After analyzing existing customer experience management cases in automotive retail, a list of possible benchmark solutions has been made. The solutions are divided into several groups: mobile application, sales format, in-store solution, web solution, etc.

Mobile application: customer experience elements featured in the mobile application. The application is a solution itself, and is asked about in surveys and interviews as a separate question, summarizing the features below. These features mostly coincide with the ones presented in the website category. Generally, they differ in technical execution and user experience details.

· 3D configuration: the ability to select options and design features of car. The price of the customer's preferred specific set of parameters and the cost of every particular options is shown. Percentage match with in-stock cars on the preferred configuration is also displayed.

· Virtual reality: a virtual dealership experience allowing to examine cars in detail, which implies to use accessories such Google Cardboard.

· Notifications: the customer receives various messages from the dealer depending on the purchase stage. These can be about special offers and other before the purchase, and predictive service reminders after the purchase stage.

· Information: data on the dealerships inventory, what cars are in stock, car delivery status, etc.

· Online consultant: online chat, which allows the customer to ask any question and get an immediate response.

· Online appointment: the ability to choose a time to meet with the manager.

· Tracking activity: the dealership tracks the activity of a specific customer in order to know his needs in advance.

Website solutions: solutions features on a website. As already mentioned, they are generally similar to the mobile application benchmarks, but have considerable differences in implementation and user experience.

· Online consultant: online chat, which allows the customer to ask any question and get an immediate response.

· Online appointment: the ability to choose a time to meet with the manager.

· Tracking activity: the dealership tracks the activity of a specific customer in order to know his needs in advance.

· 3D configuration: the ability to select options and design features of car. The price of the customer's preferred specific set of parameters and the cost of every particular options is shown. Percentage match with in-stock cars on the preferred configuration is also displayed.

· Integrating traffic from 3rd party websites: attracting more users to the dealerships website via automotive online automotive media and markets such as smotra.ru, drom.ru, etc.

· Info: data on the dealerships inventory, what cars are in stock, car delivery status, etc.

· Virtual reality: a 3D on-screen virtual dealership experience allowing to examine cars in detail.

· Notifications: implementing browser notification technology, so the customer receives various messages from the dealer depending on the purchase stage. These can be about special offers and other before the purchase, and predictive service reminders after the purchase stage.

Sales formats: these solutions focus on the emerging sales formats. Currently, a versatile enough sales format does not exist, and the ones below have both pros and cons.

· Online stores: the customer can make a complete purchase online, typically works with preconfigured cars.

· Test drive centers: large sales formats with an extensive amount of in-stock cars, offering to test drive them on any requested type of terrain.

· Superstores: large stores located in the outskirts with extensive amount of in-stock vehicles, which allows to achieve zero delivery time.

· City stores: offices located in the city center with a little amount of in-stock vehicles. Implies heavy usage of digital technology and is mostly focused on improving the brand image.

· Mobile/pop-up stores: temporary stores usually located in city centers, typically set up for events like demonstrating a new car model.

· Home visits: the manager visits customer at his home, after arranging a meeting via phone/email or through communication channels proposed in this study (online appointment).

In-store solutions: this category of solutions describes customer experience features that can be presented inside sales formats described above.

· Multimedia screens: the can be implemented in various ways. Firstly, this can be large screens placed on the walls of the room with interactive multimedia, showing any detail of a car. Secondly, it can be standard screens placed in the room with such media. Also, tables with multitouch screens are used to show the described content.

· 3D configuration: the ability to select options and design features of car. The price of the customer's preferred specific set of parameters and the cost of every particular options is shown. Percentage match with in-stock cars on the preferred configuration is also displayed. Can be done through the website and multimedia screens.

· Assistance of interactive information applications on iPads: the manager can show his expertise in cars and his awareness of a specific customer's needs by answering any of his question with the help of information displayed on the tablet.

· Consultation lounge in a private setting: a comfortable room for the customer and manager to discuss various matters.

· Augmented reality: additional information is displayed about the car in whole or any specific part of it, when it detects that the customer is looking at it. This feature requires additional equipment like Google Glass.

· Virtual reality: the customer can see a car, which is currently not in stock; do virtual test drives sitting inside a car.

Other solutions: the section of the selected benchmarks shows other possible solutions like those, focused on promotion or aftersales interaction.

· Social media: the dealership must be quick to react on the customers messages online to maintain a positive reputation. Also customer data should be integrated with the existing customer relationship management system.

· Customer club: customer ownership club, which creates a prestigious brand image of the dealership.

· Test drive delivery: cars are delivered for a test drive to any locations the customer wants.

· Set and closely track performance measures: metrics on conversion rates through the sales funnel must be tracked in order to understand whether the dealer is efficient on every buying decision stage. This is also necessary to measure whether new implemented solutions improve performance.

