Digital, Electric, & Connected: The changing automotive consumer journey

Altman Solon is the largest global telecommunications, media, and technology consulting firm.  Here we share the results from our bi-annual Auto Tech Survey. Findings show the shifting automotive consumer journey and untapped aftersales opportunities for dealerships in an increasingly digital and electrified landscape. 

Post-pandemic, the automotive sector is showing signs of recovery. In the United States, car purchases and leases are steadily increasing, though sales have yet to return to pre-pandemic levels. Online platforms, which gained prominence during the pandemic, continue to grow, although they currently account for a minority of sales.  

Altman Solon surveyed over 1,400 U.S. and nearly 500 U.K. consumers for our bi-annual Auto Tech Survey and conducted industry interviews with a panel of C-level automotive executives. Findings reveal an increasing reliance on digital channels, particularly in the research and decision-making phases of car buying, as well as new opportunities for aftersales of electric and connected vehicles. 

The role of digital channels in the automotive consumer journey 

Most consumers still prefer to buy cars at physical stores. However, online options are becoming more important. These options include digital marketplaces, automotive original equipment manufacturer (OEM) websites, and even third-party websites. Key findings from the auto tech survey confirm that digital has gained relevance during the initial phases of the purchasing process, notably: 

• Research: Forty-three percent of car buyers in the past two years relied on digital channels during the consideration phase—a 9% increase compared to buyers who purchased a car more than two years ago. 

• Selecting where to buy: Forty-nine percent of recent car buyers used digital channels to decide where to buy their vehicles, marking a 10% growth in this stage of the journey compared to buyers who purchased a car more than two years ago. 

However, findings show that e-commerce platforms still represent only a very small percentage of actual sales, but many dealers expect that to grow significantly in the next five years. Consumers who purchased online cited convenience, price transparency, and ability to avoid sales pressure as the main benefits.  

Pioneers in digital sales models

Trailblazing companies like Tesla have demonstrated the potential of hybrid retail models, blending online sales with a limited number of physical showrooms. Other electric vehicle (EV) manufacturers, such as Rivian and Lucid Motors, are adopting similar strategies. Traditional auto manufacturers are also entering the digital space, as seen with Hyundai's pilot program on Amazon, allowing customers to select and pay for vehicles online. 

Despite growth in online sales, dealer lobbies in the U.S. continue to influence the regulatory landscape, with 23 states restricting or forbidding direct-to-consumer (DTC) auto sales. Even as automobile manufacturers attempt to establish direct-to-consumer platforms, dealers often require these sales to route back through their networks. What's more, consumers are still heavily reliant on brick-and-mortar dealerships, with 70% of consumers purchasing through dealers.   

Dealer management systems (DMS): A cornerstone of digital integration 

A growing share of dealerships and auto manufacturers now rely on a complex auto tech stack to manage each step of what has become an increasingly digital and omnichannel sales cycle. DMS platforms include features like lead generation and management, inventory and parts management, customer information, and aftersales administration. 

In talks with dealers and OEM executives, both groups prioritize DMS integration. They consider customizability a key factor when choosing their point solution providers. As a result, changing providers could prove to be a major undertaking for manufacturers that are locked into their current provider because of the highly customized functions of their tech stack. However, innovative solutions like Tekion are gaining traction with their cloud-based architecture and analytics capabilities, signaling potential disruption in the market. 

Electrification and connectivity: new opportunities in aftersales services 

The rise of EVs and connected automotive vehicles (CAVs) is reshaping aftersales revenue streams. While EVs require less frequent maintenance, their specialized components and software demand premium services. Emerging aftersales services for these vehicles include battery maintenance and management, software management, and hardware repair and replacement. Dealers have an opportunity to gain expertise in CAV and EV maintenance, which can contribute to them locking-in loyalty from buyers.  

Want to learn more about how auto manufacturers and dealers can adapt to the next generation of automotive consumer behavior and vehicles?  Leave your info to download the full report on automotive technology.