What you need to know:

• Since launching an e-commerce platform 18 months ago, Volkswagen has sold more than 600 cars online.
• Models including the Caddy, Amarok and California sold out in minutes, sight unseen.
• The agency that built the platform was in danger of losing the account. But it has instead helped jump start VW's multimillion dollar higher margin direct-to-consumer business.
• Marketing boss Rowena Kanna says the site has given the brand deeper consumer insight while opening up parts of the funnel other initiatives had failed to reach.
• Led by DDB's digital agency Tribal, the brand is now readying to expand the direct model beyond vehicles and into products and accessories.

Warning light

Three months before launching one of the largest digital plays in Volkswagen's history, the brand was readying to give its digital agency, DDB's Tribal, the flick.

Marketing Growth Manager, Rowena Kanna, informed Tribal boss Davy Rennie that the auto manufacturer was calling a pitch and "she didn't like his chances".

The brand was looking for something new, as Volkswagen forged ahead with its global digital transformation strategy, OneHub, despite Tribal being party to the platform for the last five years.

"It was five days to respond to the brief and another five to get it to market – we didn't want to muck around," Kanna told Mi3.

"Even though Volkswagen is under the one roof within DDB and Omnicom, we still wanted a big idea from Tribal. They'd made a lot of promises and they managed to come through with the concept, so we gave them a chance to prove it."

Tough talk indeed.

What followed was a four month turnaround to launch an e-commerce platform, which Volkswagen claims is a first for the Australian auto market.

Originally intended to provide consumers with a digital destination to pre-order and gain further information on the brand's range of vehicles, it quickly evolved as the pandemic struck.

In a matter of weeks, it became the only lead generation and sales tool for Volkswagen.

While many brands, and most of the world, hadn't been fully prepared for a once in a century global plague, Volkswagen had fortunately already been planning to revamp its digital strategy in bid to counteract a decline in the new car market.

"We'd already expected a bleak year for the category in 2020, which is why we were undertaking a wider brand and digital refresh," per Kanna.

"That meant we were already on the front foot. However, moving to online sales is quite a big deal when you factor in payment and how you work with dealerships.

"So the plan was to get to market with an online product that would continue to evolve based on the ongoing [consumer behaviour] changes – something that we are still doing right up to now."

Volkswagen used a combination of Adobe's Experience Manager, Salesforce/Heroku and Stripe to manage the hub and brand sites, so Tribal and tech partner Katzion had to create an e-commerce system that would work with these platforms. 

Given the sword of Damocles hanging over the account, and the no-nonsense timeframe, it sensibly opted for a combination of existing modules and local pages while plugging in Stripe for the payment system.

"We opted for that over implementing something like Shopify, which would have forced us to go through several levels of global approval," said Rennie.

"This will change over the next couple of years, when VW global rolls out its own solution that involves more complex parts of the purchase journey – especially around customisation, stock availability and tracking orders. But we had to get the solution out quickly without getting bogged down in everything else.

"It was a risk," suggested Rennie, "but instead of spending hundreds of thousands of dollars on licenses and customer development, we went down the route of open source, something easy to use with a low cost."

Trump card

While brands across the board flew into digital transformation and direct-to-consumer models, the automotive sector had to consider its sales engine – dealerships.

Dealers were crippled in the early stages of the pandemic by lockdowns and then distancing restrictions. Few models afford a full 1.5m between driver and salesman-passenger.

Hence, when designing the platform, keeping the dealers happy with the overall process was paramount, according to Kanna.

"Everything we are doing is to convert the lead to a sale – at the end of the day and that remains at the dealership," she said. 

"It needed to be seen as improving the existing car purchase journey, not reinventing it. It’s about facilitating the ease in the path to purchase, rather than creating a whole new system that frankly consumers aren’t asking for."

As such, Tribal was tasked with ensuring dealers were kept in the conversation with potential customers.

Rennie said the trick was keeping the "art of the deal" as part of the one-to-one consumer journey.

"The customer really wanted to keep the element of the deal present – 'can I have a black spray here, an extended care plan or I saw this cheaper here, can we do a deal' – those types of very physical conversation," he said.

"It's an important part of the customer journey, so when we go forward with different iterations of the digital model, we’ll look at incorporating the interest of a deal," Rennie explained. "That could be a bot that's able to respond to the simple question and then have a dealer step in further down the line."

To assist in a smoother process for dealers, Volkswagen is also plugging in finance capability later this year, in direct response to a common customer complaint.

"Often you go into a dealership, you sit there for a period of time while a dealer fills out a paper-based form to get financial approval," Rennie says.

"Moving that online was a logical next step, as it becomes part of the overall online sales journey and makes it a value add as well for the brand.

Volkswagen and Tribal also introduced several location-based services to ensure the right dealer was being matched to the closest customer.

Car-tology

Kanna says the process has also changed how it considers dealers within the marketing funnel, with the creation of an e-commerce platform adding new stages of consideration to the process

"It's now about understanding the traditional funnel, alongside the new digital channels we've opened up - so where are those people at the pointier end and how do we drive them to the website? Then how do we optimise communications to fit within their journey and eventually push an online order?" said Kanna.

"The team is running A/B testing on what people are more likely to engage with, whether that’s an online order button, find out more or book a test drive. 

"We find that if it’s at a prospecting level or a retargeting level, the message or call to action has to be adaptable and that can be as niche as going by car model. It isn’t a one size fits all method."

Next gear

After selling 600 new cars sales over the last 18 months Volkswagen and Tribal are working towards the next stage of its online store.

"It's been a bid brand building exercise for us as well, essentially launching a completely new product. We've also been able to tap into areas of the digital commerce ecosystem that auto brands wouldn't usually play in, like Click Frenzy and other online sales events," says Kanna.

The brand is upping its investment in the platform but remains cautious as to not over-invest and leave other areas of Volkswagen's marketing mix underfunded.

"Money has to move differently and in this day and age, I don't think there are many marketers who are able to say their budget continually increases," she says.

"But equally, this is not about investing into something that is providing a 'perfect platform' and expecting it to do everything. It’s about getting to market quickly, in an agile way, which means it can be cost-efficient and continually grow.

"[The investment] also doesn’t come out of one bucket. If you take it all out of above the line for example, that can end up being damaging to our brand objectives. This is where its important to have reliable agency partners to put the challenge out there but keeping the process fluid."

Rennie agrees and says the agency is working towards finding the next iteration of the Volkswagen online store, which is likely to be further improvements and additions to its augmented reality (AR) capabilities.

In the last 18-months, the site has had over 15,000 interactions with its AR car walkthroughs.

He says this is an indication that consumers are now adjusting to the new technologies that improve the buying process – and that digital transformation has plenty of road left to run.

"We know people are more likely to buy cars when they experience them, so the challenge becomes how can we get them to experience the whole vehicle faster than ever before to speed up the buying process," Rennie says.

"That’s where also building out the site to incorporate services, not just product is also important. It give people an opportunity to view the brand as more than just a transactional experience."

Amid current debate about unbundling, Rennie thinks agencies can also help brands get more from their martech stacks.

"If you talk to Adobe or Salesforce, you find a lot of the brands that have brought into their services, generally only unpack about 10-15 per cent of the potential of the product.

"So instead of abandoning these enterprise solutions early because it’s not achieving the ROI it was sold in as, we’re really looking to these products to unpack more value consistently – that's what we are telling clients.

"They're expensive for a reason and agencies need to delve deeper and push them to the point where they do break – then they can have a conversation with those providers to figure out a workaround solution or what they can do to improve on the significant investment they've made."