In order to clearly structure these solutions for future analysis, they are applied to the McKinsey buying decision process model. One solution could not be put in this table: performance tracking is done independent of the buying decision stages, and it works throughout the whole experience. As previously described, the McKinsey model and therefore the table consists of four stages: initial stage (includes the need trigger and the loyalty loop trigger), evaluation stage, purchase stage (includes the decision moment), postpurchase stage (includes service and solutions to facilitate customer loyalty).



Table 1. Benchmarks applied to the McKinsey model.

Type of solution	Initial	Evaluation	Purchase	Post., loyal., serv.
Mobile application	Notifications Virtual reality	3D configuration Virtual reality Notifications Information	3D configuration Notifications Information	Notifications Information
Website	Information Notifications	Online consultant Online appointment Video consulting Tracking activity 3D configuration 3rd party traffic Information VR (V. Dealership) Notifications	Online appointment 3D configuration Information Notifications	Online consultant Online appointment Tracking activity 3rd party traffic Information Notifications
Sales formats	City store Pop-up store	Test drive center Superstore City store Pop-up store Home visit	Online purchase Superstore City store Home visit
In-store solutions	-	Multimedia wall Multimedia screen 3D configuration iPads Screen tables Consulting lounge Augmented reality Virtual reality	3D configuration Consulting lounge	iPads Consulting lounge Augmented reality Virtual reality
Other solutions	Social media Owner club	Social media Customer club Test drive delivery	Owner club	Owner club

*Virtual reality and augmented reality can include information about the car itself, virtual test drives, “do it yourself” showrooms.

This table allows to see the existing benchmark solution list in a concise way. Then, it is necessary to analyze how these solutions are applicable to the Perm market. After this it will be possible to define the problems, which can appear while implementing these solutions.

Chapter 2. Local market analysis and benchmark selection through research

2.1 Market analysis: automotive retail in Russia and automotive retail customer experience in Perm

PricewaterhouseCoopers have studied the Russian Automotive Market. According to their statistics of market share changes, there is now clear dependence between the price segment of a brand and its sales performance.

Figure 2. Sales volumes by brand

(Sales volume in 2015, thousands of units; market decrease; Change in sales in 2015 in comparison with 2014)

PricewaterhouseCoopers' research shows that the Russian automotive market is in a complicated state: imported car sales fell by 52 percent in 2015, while local brand sales have decreased only by 37 percent. The average price has risen by 22 percent. The least damaged market segment is the used car segment, which sales have exceeded new car sales in monetary value. (Deloitte, 2015) Though the brand's price segment and sales performance do not depend, there is a trend in the sales of specific models. The low price segment is dominating the “most sold used car models” rating, with rare appearance of other price segments. New car model sales are too generally presented by the low price segment, but occasionally models from averagely priced to highly priced segments appear. (Icnet, 2016)

The Perm market consists of various dealerships. Most of these dealerships operate only on the local market and only a few have offices in other cities or regions. In addition, the majority of the present dealerships operate under control of a central office, which is usually the original equipment manufacturer. These dealerships have an opportunity to implement their own solutions, but still are limited by the head office restrictions. The following independent dealerships are present on the Perm market:

· Saturn-R-Avto: Alfa Romeo, Chrysler, Jeep, Lada, Renault, Subaru, Suzuki.

· Demidich: Chery, Geely, Great Wall, Haima, Lifan.

· Tandem-Avto: Chevrolet, Great Wall.

· Uralavtoimport: Citroen, Datsun, Ford, Hyundai, Jaguar, Land Rover, Mitsubishi, Nissan.

· Matteo: Daewoo.

· Alfa-Garant: Fiat, Ford, Peugeot.

· Silver Motors: Hyundai, Ssang Yong.

· Dav-avto: Kia, Lada, Opel, Chevrolet, UAZ.

· Brait Park: Lada.

· Lada Centr Perm: Lada.

· Avtoprestizh: Chevrolet, Ravon.

List of dealerships that rely on the original equipment manufacturer:

· Premyer: Audi.

· Audi Centr Perm: Audi.

· Avtomobili Bavarii Perm: BMW.

· Vostok Motors: Infiniti, Mazda.

· Vega-Motors: Kia.

· Forward-Avto: Lada.

· Leksus Centr Perm: Lexus.

· Zostmayer Avtomobili: Mercedes Benz.

· Telta MB: Mercedes Benz.

· Lucky Motors: Nissan.

· Ural-Perm: Renault.

· Avto Respublika: Skoda.

· Praga Motors: Skoda.

· Toyota Centr Perm: Toyota.

· Toyota Centr Prikamye: Toyota.

· Folksvagen Centr Perm: Volkswagen.

· Ekskurs Perm: Volkswagen.

· Obuhov: Volvo.

· Evrikar: only used cars.

These dealerships are divided into groups depending on the price segment of the vehicles they sell. Since some sell both averagely priced and expensive cars, they can be present in more than one segment. These segments were defined based on the prices and models presented by various dealerships. A dealership is considered to be present in a segment when it sells at least 2 models at the segments price. Only standard set of options are considered, in order to make prices as comparable as possible. The following segments are distinguished:

· Low price: under 600.000 rubles.

