Accelerating Growth: How Automotive Companies Thrive with Marketplace Business ModelsLeave the competition behind with a marketplace in the automotive industry
Please keep reading on how to leverage marketplace business models to accelerate your growth in Automotive.We'd love to get to know you first
Introduction to Marketplaces
In a world where time is money, customers welcome solutions that add convenience to their shopping experience – and time-saving, low-effort options are attractive perks. B2B customers in the automotive industry are no exception. Usually, when shopping for a specific item, customers search for stores that specialize in that particular offering. When you have multiple products to buy, this quickly becomes time-consuming and inconvenient.
This raises the question: what if your customers had a go-to online platform for everything they need? Somewhere they could buy adjacent products and services without hopping from one seller's shop to the next?
"We offer you everything you need on a silver platter," – that's what you'd want to tell your customers ASAP. Introducing third-party complementary products and services to your portfolio using marketplace technology should be your next step toward success – leading to increased customer satisfaction, and an enhanced product assortment, with low risk and investment.
Definition of a Marketplace
Gartner defines enterprise marketplaces as "digital channels operated by B2B or B2C organizations that invite third-party (3P) sellers to sell directly to end customers, and support the selling of physical products or services, with digital goods as an option." In short, a marketplace is a digital commerce platform with many players: an Operator, Merchants and Customers.
- Better understanding of clients needs
- Always on the customer journey
- Product & services suggestions to customers
- Owns the data & organizes the network
- Adds value to the ecosystem
- Generates new revenue streams
- Profit from a unified experience
- Convenience at every step of the journey
- One-stop shop
B2B marketplaces create value by removing trade frictions between sellers and buyers in a market. The higher these frictions, the more distinctive the value proposition of a marketplace can be on both sides, leading to strong entrenchment in a specific trade, and ultimately, long-term prosperity. – Gopi Vaddi, General Partner, TCV
Marketplaces in the Automotive Industry
The automotive industry is fragmented, lacking transparency and coordination among its many players. However, marketplaces have emerged as a solution to unify the ecosystem. Traditionally, automotive transactions involve multiple intermediaries, leading to complexity and limited transparency. Automotive marketplaces address these challenges by consolidating the entire ecosystem into one platform.
Marketplaces can enhance transparency and streamline the buying process by bringing together buyers, sellers, lenders, and service providers. They provide comprehensive information on vehicles, pricing, financing, and additional services. Direct interactions between consumers and sellers reduce costs and promote fair competition.
Marketplaces also have the potential to integrate the entire automotive ecosystem, including vehicle purchase, financing, maintenance, and future mobility services. By owning the complete ecosystem, marketplaces leverage data to offer personalized recommendations and seamless experiences.
In summary, automotive marketplaces offer an efficient, customer-centric, and competitive environment in an industry known for fragmentation and opacity. Marketplaces have the power to revolutionize the automotive industry by unifying the ecosystem, fostering transparency, and streamlining processes, benefitting all stakeholders involved.
4 Automotive Marketplace MVPs
In this chapter, we'll explore four impactful Minimum Viable Product (MVP) strategies to help you stay ahead of the competition and enhance customer experience in a fragmented industry. These MVPs include the After Sales Ecosystem, Mobility Marketplace, Service Integration, and Used Cars Marketplace. Discover how these innovative marketplace models can reshape the automotive landscape, unlocking new opportunities, and provide enhanced experiences for customers and businesses alike. Join us as we explore four cutting-edge digital commerce solutions driving the future of automotive marketplaces.
After Sales Ecosystem
Create a B2B2C Parts and Accessories (P&A) Marketplace, connecting OEMs, dealers, and vehicle owners. Build your own comprehensive ecosystem for genuine parts, reliable services, and trusted networks to enhance the automotive experience for all stakeholders.
For automotive companies with multiple brands or business models, consolidating everything into a single platform improves the customer experience, cuts costs, and streamlines operations. This solution helps solve the issue of a fragmented user journey and enables new models to go to market more quickly – a vital capability among the top players right now, where agility is at a premium.
A digital commerce provider can enable automotive companies to create one interface or platform with which the end customer interacts. Within the single platform, processes are standardized for increased efficiency, while still allowing multiple brands to be customized. Different brands can share resources, such as products, warehouses, and processes, etc.
- One tech stack allows new features to be developed more quickly and effectively, resulting in a faster time to market.
- Each brand has the option to utilize certain building blocks in the platform, or not, enabling a high level of individualization.
- Consolidating all brands onto one platform saves money by reducing development and production costs, as well as opening up the opportunity to make larger, and therefore more economical, part purchases.
- The ability to add or remove components for different brands results in greater flexibility
Customer Highlight: ZFA B2B aftermarket portal that offers a seamless user experience
ZF's heterogeneous (40+) environments made it difficult for customers to order products and services across the different brands and portals. This kept the focus on maintenance instead of driving innovation and a seamless customer experience. Key challenges included: Lack of automation, 40+ disparate systems, increase in headcount to support all systems, high maintenance cost, lost revenue due to lack of innovation, and time-to-market.
One harmonized Enterprise Aftermarket platform. Utilizing Spryker, ZF Aftermarket will be able to offer one entry point for a customer portal that consolidates all relevant information for global customers, providing a faster and more seamless user experience. The B2B Aftersales Portal combines its brands and products into one platform offering cross- and upsell opportunities while connecting its distribution channels.
ZF will benefit from higher revenue due to
- more cross- and upselling opportunities
- higher average order volume
- higher customer adoption
With a mobility marketplace you can unleash the potential of financial services (VCI) with new business models and tap into subscription/leasing, flexible financing, and sharing/fleet management services. Mobility marketplaces can combine various services, including car sharing, rental services, subscription models, and ride-hailing, creating a one-stop-shop for customers.
