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October 06, 2020

Volvo Takes on Automotive Ecommerce

Mike Renaldi
Mike Renaldi
Content Writer at Vaimo
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Unless you are a shoe-selling, car salesman, you might not know that Volvo and Nike share the same direct-to-consumer ambitions for the upcoming decade. Both global firms have accelerated their goal to have 50% of their revenue come from digital sales by 2025. It might sound strange to read about a car company pushing for online sales, but the trends in automotive eCommerce show that Volvo is moving in the right direction.

Volvo Pushes the pedal down on selling cars online.

Volvo is also acting on its automotive eCommerce ambition during the COVID-19 pandemic as customers are buying online at unprecedented levels. According to Automotive World, “Volvo wants 50% of its global volume online by 2025.” Volvo Cars took steps to accomplish this feat by radically changing the way its customers buy, lease, subscribe to, and service its vehicles.

The automotive giant, Volvo, acquired retailers in Sweden to take control of its customer experience. Now, a customer can seamlessly go between channels, whether online or in a physical store. A recent UK statistic showed the importance of online research over going to the dealer: 84% of shoppers do research online for their desired car before buying. Following this trend in automotive eCommerce, Volvo is simplifying a process that car buyers often hate.

In recent years, Tesla altered the age-old mechanism by which people shop for cars. In a 2019 blog post, Tesla gave its reason for selling vehicles online: “Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected.”

Want to sell cars online? Learn more about automotive eCommerce trends here.

Automotive Ecommerce

Where does that 6% decrease come from? Auto manufacturers produce a certain amount of cars annually. And, often, dealers dictate the price by deciding how many cars they can sell. In convincing the dealers, manufacturers lower their prices or avoid sunk costs from overproduction with auto leasing and rental services. Tesla solved this issue of overproduction by eliminating the dealers and streamlining their brand’s connection to its customers.

Now, Volvo can improve their customer experience through a unified online and offline experience. At the same time, carmakers such as Volvo sell directly to the customer and control how their product is bought and sold.

What are the automotive eCommerce benefits?

  1. The COVID-19 pandemic accelerated brand’s direct-to-consumer approach while skipping the painful process of waiting for each customer to adjust.
  2. Volvo has taken ownership of how customers buy its products both online and offline.
  3. Millennials, the largest car-buying demographic, use phones to find a life partner, hail a taxi, meditate, and turn the lights on. What stops them from shopping for a car online? Volvo Cars is adjusting to a client base that goes online for most of their shopping and pre-purchase needs.
  4. In the past, manufacturers sold products through retail distributors and gave away how the product gets into the consumer’s hands. The manufacturer’s reputation was, to some extent, at the mercy of the retailer. At a time when customer experience is everything, this gap in customer interaction is a big vulnerability that manufacturers wish to remedy.
  5. Manufacturers want to be closer to their customers—thereby having greater control in a rapidly-changing and often unpredictable commerce landscape. A direct-to-consumer (D2C) model provides that to manufacturers.
  6. From a customer point of view, eCommerce offers the functionality for the personalised, engaging and easy purchasing experience customers crave. It also allows customers to quickly dive between sales channels—both digital and physical—whenever they want. Modern-day consumers want the flexibility to shop and interact with your brand on their terms, no matter location or time. An eCommerce site allows you to blend the realms of online and offline for a seamless omnichannel experience.

What can you do?

Given the need for meaningful and personalised experiences, this trend is only likely to increase as manufacturers look to forge better relationships with their customers. At Vaimo, we’ve seen a substantial shift over the last couple of years. With our help, several automotive manufacturers have started to plan and execute their D2C business models in reaction to the changing landscape. And more businesses are heading in the same direction to help customers weave between online and physical purchasing experiences.

Click here to learn more about our work with Jaguar. 

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“We simply could not have launched the site in this timescale without Vaimo’s insightful and collaborative approach.“ - Michael Rachlitz, eCommerce manager, Jaguar

About Vaimo

Vaimo is one of the world’s most respected experts in digital commerce. As an omnichannel agency, we deliver strategy, design, development and managed services to brands, retailers, and manufacturers across EMEA, APAC, and North America. Since 2008, Vaimo has delivered 400 commerce solutions and is your full-service partner for success in eCommerce.

To speak with a Vaimo representative, contact us here.