· Average price: 600.000-1.299.000 rubles.

· Above average price: 1.300.000-1.800.000 rubles.

· High price: 1.799.000-3.000.000 rubles.

· Luxurious cars: over 3.000.000 rubles.

The next step was to analyze product range of every dealership. The table below shows in what segments every dealership is present. The columns represent the price segment, and the rows are the Perm dealerships. Also, a separate column presents whether a dealership sells used cars.

Table 2. Local dealership segment presence.

Dealership	Low Price	Average Price	Above Average	High	Luxury	Used
Saturn-R-Avto	x	x	x	x	x
Premyer			x	x	x	x
Avtomobili Bavarii Perm			x	x	x	x
Demidich	x	x
Tandem-Avto	x	x				x
Uralavtoimport	x	x	x	x	x	x
Matteo	x
Alfa-Garant	x	x	x	x
Silver Motors	x	x	x
Vostok Motors		x	x	x	x	x
Vega-Motors	x	x				x
Dav-avto	x	x				x
Brait Park	x
Lada Centr Perm	x
Forward-Avto	x
Leksus Centr Perm				x	x	x
Zostmayer Avtomobili			x	x	x	x
Telta MB			x	x	x	x
Lucky Motors	x	x	x	x	x	x
Avtoprestizh	x
Ural-Perm	x	x				x
Avto Respublika		x
Praga Motors		x				x
Toyota Centr Perm		x	x	x	x	x
Toyota Centr Prikamye		x	x	x	x	x
Folksvagen Centr Perm			x	x		x
Ekskurs Perm			x	x		x
Evrikar						x
Obuhov			x	x		x

The presence in every segment is distributed evenly, except for luxurious cars. Every dealership is most likely to be present in two segments and less often in one or three. In future analysis, this table will allow too see what is the presence in every segment, which will help to assess possible consequences of implementing a solution is a specific segment.

In order to understand what benchmark solutions are already in use by local dealers, it is necessary to analyze their current activity.

Table 3. Best practice adoption by segment.

Solution	Low	Average	Above average	High	Luxurious
Mobile application
Sales formats
Online store
Test drive center
Superstore
City store*
Pop-up store
Home visit
In-store
Multimedia screens
3D configuration
Assistance with iPads*
Consulting lounge
Website
Online consulting
Online appointment
Tracking activity
3D configuration
3rd party traffic
Information
VR*
Notifications
Other
Social media
Owner club
Test drive delivery

*Only one dealership has implemented these solutions and this dealership is present in every segment.

To make the analysis relevant and consistent with previous research, it is based on the benchmark solution list and the price segments. This structure allows to understand which segments are lacking specific solutions.

The green color describes massively implemented solutions. The red color is for solutions that are not yet implemented, and the pale red describes solutions that are implemented only by one company, and this company operates in every segment, thus it is unobjective to mark this as a fully adopted solution by the market.

The low and average price segments have the least best practices implemented, which since explained by the fact, that they have high sales independent of what customer experience they provide, since people cannot afford expensive cars anymore (Icnet, 2016). Nevertheless, there is a number of dealerships present in these segments, and in order to gain competitive edge, it is important to improve the provided customer experience. This supports the trend of market oversaturation, resulting in the need to improve customer experience. (McKinsey & Company, 2014)

In order to examine customer experience on the local market, a semi-structured interview was conducted. The aim of the interview was to analyze the buying decision process in Perm using the McKinsey model. Thus, the questions were based on the stages of this model (see list of questions in application 1). Fourteen interviews were conducted with respondents of different age groups, wealth and automotive purchasing experience. The answers tend to be similar even between different age groups, which allows to develop an understanding of the current customer experience on the Perm automotive market.

First, the customers visit dealerships less often. Even if they need to touch and feel the vehicle, the customer journey still starts online and the customer still visits the dealership maximum two times before the purchase stage. Then, the digitalization trend in confirmed, as even generation X consumers start their customer journey online. Thirdly, the current customer experience in the Perm automotive market is comparable with the worldwide experience.

In order to compare the results of the interview with existing research on customer experience in automotive retail, the analysis is completed in a table structured upon the buying decision process model. The columns are for the buying decision stages and the rows are broken down into two parts: the first car bought by a consumer and the second or any following car bought. Both of these parts are divided in generation Y and X defined by Deloitte and previously described in this research. The answers are presented in the most possibly concise form.

Table 4. Consumer interview analysis.

