Preliminary study on "no contact" marketing risk in the automotive industry

With advances in epidemic controls and the resumption of work, carmakers are drastically accelerating their digital marketing programs, and related risks are starting to appear. Following the publication of Deloitte Risk Advisory’s Ten Steps for Enterprises to Fight the Epidemic and Focus on Risks to Refine the Digital Marketing System for Automotive Enterprises, part of our series of handbooks on business resumption in the automobile industry, we researched "non-contact" car sales to produce this paper exploring and discussing the following issues based on our experience of automotive risk management and digital marketing:

• The impact of "non-contact" marketing in the automobile industry
• Risks arising from the increased adoption of streaming in "non-contact" marketing and how to respond in the short term
• Long-term risks in "non-contact" marketing, and how it should be deployed

I. Overview: "non-contact" marketing’s impact on and value in the automobile industry

An important part of automotive digital marketing systems, "non-contact" marketing in this article refers to marketing activities through 3rd-party social media platforms to remotely inform potential consumers and target customers about brands and products, and support product purchases, as well as provide value-added services such as after-sales and derived services.

"Non-contact" marketing usually covers multiple digital social media platforms, including short videos, live streaming, Weibo’s topic page and WeChat official accounts. This multi-platform, multi-method deployment runs through the entire sales process, covering different types of customers, as well as providing touchpoints for and access to a wide range of services. "Non-contact" marketing has already generated a huge impact among a large number of digital media platform users. According to incomplete statistics, Sina Weibo’s top 20 auto enterprises have over 30 million followers. During the Spring Festival holiday alone, videos released through auto brands’ TikTok accounts amassed over 440 million views, and one week after the holiday, the top 20 auto enterprises’ WeChat official accounts had been read more than 3.76 million times.

On top of those huge numbers, efficient real-time user interaction through various platforms can bring the following benefits to carmakers:

• Brand promotion: Increase brand exposure and traffic, gain more loyal fans and word-of-mouth marketing exposure
• Customer development: Maintain close relationships with existing customers, connect with potential customers through multiple channels, and establish a customer base by increasing private domain traffic
• Sales conversion: Appropriate platform positioning and page layout will effectively collect and track touch points to promote sales conversions
• Financial benefit: No entrance fee for mobile media platforms, reducing marketing costs
• Market insight: Understand customer trends, monitor changes in customer needs and requirements promptly, and sharpen acumen

Although the automobile industry had a slow start in livestream marketing, the streams it has managed to produce attracted widespread attention during the epidemic. By trying this new channel, carmakers and dealers seek to maintain and increase their customer bases when they see a sharp drop in offline consumer activity. The following section takes a closer look at streaming through a multi-dimensional analysis, draws inferences, explores the risks in "non-contact" marketing and suggests countermeasures.

II. Greatness in triviality: A closer look at "non-contact" marketing through streaming

The rise

• Retailers starting to adopt new model of streaming + e-commerce: Thanks to the compeling narratives of influencers, live streamed shopping became popular overnight. All kinds of brands turned to this new model, seeking to convert traffic into sales.
• Internet celebrity sells cars for the first time: On the night of the 2019 Tmall 99 Saving Festival, anchor Wei Ya sold cars during her live stream. With total viewers reaching 2.2 million, she managed to achieve a record of selling more than 40 vehicles in 15 minutes1. When the automotive market starts to shift from one with huge growth potential to one where growth is challenged, carmakers and dealers will explore exploring new touchpoints to expand traffic and increase sales. Streaming has brought new sales channels to automotive marketing. 
• The epidemic has boosted "non-contact" live streaming: During the 2020 Spring Festival, in the midst of the epidemic, offline car sales almost stagnated, and carmakers and dealers were forced to act quickly to stay ahead. Streaming, a typical form of emerging "non-contact" marketing, started to gain recognition and be widely used in the automobile industry.

1. Source: https://www.sohu.com/a/342231263_100188939

Current situation

More than 20 car brands streamed a wide range of content during the Spring Festival on platforms like Tmall, JD, Tik Tok, Kuaishou, and Volcano Video, covering different traffic entrances. In terms of broadcast participation, dealers from 1st- and 2nd-tier cities, as well as provincial capitals, were quickly caught up by lower-tier cities. Automotive industry live streaming has reached a new level. We analyze three representative brands below, helping readers experience the popularity of streaming more closely.

The value

Unlike WeChat and Weibo, which use text and pictures as the main content, live streams utilize a huge traffic pool and a tremendous amount of information, catering to the lifestyles and entertainment habits of most age groups. Having quickly gained popularity during the epidemic, livestreaming opened a new window for carmakers to engage with customers, and started to play an important role in the three stages of the customer lifecycle, recognition, purchase, and loyalty.

Beware nine risks in three areas

While enjoying the various short-term benefits of live streams, carmakers and dealers should be keenly aware of nine risks in three areas, namely effectiveness of communication, user experience, and compliance and brand reputation.

Get prepared now: Refer to the best practices and respond to risks

In light of the epidemic, how should carmakers and dealers adjust their strategies quickly to keep these risks at bay and achieve the greatest effect from live streamining? The measures set out below include case studies for reference.

III. Plan for the future: Thinking framework to address "non-contact" marketing risks

The nine risks in live streaming are also present in other "non-contact" marketing methods. In addition, it is imperative to identify the strategic position of each platform to coordinate marketing and connect with subsequent offline sales activities. We propose a comprehensive approach to "non-contact" marketing risk management covering the four aspects below.

We put forward the following suggestions with specific examples for reference

As control and prevention of the epidemic start to see positive results, the customer flow to offline showrooms will gradually recover. But consumers, dealers, and carmakers who have benefited from "non-contact" marketing to save time and money can continue to explore the opportunities it presents. As we have said previously, what took place in the epidemic was not a "decisive battle" in automotive digital marketing, but rather a clarion call for future competition. Brands that understand and manage “non-contact” marketing risks will be able to go further in their transformation of automotive marketing.