagery to the next level with realistic, life sized 3D models that can be positioned in the real world, explored in detail and re-visited multiple times without feeling any pressure to buy. Crucially, AR offers buyers the chance to personalise their digital car, so they can visualise exactly what options work for them. Moreover, AR doesn’t just offer stunning visual imagery; factual content such as detailed specifications can be included, giving customers the chance to make informed decisions.
Transforming In-showroom experiences
While online purchases are the preferred choice for many, immersive technologies can also make an impact in real-world showrooms. As consumer behaviour and demographics change, coupled with a fall in car sales, creating innovative spaces that help to engage with potential customers is crucial. While some car brands, such as Audi have opted for VR based in store experiences, augmented reality has a role to play in transforming traditional showrooms. As augmented reality and physical spaces blend seamlessly together, the need for vast car showrooms is significantly reduced. Different features, such as colour of finishes for a model can be overlaid over the same vehicle every time; potentially offering significant cost savings for new car dealerships by allowing them to showcase a large range in a smaller space – and without having to invest in expensive hardware for customers to access content.
Examples of Augmented Reality Being Used in Car Retail
Improving in store customer experiences
Toyota has been making inroads in in-store customer experiences with its Toyota Hybrid AR app that gives potential car buyers the chance to ‘see inside’ its C-HR model across all grades and colours. By overlaying digital content showing the inner workings of the Hybrid drivetrain (the mechanics that transmit power to the driving wheels) onto physical vehicles, customers can gain a better understanding of how the hybrid system works. This, combined with additional in-depth information on key features that are triggered by AR hotspots means that potential buyers are able to make informed purchasing decisions.
Try before you buy from home
The Porsche Mission E app highlights how car retailers can not only show what a car will look like, but how it drives. Through the AR app, potential buyers can personalise the Porsche Mission E model to their own specification, view animations which simulate the vehicle’s aerodynamics, explore the internal drive and battery components as well as taking it on a virtual test drive using the interactive driving mode.
Reaching new audiences through innovative AR marketing
In addition to bespoke apps to showcase models, BMW has also experimented with AR content on Snapchat to expand its potential customer base to reach new and younger audiences. As part of BMW X2’s “Be the one who dares” campaign, Snapchat users can experience a realistic AR version of the car that is placed into their physical surroundings, allowing them to walk around it, view it from all angles and change paint colour.
Moreover, car manufacturers are blending media channels and taking a gamified approach to connecting with potential customers. For example, the Audi Quattro coaster AR app is triggered by specific Audi TV commercials, with digital cars bursting through the TV screens and into people’s front rooms. This allows the cars to be explored in detail, as well as adding an element of play, as the cars can be shrunk to miniature size and raced on a digital Hot Wheels style track.
How Covid Has Changed Car Retail for Good
“Dealers have had to make big changes to survive during the pandemic and adjust to a new retail environment. This means furloughing staff, but also introducing new measures to ensure customers can still get their hands on their next car. Digital transformation has also been vital to maintain engagement with customers and be more resilient in an ever-changing retail world”
Seán Kemple, Managing Director, Close Brothers Motor Finance
In 2020, Covid has impacted on all aspects of our lives, and the retail sector has been hard hit by lockdowns and economic uncertainty. As such, the car retail sector has had to adapt and innovate to address the unique challenges that Covid has brought. This has meant that as face-to-face, in-showroom car purchasing experiences have been restricted, a strong digital and online presence has never been more important, with research from Close Brothers Finance highlighting that 43% of dealers spent time building up the online presence of their dealership during the pandemic in 2020.
But rather than being a significant short term bump in the road for car dealerships, the Covid crisis has acted as a catalyst in accelerating long term consumer trends. As the decision making process for car purchases is increasingly being driven through online channels, augmented reality offers a unique way to take vehicles out of the screen and into our world, bringing the car of our dreams to life before our very eyes.
Interested in introducing immersive technologies into your business?
Contact the Future Visual team for a demo of VISIONxR.