		Initial	Evaluation	Purchase	Postpurchase
1st car	Gen Y	Necessity to transport family and changing to more convenient transport trigger the need to purchase.	Search starts in the internet. Attends the dealership 1-2 times. Heavily influenced by word-of-mouth.	Relies on information from the internet and recommendations more, while making the decision.	Evaluates service, which heavily influences his loyalty.
	Gen X	Necessity to transport family and changing to more convenient transport trigger the need to purchase.	Search starts in the internet. Attends the dealership 1-3 times, as the customer seeks for its expertise. Heavily influenced by word-of-mouth.	Relies equally on internet and the dealership's expertise, but personal recommendations are more important.	Evaluates service, which heavily influences his loyalty.
2nd+ car	Gen Y	New crucial functionality, higher income, status statement.	Search starts in the internet. Attends the dealership 1-2 times. Heavily influenced by word-of-mouth and personal recommendations.	Relies on information from the internet and recommendations more, while making the decision.	Evaluates service, which heavily influences his loyalty.
	Gen X	Need of higher practicality first of all, then functionality and income.	Search starts in the internet. Attends the dealership 1-3 times, as the customer seeks for its expertise. Heavily influenced by word-of-mouth and personal recommendations.	Relies equally on internet and the dealership's expertise, but personal recommendations are more important.	Evaluates service, which heavily influences his loyalty.

This analysis confirms that customer experience in Perm is generally similar to the worldwide experience. In further research this analysis will show, what selected benchmarks are applicable to what stage of the buying process.

2.2 Interviewing marketing experts and surveying consumers in local automotive retail

To carry out this study, it is necessary to conduct a semi-structured interview with local dealership managers. The aim of the interview is to gain insights on the advantages and disadvantages of the considered benchmarks. In addition, it helps to find out what current activity do local dealerships have on customer experience. This method has been chosen, since the resources to conduct a full-scale research are very limited. In order to have a precise understanding of how international solutions apply to a local market, an opportunity to conduct real life experiments if required. Since establishing contact with local dealerships and acquiring all the necessary performance data is extremely difficult, this study involves a simpler to carry out method. A semi-structured interview with local dealership managers allows to access the expertise of a professional marketer in the automotive retail industry. Furthermore, it provides flexibility in collecting data and insights.

The interview starts with a descriptions of the research. Also it is highlighted, that the respondent can pass a question, in case he does not want to answer it. Direct questions about the respondent's opinion on the concepts of benchmarking and copying existing solutions are deliberately avoided in order to keep the answers unbiased. For instance, if a manager tells that he has a negative attitude to applying international solutions, he may end up voicing only cons of the solutions proposed further on. In this case the results would be unobjective.

The script of the interview is intended to help start the conversation. It focuses on describing the study, so the respondent will understand for what reasons specific questions are asked. The interview will begin with the following text, "Hello, I am glad that you have agreed to spend some of your time to answer my questions. I am conducting this interview in order to carry out my research. I intend to study customer experience in automotive retail. To be more precise, I am analyzing international best practices in customer experience management. I have chosen a set of benchmark solutions, and the next step is to find out, whether they are applicable to the local dealership market.This is the primary reason, why I need to conduct an interview with a professional. To gain more insights, I would also like to ask about automotive customer experience in Perm. Although I am going to ask about your job and experience, the interview will be anonymous. The results will be rendered in an aggregated way. If you would like, you can skip any question". The interview contains a set of basic questions (each one is followed by a description of the presented solution), follow-up questions are usually asked to gain in-depth information, and some questions can be omitted or changed in order (see application 2 for list of questions).

In order to clearly see what the marketing experts think about every solution, the answers were structured in tables separately for every group of solutions. The benefits and drawbacks of benchmarks are described from the dealership's point of view and the customer's. The analysis filtered a solution that cannot be considered while developing recommendations, as the interviewees did not see clear ways to apply it (dealership and original equipment manufacturer collaboration). A number of benchmarks are also omitted further in the research, as they are already actively used by local dealerships (performance tracking, customer 360).

Mobile application solutions.

Table 5. Mobile application solutions.

	Dealership	Customer
	Benefits	Drawbacks	Benefits	Drawbacks
3D configuration	Shortens the buying decision process. Improves brand image. Slightly increases leads.	Requires a powerful device, which decreases the number of involved customers. Unsuitable for low price segments.	Allows to study cars thoroughly. The manager will already have an offer or alternatives. Pairs with online consulting.	Requires a powerful device.
Virtual reality (using google cardboard)	Improves brand image - high technology, customer-oriented.	The application will cost significantly more. Very doubtful real benefits for the customer.	The ability to know the dealership in advance.	Little navigation possibilities. Gets boring after 5 minutes.
Notifications	More online traffic and potentially customers in service.	If many customers are attracted, there may not be enough personnel, which will negatively affect the brand image.	The dealership cares about the customer.	May become annoying. Also can make an impression that the car breaks too quickly.
Information	Can trigger the customer's need.	Not everything listed will be available at any time, which will allow competitors to steal customers.	Saves time on information search.	Still makes the customer make a call or even visit the dealership when information is insufficient.

The mobile application solutions have advantages and disadvantages for both the dealership and the customers. Despite some drawbacks are significant for specific solutions compared to the advantages, still there are no obviously no solutions that can be omitted at this stage.

