We’ve been hearing for a number of years now how technology is reshaping the auto industry, and it’s often in this context: sophisticated, next-gen car features that consumers can clearly see and, most likely, be willing to pay extra for. Think driverless tech, adaptive cruise control, driver fatigue monitoring, predictive maintenance alerts, and more.
Much less discussed, however, is how technology, more specifically AI, is transforming the industry behind the scenes in ways consumers might never realize—namely, how dealers interact with shoppers to help them find their next vehicle. While car buying has traditionally been a less than pleasant experience, recent research reveals that things are changing – for the better.
Cox Automotive’s most recent Car Buyer Journey Study revealed that 74% of all vehicle buyers and 79% of new-vehicle buyers reported elevated satisfaction levels with their dealership experience. In fact, satisfaction with the retail experience among new-vehicle buyers matched an all-time high of 79% in 2023.
So, what accounts for rising satisfaction levels?
What most consumers don’t realize is that dealerships around the globe have been investing in AI-powered technology that is fundamentally transforming their operations and changing the way in which consumers engage with them. Here are five of the most impactful ways that AI is improving the automotive retailing experience:
Personalization on Steroids
Traditionally, dealer websites relied heavily on static content and images of vehicles and features. In contrast, AI-powered systems tailor the entire shopping experience to the individual preferences of each consumer. Whether it’s visually inspecting every aspect of a vehicle’s condition, virtually sitting in the driver’s seat, or receiving personalized vehicle recommendations from a “smart” digital assistant, today’s consumer is able to receive concierge-like service from dealers in the comfort of their own home. And with AI algorithms constantly analyzing shopper interactions in real-time, dealers are able to deliver hyper-personalized content and experiences aligned with the specific desires of each consumer.
Always-On Availability
One of the most revolutionary changes brought about by generative AI is the advent of 24/7 AI-powered assistants. Cox Automotive’s study highlights that many dealerships are integrating AI assistants to handle customer inquiries around the clock. Whether it’s an AI chatbot on a dealer website or an AI copilot responding to email and SMS text inquiries, these systems can address up to 95% of customer questions, ensuring that potential buyers receive accurate and immediate responses even when a dealership is closed. This invaluable support capability increases customer satisfaction and streamlines the sales process by reducing the need for human intervention in routine inquiries.
Increased Consumer Confidence
Purchasing a vehicle represents one of the largest financial transactions that many consumers will ever make in their lifetime. As a result, the risk of making a wrong decision is incredibly high. Thanks to AI’s ability to cut through the informational clutter and deliver content that helps shoppers make better and more informed buying decisions, consumer confidence in the car buying process has never been greater. In addition to streamline the decision-making process, AI is also reducing the time spent purchasing a car, which according to Cox, is one of the major reasons for increased consumer satisfaction.
Contextual Messaging
Because AI systems continuously mine dealership systems and databases, analyzing customer data and behaviors, they are able to understand exactly where in the ownership cycle every customer is at any given time. Armed with this knowledge, dealers are able to deliver well-timed, contextually relevant messages and offers that reduce friction for consumers. Whether it’s a vehicle upgrade offer for an upcoming lease expiration or an inventory arrival alert for a shopper looking for a particular model, AI automation ensures that no customer ever “falls through the cracks” again.
From Transactions to Relationships
Ask any dealership sales rep who their best customers are, and they’ll tell you it’s the people with whom they have established strong relationships. Unfortunately, however, administrative tasks and activities often get in the way of dealership personnel spending quality time with every potential buyer. Thankfully, AI is changing all that by automating routine tasks like confirming inventory availability, providing vehicle details and scheduling appointments. Freed from these administrative and operational burdens, sales reps are now able to spend more time building lasting relationships by not only addressing customer needs today, but also understanding what their needs are over the long term. It’s through these relationships that lasting customer loyalty is formed.
What’s Next?
Even though we’re still in the early innings of AI, the impact that this powerful technology has already had on automotive retailing has been nothing short of remarkable. From personalized marketing and 24/7 support to accelerated buying processes and enhanced customer relationships, AI is fundamentally reshaping how dealers operate.
And there’s more to come.
As more and more dealers adopt the technology and the line between humans and AI copilots blurs even further, the experience of shopping for a car will become so enjoyable that most people will actually look forward to it. Now that’s something to get excited about.
About the Author
Devin Daly is the CEO and Co-Founder of Impel, a leader in AI-powered customer lifecycle management technology and generative AI applications for the automotive industry. He is an accomplished executive and keynote speaker who has been successfully leveraging proprietary data and AI technology for thousands of retailers and equipment makers for more than a decade. His experience in working with thousands of automotive retailers, OEMs and online marketplaces across more than 50 countries over the past 10 years has provided him with unique insight into the challenges facing today’s vehicle sellers and the capabilities needed to succeed in the industry.
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