i3 | January 04, 2021

Configurators Evolution

Robert E. Calem

As the car buying process began moving online in the past decade, the “configurator” or “build your own” section of an automaker’s website has become crucial to winning new customers and keeping current ones. Automakers are responding with a technology boost rolling out engaging user interfaces (UIs) and improved backend platforms that make finding and buying a car online both compelling and easier to do.

The trend has accelerated in response to the COVID-19 pandemic that has forced many dealerships to close, spurring even more online transactions. Going forward, artificial intelligence (AI) and virtual reality (VR) will propel it further, analysts say.

Online Outshines In-Person

“The investments car manufacturers are making to improve or enhance their online configurations systems is on trend with the acceleration of digital transformation we’re seeing across the economy this year — especially anything related to consumer retail,” says Steve Koenig, CTA’s vice president of research. “The importance for brands to have an omni-channel strategy including a robust digital presence and direct-to-consumer sales model cannot be understated.”

Additionally, “augmenting the car configuration tool also fits with the trend of mass customization,” Koenig says. “Enhanced digital sales tools, digital showrooms and online buying experiences portend a shift in the business model for car sales. In the next 10 years most car sales will be online in VR showrooms. Dealers will remain in play but will mostly provide last mile delivery in the sale,” he says. “This is already starting to happen with services like TrueCar and Carvana. Over time we’ll see a greater separation of sales and service.” Many shifting business models resulting from the pandemic will remain in place post-crisis, he adds.

According to Cox Automotive — which owns the consumer-oriented car research sites Kelley Blue Book (KBB) and Autotrader as well as supplies the software and services necessary for automobile dealers to run their businesses, and engages in consumer research — time consumers spent searching online has continued to grow, shoppers are visiting fewer dealers, and third-party websites like KBB, Autotrader, cars.com and edmunds.com are the biggest draw for new car shoppers.

Cox’s 2020 Car Buyer Journey (CBJ) study says car shoppers spend 64% of time searching online (about 9.5 hours) and roughly 20% of their time with a dealer on the purchase (two hours and 50 minutes), and the remainder researching other dealerships or offline. In 2019, the CBJ pegged the online component at 61%.

The Cox 2020 CBJ report also finds that car shoppers are now spending less time engaged in the process than three years ago — 89 days “in market” this year versus 118 days in 2017. It attributes the decline to getting information and making decisions faster. When looking to purchase a new car (excluding used car sales), many are using third-party sites (66%), followed by dealer websites (50%) and automaker websites (41%), the 2020 CBJ says.

Nevertheless, recent car shoppers say what they’re doing online still isn’t enough. While 46% of them who shopped during the pandemic completed more steps online than in the past, 68% expressed a desire to do even more purchase steps online, compared to the last time they bought a vehicle, the 2020 CBJ shows. These steps include configuring a vehicle, determining the purchase price for the new car and the trade-in value of a currently owned car, as well as financing.

Amidst the pandemic, Cox debuted new dealer-focused services that enable consumers to shop from home more efficiently — letting dealers offer virtual video walk-arounds of vehicles (through video chats) and arrange at-home test drives and deliveries of new cars to homes. By October there were 13,000 dealers using the services nationwide.

In turn, dealers received 328% more “deals submitted” online in the first nine months of 2020, compared with the same period in 2019, Cox says.

Cost, quality and performance of cars traditionally are the basis of competition in the auto industry, but today all of that is secondary to brand and experience engagement, “and that means technology,” declares Omar Hoda, principal in the automotive sector of Deloitte Consulting in Boston. “The role of technology helping me pick my brand and the role of technology once I’m in my brand are absolutely critical. That has started to put an emphasis on how tools like configurators are increasingly important in the eyes of consumers, and therefore the eyes of dealers and [automakers].”

Pre-pandemic, Hoda adds, configurators were about dreams, “a place to play in an unconstrained environment,” and the vehicles consumers put together there usually bore little resemblance to the cars they ultimately purchased. “As you fast-forward to COVID-19, all of a sudden the role of the configurator has become more grounded in reality” and a lot of work has gone into bridging it to the final sale. This is particularly imperative for emerging companies — such as the startup electric vehicle (EV) makers Lucid Motors and Polestar — that don’t have built-up dealer networks, he says.

More, Hoda adds, technologically advanced configurators serve to form the brand experience and brand identity for consumers. This has led some premium automakers to aggressively explore the role of augmented reality (AR) and virtual reality (VR) in the process, thereby bringing “your vehicle into the home virtually.”

Experiences Matter

“From day one we’ve operated with a focus on who our consumer is going to be — individuals who tend to be really into technology, into a digital existence,” says Derek Jenkins, vice president of design at Lucid, based in Newark, CA. But Lucid also believes the way cars are purchased at dealerships is “quite frankly broken,” and this “led us to what we’ve been calling the digital journey.” It is how a consumer who knows nothing about Lucid can discover and “learn an immense amount about the brand, the product, the people behind the product and then dive deeper into this online configurator, which itself stretches the boundaries of what can be done,” Jenkins explains.