Sales formats.

Table 6. Sales format solutions.

	Dealership	Customer
	Benefits	Drawbacks	Benefits	Drawbacks
Online store	Less expenses on personnel	3% commission for transaction (leads to either lower profit or higher prices so the customer can choose a competitor)	Is very helpful, if the customers has little time to make a purchase	The customer does not physically check the car before purchasing
Test drive center	Allows to show the pros and hide the cons of the car.	Requires to keep the cars (replacement cars too) always clean and technically checked.	Generally positive emotions, the customer understands whether the car suits him.	Customers can be deceived (for example with additional noise isolation).
Superstore	Many brands in one place, big traffic, less advertising expenses.	Many customers who visit the dealership without a need to buy a car (e.g. those who came for service).	Big choice of cars, if the customer did not like one, he can consider another.	Very disappointing if the customer did not find what he wants.
Mobile store	Additional traffic.	Little suitable places in Perm. Dealerships usually send interns, who can fail and ruin the brand image. Focused on the vehicle brand, not the dealership.	Ability to arrange a test drive and further meetings with a manager.	The customer can see only one or few cars on spot.
Home visit	Improves brand image.	Personnel will be unavailable at the dealership if needed.	Makes the customer feel important, very convenient.	None (no there's not - can't touch car, etc.).

This segment of solutions mostly presents costly sales formats which have high potential to attract customers. Nevertheless, some, which are not as expensive are not very suitable for Perm, according to the marketing experts. For example, the mobile store sales format can be hard to implement, as there is little places, which satisfy all the criterion to open such a store, and also there is a risk of ruining the brand image. automotive retail benchmarking trade

In-store solutions.

Table 7. In-store solutions.

	Dealership	Customer
	Benefits	Drawbacks	Benefits	Drawbacks
Multimedia screens	Improves brand image. Makes presenting information more entertaining.	Expensive. At the same time does not provide unique benefits.	Entertains the customer if he is waiting for service or else.	Limited information.
3D configuration	Useful when personnel is currently busy.	Requires expensive equipment. Unsuitable for low price segments.	Makes it easier to choose the car and options.	The set of options can be out of stock.
Tablets	Significant help to personnel.	Equipment cost (in case the manufacturer does not give them free).	The manager can answer almost any question.	The customer has to wait while the manager operates the tablet.
Consulting lounge	Allows to solve issues easier and to make more additional offers.	May be impossible due to constructing issues.	Convenient, quite, relaxing.	Can make the customer buy more and spend more.
Virtual/Augmented	Improves brand image.	Significantly expensive. Test drive simulation costs at least 80000 rubles. Still does not persuade.	Positive emotions, unique experience.	The customer still needs a standard real life test drive experience.

In-store solutions focus mostly on technology, while only one best practice avoids it. Thus, this segment is characterized by significant expenses, since generally technology implementations has big costs. While there is a different type of solution here, it is still expected to be expensive, according to the experts, since big physical space is required (which are usually scarce).

Website solutions.

Table 8. Website solutions.

	Dealership	Customer
	Benefits	Drawbacks	Benefits	Drawbacks
3D configuration	Shortens the buying decision process.	Unsuitable for low price segments.	Allows to study cars thoroughly. The manager will already have an offer or alternatives. Pairs with online consulting.	-
3rd party traffic	Additional traffic highly targeted traffic.	Hard to arrange for free.	Can get an offer specifically when he wants one.	Can seem obtrusive
Notifications	More online traffic and potentially customers in service.	If many customers are attracted, there may not be enough personnel, which will negatively affect the brand image.	The dealership cares about the customer.	May become annoying. Also can make an impression that the car breaks too quickly.
Information	Can trigger the customer's need.	Not everything listed will be available at any time, which will allow competitors to steal customers.	Saves time on information search.	Still makes the customer make a call or even visit the dealership when information is insufficient.
Online consulting	Helps to gather more customer contacts.	Requires always available personnel.	Convenient.	If the service is provided poorly ruins the brand image.
Online appointment	More people visit the dealership.	Risk of falls appointments.	Fast and convenient.	The conformation process may be frustrating for some customers.
Activity tracking	Allows to create a thorough customer relationship management system.	Requires to identify the user.	The dealership is aware of the customer's need in advance.	Some customers may be uncomfortable that they are tracked.

The main problem that can occur with website solutions is the possible implementation cost. Despite possible disadvantages for the dealership, properly implemented solutions will be able to avoid these potential problems. Thus, these best practices are expected to have an impact on sales, especially in the long run.

Other solutions.



Table 9. Other solutions.

