A fresh look at how cars are made and sold: Volkswagen reloaded

2010/04/14 § Leave a comment


I want to attempt to make a passionate case for the need to rethink the way cars are being sold.

At first sight it may seem a difficult attempt, after all, most people would want to look at their car first and test it. But such was the attitude when it comes to books once upon a time (I remember well), when people claimed that selling books over the net would never work since people would want touch and look into books. Now Amazons book selling business is one of the most profitable business schemes on the web of all times.

What would it take for Volkswagen to start a successful web business for selling freshly build cars?

First of all, VW would not want to go the path of an MSP. As pointed out in the article “What’s your google strategy?” [1], one must keep in mind that for a company like VW an MSP would merely mean to lose control. Car makers do not aim for easy comparison of their products. Cars are very much about image and status, aspects that need individual presentation and plenty of space for marketing to set the emotional surrounding, something an MSP would not offer sufficiently (as one sees when checking the market sites for used cars, like carscout24.de, places that focus on practicality instead of emotionality).

Secondly, VW would have to break away from the typical passive role of a car maker. They would have to break away from the pretty yet deeply boring way they present their product currently on www.vw.de.

Looking at their current website reveals an ancient approach (in terms of web-ages), i.e. using music and movies for setting the vibes. This is fair for the current purposes, but in the future VW should use a more youthful approach. The upcoming generation is used to buying products online, what they demand is the approach they are familiar with in order to have the appropriate setting to stop them from bouncing off the page.

Cars need a novel approach, and while car makers face difficult times, it appears safe to claim that they face tremendous changes. The future for car makers is going to be a difficult one. Future trends may be: 1) the need for cars using less and alternative fuels, 2) cars that allow for more customization and 3) cars that change with the owner.

First: VW might look first to Facebook, for example, establishing groups like “I love my Polo” or similar in order to develop a youthful and playful bonding experience and a platform for identification with the product.

Second: The generation web 2.0 is used to contributing. Allow uploading of videos to the webpage of users who present their experiences or experiments with their cars. Allow for reviews, maybe even a simple rating system (like the Amazon stars). VW has a large fan base and would not have to fear users rating their products. Customize blogs that tell about the products (including poems, holiday trips with your car, etc).

This act of openness would contribute to the attainment of a “cool-status”, needed to sell successfully to the next generation of car owners (now 16-18 years old).

Third: Lean heavily on web apps to bring dimension, functionality and reach. Offer games, tools to customize your (future) car virtually before you decide on a look you want to go for. Include the possibility to choose from different designs and allow for a large range of customization. Generation Web 2.0 is used to choose their application “skins”. VW must offer car-“skins”, fresh, maybe even totally user-customized designs for the look of their cars.

Fourth: Following Apple’s scheme VW should abolish all retailer shops and build individual “experience lounges”, where potential customers can go to test and drive their product of interest. By doing so VW would set a completely new customer experience, just as apple has done for its products. Pleasing and modern architectures plus a recognizable firm-specific design in these lounges would have to be achieved and maintained throughout the world.

Fifth: Customers as innovators- Interact. Lend a personal touch by inserting VW company into the social media dialogue through groups, Tweets, etc. More importantly, create a base for “users”, i.e. car owners or interested customers to have their say in the technical development of the products. Expanding on point #3 customers may even post suggestions for design of future models. One can even imagine a product that can be altered, possibly a modularized product that allows the customer to select from predesigned shapes and functional units.

This fifth point, that heavily leans on the suggestion of the paper “Customers as Innovators” [2] is in my mind the most exciting of the points above. While the paper mentioned bases its argument mostly on the advantage for software development the development of economical and ecological cars for the next generation is a real challenge. Attempts to introduce ecologically friendly cars (like the VW Lupo, which did not enjoy much success, despite its low fuel consumption) have often failed due to a lack in customer acceptance. An approach that integrates the consumer ideas already in the development phase, instead of testing a product when it is ready and finished and especially hard to alter any longer, could contribute to entirely novel product lines.

Sixth: Allow for integration of technology (IT) in the cars equipment. While today’s car makers add on more and more electronics, very little of it is showing a serious commitment to integrate the car with the electronic entertainment of today. Wireless, web-based upload of music (maybe even sold in cooperation with a music provider like Apple’s itunes store) might be an option just as download of the kilometers driven and the fuel consumed, together with tips how to reduce consumption. Allow for developers (customers) to write software to customize their car interior (screens will substitute the typical gauges for speed and the like, maybe even large parts of the windshield).

In concluding:

Volkswagen must get away from its typical and traditional presentation like web-design moving forward to a dynamic, customer driven, open-minded and future oriented web-based distribution channel. Concomitantly VW must change its traditional distribution channels (resellers) and use it market-force to change the rules of this very traditional industrial sector. VW must strive for the goal to integrate the car and the car making process with the needs, ideas and wishes of a new generation for which hardware and software have become one. Similarly VW must integrate its hardware- the car- with novel aspects of software. The next generation customer expects its hardware to be able to being altered. Hence VW must allow for alteration of its hardware and allow for participation in the process.

Applying this bold as novel approach Volkswagen may develop a gravitational force within the market as Apple did when it revolutionized the way we approached making, marketing and selling computers and its software.

[1] What’s your google strategy?, Hagiu and Yoffie, HBR 04/2009

[2] Customers as innovators, Thomke and Hippel, HBR 04/2002

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