At CES 2020, Jenkins was introduced by an auto industry colleague to ZeroLight, Ltd., a supplier of cloud-based 3D visualization technology that has helped develop configurators and VR shopping experiences for Audi, BMW, Lamborghini, Nissan, Porsche and Volkswagen. From that point the conversation progressed to “how much interaction could we create, how much volumetric feeling could we give to the environment,” he says. “Most configurators today are pretty basic, especially when you compare them to the digital and online experiences we have through gaming. Why is there this tremendous gap between, let’s say, Gran Turismo or Forza when I play online in terms of visuals and experience as opposed to configurators? Why can’t we work to close that gap? It’s not just an environment to show a car in different colors. It’s a brand experience.”

So, like a videogame, the Lucid configurator allows customers to play with their car on-screen: opening the doors to see the interior, retracting the below-dashboard center display to unveil a storage compartment, turning the headlights on or off, and rotating the vehicle for a 360-degree view.

Someday, Jenkins says he imagines deeper engagement with the virtual car because “there’s more features that we can make functional, that we haven’t yet done” — for example, showing luggage being placed in the trunk to illustrate the vehicle’s cargo capacity.

Lucid plans to introduce accessories such as a roof rack and could visually integrate these into the configurator. “The long-term future goes far beyond that, where we could start to see the car in different environments as we launch the car in other markets around the world,” Jenkins says. “If I’m gaming and I choose a particular sports car, I can take it on all the racetracks around the world.”

But Lucid is coupling the online experience with a VR experience at its planned dealerships, which are called Studios. When the consumer finishes configuring a vehicle online, he or she is issued a code, which is used at the Studio space to retrieve it from the Lucid cloud server where it’s stored. Donning an HTC Vive VR headset that is wired to a two-seat or four-seat platform, he or she can then sit virtually anywhere in the configured vehicle’s cabin to explore its interior features. Jenkins says, “it’s a really effective tool to bridge the gap between the online experience and the physical retail experience.”

“The configurator should be a playful element,” says Candido Peterlini, head of digital marketing at Volkswagen AG in Wolfsburg, Germany. Thus, Peterlini adds, VW has linked it to interactive advertising: When a customer builds a vehicle in the configurator, the car created will be subsequently featured in the banner ads he or she sees at social media websites. This linkage rolled out in October for testing in Spain and the United Kingdom (UK).

The configurator should be a playful element.
Candido Peterlini  Head of Digital Marketing, Volkswagen AG

Its configurator also uses videogame technology to render an animated reproduction of a car on the customer’s screen in real-time. And it also generates a code that the customer can take to the dealer, to order the vehicle exactly as configured.

VW has also created what it calls a “Visualizer” being tested in Sweden that offers a similar 360-degree view. It eventually will be fully animated like Lucid’s, Peterlini says.

“It’s ongoing work,” Peterlini says. “We run user tests regularly and we know what you deliver today is obsolete in three or five months. The car experience must evolve from a technical point of view but also from an emotional point of view, and we are working on both sides.”

Likewise Nissan plans to incorporate better, more game-like realtime 3D rendering and AR experiences while balancing advanced functionality with fast download speeds that consumers have come to expect, says Allyson Witherspoon, U.S. chief marketing officer (CMO) at Nissan Group of North America in Franklin, TN. Work on these features is underway now, and the advent of 5G wireless communications is expected to help all of it function better on mobile devices, but for most customers those speeds are still many months or years away, Witherspoon says. She notes that Nissan’s visitor traffic from mobile devices eclipsed traffic from desktop computers in 2017 and has increased every year since.

That trend, along with the pandemic’s impact on sales, led Nissan to remake its configurator and consolidate it with all other shopping tools (including inventory search and trade-in value finders) in Nissan Shop@Home, which launched last May. The revision also brought a major upgrade to the configurator, which gained a basic level of real-time 3D rendering, faster load times, and the ability to personalize it for a user based on how he or she came to it (such as from an online ad), Witherspoon explains.

For the encore, Nissan is creating full end-to-end e-commerce that lets consumers truly complete a car purchase entirely online. “To me, it’s about creating the different paths, depending on how consumers want to shop,” Witherspoon says. The automaker anticipates introducing this in conjunction with a new vehicle in early 2021, she adds.

Witherspoon says, “It’s finding the specific ways that we can use [technologies] that are delivering the most value for consumers and are helpful for dealers as they’re using them, as well.”

Polestar, a spinoff of Volvo Cars, is taking another approach to bridging online and in-store sales — by refining the backend order fulfillment technology used by its dealerships, which it calls Spaces. “Now it’s becoming a table stake that you must have an online way of buying a car,” but there has been wide variability among the backend systems dealers use for various functions including factory order and inventory management and financing, notes Kyle Denlinger, head of IT and Digital at Polestar USA in Mahwah, NJ. So, to meet its objective of letting consumers configure and purchase one of its new vehicles entirely online or at one of its retail Spaces, Polestar reproduced all of these sales processes in one “single, unified retail tool that transitions the customer from the Polestar website to a place where the retailer can continue the transaction,” but it’s the same regardless of retailer, Denlinger says.

“What most other consumer products industries are doing is leveraging e-commerce and digital marketing to create that customer journey online,” says Sean Young, director of business marketing for manufacturing industry at NVIDIA in Fort Collins, CO — which makes the graphics processing chips (GPUs) underlying advanced configurators. To-date, car sales have been centered around dealerships and their personnel, but only because the auto industry hasn’t caught up with the times, Young asserts. “This is just getting started.”

Learn about car tech advances at CES 2021.

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