	Dealership	Customer
	Benefits	Drawbacks	Benefits	Drawbacks
Social media	Personal interaction with the customers, ability to post media.	Competitors can use the dealerships customer base. Requires at least 12000 rubles a month to operate one account. Does not pay off.	The customers can benefit from various contests.	The customer may not be interested in the posted content.
Owners club	Existing customers can help to persuade potential customers.	May ask for financial support. Too hard to control.	The customer has a source to get reliable information.	May be unreliable you if sponsored by the dealer.
Test drive delivery	Improves brand image.	Suitable only for premium brands.	Very convenient.	-

Although other solutions seem to have clear benefits, there are also significant drawbacks expected by the experts. At this stage the best practices in this segment are most probably not efficient to use by the dealership. Nevertheless, depending on further research and implementation details, they may be viable to implement, considering the potential benefits.

An important point to mention is “consumer terrorism”. As defined by one of the interviewee's, it is when a customer says that “the other dealership has offered a low price. Either you offer a lower price, or I buy at the other dealership”. This, and other answers confirm that price is by far the most important decision making factor on the local market.

In order to have a different perspective on the applicability of the selected solutions, a survey is necessary to be conducted. It studies whether the consumers are interested in the proposed solutions (see application 3 for list of questions). Since some solutions are similar, like the information, 3D configuration, virtual reality and various multimedia screens, they are listed only once, to avoid confusing the respondent. Therefore, in further analysis they are considered as one too, although they will require separate assessment in the recommendations part.

Generally, people may tell that they like a feature, but in reality, it does not affect their dealership choice decision. Thus, a grading system is presented in the survey. The respondents choose, whether a specific solution will affect their purchasing decision using a grading scale. The lowest grade means that the described feature does not affect the decision in any way, and the highest grade means that the feature is crucial in his decision. In case the respondent cannot give a definitive answer, he has an option to answer, that he does not know.

The survey starts with a description of the research. Then the respondents are asked to evaluate every presented feature, depending on how it can affect their dealership choice. The grading system is presented for every question:

· I do not know how this will affect my choice.

· This will not affect my choice in any way.

· This will influence my choice, but there are more important criterion.

· This is important for my choice.

· This is crucial for my choice.

The survey has been answered by 158 people. Overall, the survey results show that age, experience and wealth do not have direct effect on preferred customer experience. Therefore, the analysis considers the answers of different customer segments in an aggregated way. Though the questions where divided by type of solution, the analysis outlines different groups, in order to clearly see which solutions interest the customer more. Based on the results, there are three groups of solutions:

· Good: solutions that will significantly affect the customer's choice of a dealership.

· Neutral: solutions that will affect the customer's choice, but not very significantly.

· Bad: solutions that will not affect the customer's choice.

The researched solutions are also grouped according to the McKinsey buying decision process model. This allows to see what stages of the model are mostly addressed and to compare it with the current customer experience. As tracking the customers activity depends on the dealership and is omni-present in the buying decision model, it is not listed in the table below, although it is considered to be good by the customers. Also a separate question was included about the mobile application. Overall, this solution received positive feedback.

Table 10. Survey analysis.

	Initial	Evaluation	Purchase	Postpurchase
Good	-	Information Virtual reality Test drive center Superstore Test drive delivery	Test drive center Superstore	-
Neutral	Notifications City store	Online appointment Notifications City store Multimedia screens Consulting lounge VR/AR	Online appointment Notifications City store Consulting lounge	Notifications Consulting lounge VR/AR
Bad	Pop-up store	Online consulting Video consulting Pop-up store Home visit	Online consulting Online purchase Home visit	-

The survey analysis shows that consumers are mostly interested in solutions that are applicable at the evaluation and purchase stage of the buying decision process. Several trends are clearly demonstrated by the results. It is important to keep in mind that most of the respondents are generation Y consumers, while describing these trends. As previous research has shown, the modern customer journey in retail starts online. Customers tend to rely on their personal research and on word-of-mouth, which explains why they are generally not interested in online consulting and video consulting. Then, after developing a set of preferences, the customer needs to visit the manager, thus he has a generally positive attitude to online appointments. Finally, as he is in the dealership, the customer appreciates the opportunity to physically study the desired car, so an environment such as test drive center is critical for most of the customers.

2.3 Selecting benchmarks applicable to the Perm automotive retail market

The conducted research allows to select specific benchmarks, which can be implemented by local dealerships. There is a set of criteria, that defines what benchmarks will be selected:

· The current presence of a solution on the market: if a solution is already actively implemented by every dealership, it is unnecessary to recommend it.

· The ability to implement a solution according to the marketing experts: if a solution is expected to improve brand image, but will not attract significant traffic, it will not be recommended to implement. As previous research shows, in context of dealership choice criteria, brand image does not have any power over prices.

· The demand of a solution according to the consumer survey: if there customer shows no interest in a solution at the development stage, it will not be recommended to implement.

· The potential to increase profit: based on previous points, only solutions that affect traffic or profit directly are considered further on.

The market has been divided into two parts based on the previous segment analysis:

· Low priced segment (low and average price segments): this segment is characterized by higher sales. As this is the reason of lower provided customer experience quality, the growing market saturation in this segment will lead to the necessity of customer experience improvement in order to gain competitive edge.