Customers are looking for flexible mobility options that don't require owning a vehicle. Shared mobility is one of the big trends in the automotive sector and means big business for the future of the industry. Launching a mobility marketplace is one way for automotive companies to tackle several of the most pressing industry challenges : changing consumer behavior, diversification, and structural changes relating to sustainability and the environment. As the very concept of traditional car ownership is morphing before our eyes, it’s imperative that players look to the next generation of mobility to stay in the game.
To succeed in the mobility marketplace, companies must embrace digital commerce solutions enabling seamless customer experiences. Digital commerce technology enables automotive companies to become full-service mobility providers through a platform that combines all data inputs into applications for different connected use cases. These could include:
- Ride booking
- Automatic service appointments
- Predictive maintenance
- Ordering spare parts
- Managing payments
- Generating invoices
- Usage statistics
All of this data is used to establish a pay-per-use or subscription business model, such as car sharing and ride-hailing.
- A mobility platform with one backend lets you quickly and easily access all relevant information as the service provider.
- Offering a mobility solution improves your customer and brand experience, widening the potential customer base and offering more opportunities for personalization and engagement.
- The mobility sector is set to soar in the coming years, resulting in a high revenue potential.
- Launching a pay-per-use or subscription business model increases the diversification of revenue streams, contributing to increased resilience in a fluctuating market.
- As sustainability becomes increasingly important in the market, having a mobility model is a way to future-proof your business, especially if you incorporate EV technology.
Industry Example: Zipcar
Zipcar is a car sharing company with a network of self-service vehicles located in cities around the world. Zipcar allows members to reserve and access cars on demand, paying only for the time they use. They offer a range of vehicles to suit different needs, from compact cars for city driving to larger vehicles for transporting goods or people. Members can book and manage their reservations through the app, and fuel, insurance, and maintenance costs are included in the rental fee. By enabling flexible and sustainable transportation options, Zipcar aims to reduce congestion, lower emissions, and make urban living more accessible for everyone.
Service Integration through Customer Portal
Automotive companies are solving the issue of a fragmented customer journey by launching a digital customer portal that acts as the single touch-point for both end consumers and brands. Within this portal, it's possible to create service marketplaces that allow customers to connect seamlessly to certified resellers.
By enabling customers to connect to additional services whenever engaging with your ecosystem, you provide enhanced convenience for your end users and full integration of your network of partners.
A customer portal creates a full value chain experience by integrating partners or resellers and their services into a single platform. Examples of the kind of services or experiences this could enable include:
- Service planning based on contractual agreements or telemetrics
- Scheduled services carried out by certified partners
- In-vehicle commerce enabled via an app
- Geo-tracked offers allow the integration of local vendors
- By offering services and information along every step of the value chain from one portal, you increase customer experience and satisfaction.
- You can offer personalized and quick offers to end customers along any journey, increasing revenue potential.
- You can strengthen the relationship with your network of partners and resellers by integrating them into your portal.
Used Cars Marketplace
Seamlessly connect dealers and vehicle owners with an Auction & Bidding Platform, facilitating the buying and selling of used vehicles in the B2B, B2C, and B2B2C sectors.
Tieing into the trend for a circular economy, launching a platform for used vehicles or parts allows automotive companies to participate in the full lifecycle of their products, as well as offer a solution for customers with lower budgets. With manufacturing issues leading to fewer new cars on the market, second-hand vehicles, and spare parts are becoming hotter commodities. By offering a safe and controlled environment, the customer's brand loyalty and trust increase, while the company acquires a new segment of second-hand buyers.
After used vehicles are acquired, they will be inspected, repaired, or refurbished if necessary. The cars can then be sold on as entire units or as individual spare parts, with authenticity confirmed with serial numbers by the manufacturer. These will then be sold either through a 1st party platform or a marketplace.
Ultimately, launching a second-hand sales channel creates new revenue opportunities and capitalizes on the ability to follow the car purchase journey further down the funnel.
- With the new vehicle market as it stands, the second-hand segment stands to create a strong new potential revenue stream.
- You can increase customer loyalty and retention by providing a solution along the entire vehicle life cycle.
- It attracts a new segment of customers seeking more affordable vehicles.
- Offering certified refurbished vehicles enhances a brand's reputation and builds customer trust.
- A second-hand car solution opens up the opportunity for cross and up-selling through related products and services.
Customer Highlight: Alles.Auto (AVAG)
Alles.Auto (AVAG) is one of the leading automotive retail groups in Europe. The platform's primary goal is to simplify the car buying process by offering a one-stop-shop for all automotive needs, from finding the right vehicle to securing financing and insurance. They chose Spryker to build a used car marketplace with a simple and convenient shopping experience and end-to-end services across the entire customer journey. Alles.Auto chose Spryker because of our vision, out-of-the-box functionalities, and flexibility for both their current and future business models.
Spryker is the leading composable commerce platform for enterprises with sophisticated business models to enable growth, innovation, and differentiation. Designed specifically for sophisticated transactional business, Spryker’s easy-to-use, headless, API-first model offers a best-of-breed approach that provides businesses the flexibility to adapt, scale, and quickly go to market while facilitating faster time-to-value throughout their digital transformation journey. As a global platform leader for B2B and B2C Enterprise Marketplaces, Thing Commerce, and Unified Commerce, Spryker has empowered 150+ global enterprise customers worldwide and is trusted by brands such as ALDI, Siemens, Hilti, and Ricoh. Spryker was recognized by Gartner® as a Visionary in the 2023 Magic Quadrant™ for Digital Commerce and was also ranked as a Strong Performer in The Forrester Wave™: B2B Commerce Solutions, Q2 2022. Spryker is a privately held technology company headquartered in Berlin and New York. Find out more at spryker.com