· High priced segment (above average, high and luxurious price segments): this segment has some solutions already implemented and tends to be the first in creating and implementing new solutions. Thus, a dealership has to improve customer experience in order to stand out.

As Perm market research shows, there is no clear evidence of which solutions can be applicable to which segment. Furthermore, the leading dealerships at implementing new solutions are present in every price segment, which makes it even more complicating to properly distinguish segments and appropriate solutions. Thus, this segmentation is irrelevant while developing recommendations.

After filtering previously selected best practices, the following benchmark solutions have been left.

Table 11. Selected benchmark solutions.

Type of solution	Initial	Evaluation	Purchase	Post., loyal., serv.
Mobile application	Notifications	Notifications	Notifications	Notifications
Website	Notifications	Online appointment Tracking activity 3rd party traffic Notifications	Online appointment Notifications	Online appointment Tracking activity 3rd party traffic Notifications
Sales formats	City store	Test drive center Superstore City store	Superstore City store
In-store solutions	-	iPads Consulting lounge	Consulting lounge	iPads Consulting lounge
Other solutions

Despite price segmentation not being relevant in this part of the research, since generations X and Y have differing preferences on the same stages of the decision model, the selected solutions need to be segmented by generation. Further on, the dealership can define which segment he is targeting and decide which solutions are more reasonable to implement. This type of consumer research is not expensive, and taking into account, that the dealership leads a customer relationship management system, he already knows who his typical customers are. In this case, he can either focus on developing the existing segment of customers, or pursue a new customer segment.

The table below present what solutions are relevant for the two generations on every stage of the buying decision process. The columns describe the generations and the rows show the stages. The solutions are distributed according to the previous research results of the automotive retail customer experience in Perm. Since the features present in the mobile application and website are now identical, the mobile application will be considered as a copy of the website.

Table 12. Selected benchmark solutions segmented by generation.

Stage	Generation Y	Generation X
Initial	City store	City store
Evaluation	Mobile application 3rd party traffic Test drive delivery Online appointment Notifications City store Tracking activity Test drive center Superstore	3rd party traffic City store Tracking activity Test drive center Superstore iPads Consulting lounge
Purchase	Mobile application Online appointment Notifications Superstore Consulting lounge	Superstore Consulting lounge
Postpurchase	Mobile application 3rd party traffic Notifications Tracking activity iPads Consulting lounge	3rd party traffic iPads Consulting lounge

Since the market trends are formed by the younger generation, and benchmark solutions focus on complying with these trends, it is clear that most of the new solutions will be reasonable to apply to target generation Y customers. This is proved by the analysis above. Most solutions are present in the evaluation stage, which is a consequence of this stage being the longest and most important in making a decision. The initial stage, on the other hand, is almost empty. This is due to fact, that the need to buy a car cannot be triggered by the dealership. Cars are not bought spontaneously. Still, the dealership can try to be present in the initial consideration set, the chances of which mostly depend on the brand image.



Chapter 3. Implementation details of the selected solutions

The next stage of developing recommendations on implementing benchmark customer experience solutions is to outline the details necessary to take into account and the implementation costs of various best practices. The assessment is based on various sources, including an IT and web expert and marketing experts in automotive retail. A detailed implementation plan is not provided, as it strongly depends on the specific dealerships, its customers, and financial capabilities. The results are presented in a table, where every solution is described in more detail and the approximate implementing costs are assessed. Since exact numbers may vary depending on many things, the resulting implementation costs are segmented in three groups:

· Green: low priced solutions up to 200.000 rubles.

· Yellow: medium priced solutions above 200.000 rubles and under 1.000.000 rubles.

· Red: high priced solutions about 1.000.000 rubles.

The recommended solutions are also segmented by consumer generation. After researching its customers, the dealership can choose to focus on of the generation. They have different expectations of the customer experience, thus the range of solutions to improve it differs too. The tables below are based on previous research and conclusions, specifically on the buying decision process analysis, and the cost predictions use the information provided by local IT experts.

Each generation is also distinguished by a detailed customer portrait description. Although, there can be a lot of segments in the automotive retail market, depending on the segmentation criteria, only one most common segment is described for both generation. This segment has common preferences with every other segment. A simplified approach allows to outline the most common features of both generations. The common features can be added to and slightly altered in cases in is necessary to make a more detailed segmentation in the future. The customer portraits are based on the previously conducted local customer experience research.

Generation Y Customers.

Table 13. Benchmark solution cost estimation and details for generation Y.

Solution	Cost	Details
City store	High	An offices situated in the city center. There a very little amount of cars in the showroom, but the main point of this format is to attract more traffic. Personnel can consult customer on any question.
Mobile application	Medium	According to the interview with an IT expert, the most effective way to develop an application is to copy it from the website. It will not make the costs low, since a quality application is always expensive, but still it will save a big amount of time on development and money.
3rd party traffic	Low	This solution is low priced while the dealership is able to negotiate a free mention of the dealerships website on 3rd part sources. As soon as he fails, it will quickly become expensive. Nevertheless, at least one customer attracted through this channel can cover the monthly costs of such promotion.
Test drive delivery	Low	The customer chooses any location where he would like to start the test drive, and the car is delivered to that place.
Online appointment	Low	The ability to choose a time to meet with the manager.
Notifications	Low	The customer receives various messages from the dealer depending on the purchase stage. These can be about special offers and other before the purchase, and predictive service reminders after the purchase stage.
Tracking activity	Medium	The dealership tracks the activity of a specific customer in order to know his needs in advance.
Test drive center	High	Large sales formats with an extensive amount of in-stock cars, offering to test drive them on any requested type of terrain or track.
Superstore	High	Superstores: large stores located in the outskirts with extensive amount of in-stock vehicles, which allows to achieve zero delivery time.
Consulting lounge	Low	A comfortable room for the customer and manager to discuss various matters.
iPads	Low	The manager is assisted, so he can show his expertise in cars and his awareness of a specific customer's needs by answering any of his question with the help of information displayed on the tablet.

As many of these solutions rely on technology, all of the selected best practices are included in the list for generation Y. While younger customers expect high-end features during online touchpoints, they still want a decent experience when physically present at the dealership. The typical customer of generation Y is a young man aged 28. He has a young family with only one child. His first car is becoming too old, and he needs a new, more reliable, bigger can too transport his family safely. He starts his customer journey by browsing various online platforms such as the original equipment manufacturers websites (for prices) and car review websites (for reviews, comparison, etc.). After making up his mind about 2-3 models, he starts looking for a dealership in order to make a test drive. Here personal recommendations will have a big influence on the customer's choice of both the car model and the dealership. After this point, he already makes the decision. The next stage is the purchase, and here price is crucial, as this customer will look for the cheapest option.

Generation X customers.

Table 14. Benchmark solution cost estimation and details for generation X.

Solution	Cost	Details
City store	High	An offices situated in the city center. There a very little amount of cars in the showroom, but the main point of this format is to attract more traffic. Personnel can consult customer on any question.
3rd party traffic	Low	This solution is low priced while the dealership is able to negotiate a free mention of the dealerships website on 3rd part sources. As soon as he fails, it will quickly become expensive. Nevertheless, at least one customer attracted through this channel can cover the monthly costs of such promotion.
Tracking activity	Medium	The dealership tracks the activity of a specific customer in order to know his needs in advance.
Test drive center	High	Large sales formats with an extensive amount of in-stock cars, offering to test drive them on any requested type of terrain or track.
Superstore	High	Superstores: large stores located in the outskirts with extensive amount of in-stock vehicles, which allows to achieve zero delivery time.
Consulting lounge	Low	A comfortable room for the customer and manager to discuss various matters.
iPads	Low	The manager is assisted, so he can show his expertise in cars and his awareness of a specific customer's needs by answering any of his question with the help of information displayed on the tablet.

Since the market is shifting to digital customer experience features, generation X consists mostly of laggards in context of automotive retail trends. They still start their journey online, but prefer to visit the dealership as many times as it is necessary to acquire sufficient information and make a decision. The typical generation X customer is 45 years old. A man with a wife and two grown-up kids, though they are still unable to make a living on their own. The man decides to upgrade to a new car so he can get more practicality out of it. He will not sell his previous car, but will leave to his wife and children. He already has experience with vehicles and has reliable friends to give recommendations, thus he start to study the initial consideration set online. After researching prices and technical information about the car, he visits the dealership in order to find out details, do a test drive, and to ask the consultant on details about the car. Rather than relying on online information, he would rather trust what he hears in person. After studying 2-3 variants, he makes a decision, taking into account personal recommendations and the dealer's advice.

The generation X customer appears to use online sources mostly for initial investigation, while the generation Y customer fully trusts online information and would rather not gather it from only one source. The different customer experience expectations and triggers to buy a car result in significantly differing customer journeys. This is the main reason why the list of solutions offered for generation X is significantly shorter.

Overall, the main benefit of almost every solution is increased traffic. This will lead to higher sales and therefore to higher profit. Solutions like the consulting lounge and activity tracking focus more on face-to-face touchpoint with the customer and creating a pleasing experience, which increases customer satisfaction and eventually makes the customer loyal. In addition, best practices such online appointment allows to make a seamless transition from digital touchpoints to physical, creating an omni-channel customer experience.

Conclusion

This research studies the benefits and difficulties of customer experience benchmark solutions application to the Perm automotive retail market, i.e. the advantages and potential problems of copying international best practices. In order to find successful solutions existing case analysis is required. Then benchmarks are analyzed through a customer survey and semi-structured interviews with local automotive marketing experts and consumers. Also the local marketing has been analyzed. The conclusions after this research allowed to develop recommendations with expected costs and segmentation by generation.