Omnichannel Online Car Buying Experience - With a 2-Week Test Drive

Car prices and buying have fallen off a cliff as a result of the pandemic, allowing innovators to create a digital shift in the industry.

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Carvana and CarMax are currently proving Newtonian aspects of post-COVID commerce - that is, what goes up fast can come down just as fast - but the idea of buying cars online has a stickiness that is attracting some buyers from the rest of the world.

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It is a proud moment for Tarek Kabrit, CEO and co-founder of Seez, after starting out in 2016 with a simple but powerful mobile app in the United Arab Emirates that is now growing across Europe with aspirations and funding to take on large swaths of the continent and beyond.

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Kabrit, one of the co-founders of Seez, told PYMNTS' Karen Webster: "We had to make a choice when it came to financing Seez. If we want to be able to grow our business, then we must either cut our costs and extend our runway, in startup lingo, or we need to take a step back and ask, “How is the world going to change?”.

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In order to meet the needs of dealers, Seez went for the digitization route. It has become the third most popular app in the UAE after Tinder and the telcos. As a result, the company demonstrated that a car could be sold online in a matter of minutes, from start to finish. There was a resounding response from both dealers and buyers to that.

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At the same time, "the OEMs, such as the BMWs of the world, were moving into something they call the agency model, where they sell directly to consumers like Tesla, which is also disrupting dealer operations," said he. Seez was able to offer a solution to dealers who needed to reinvent fast, and they did it with ease.

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It was Seez's asset-light model that enabled it to not own inventory, but rather to play the role of an online marketplace matchmaker, bringing together sellers and buyers, that was another big breakthrough. Kabrit added that "we also felt there was a great opportunity from a SaaS perspective to become a Shopify for car dealers in order to help them move into the digital age through their use of our SaaS solution." Since then, our focus was shifted to those two products.

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Asset-Light Models Lift

Having chosen to be asset-light and offering Software-as-a-Service (SaaS) to dealers in the post-pandemic world has been a successful strategy as Seez has strategically and successfully expanded throughout Europe, generating a lot of interest and profit.

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In other words, Kabrit operates both as a digital marketplace for dealers on one hand, as well as equipping dealers with a SaaS solution in order for them to do it on their own on the other, saying: "for us, it's all about taking it the whole way". The process of getting financing, buying insurance, and signing can all be done digitally. There is even a digital trade-in option that we offer."

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In spite of this, he admits that most people still prefer to see, touch, and test drive cars in person. In order to eliminate the doubts of consumers, Seez does no own any inventory, which puts them at ease, and then by allowing them to drive off and test drive the vehicle for two weeks and return it if they do not like it, Seez shuts out the doubts. He goes on to say that that two-week "kick the tires" test drive concept has proven to be a major selling point, and he goes on to say that 83% of shoppers don't buy on the first visit, but once they have decided, "going back to that dealership is a total waste of your time.". There is no point in going back and signing documents and sitting for an hour drinking bad coffee at a dealership. Having the ability to move between online and offline is a crucial component of the omnichannel experience, which we strongly endorse."

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It has even taken a page out of the playbook of IKEA, whereby car buyers are given a QR code for the car they like at the dealership, and if the next day they decide to buy, they scan the QR code with their smartphone and the transaction can continue where it left off, accelerating the purchase process.

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This digital transformation of the car buying experience, which has now reached about 2% of all transactions, is going to substantially increase over the next few years as a result of this digital transformation, Kabrit said. Over the course of the next 10 years, it is expected to reach between 20% and 30%, not 70%, but in some cases even higher."

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$3T Market Optimization

Although Kabrit admits that the auto industry is still facing headwinds from chip shortages to gas prices, he said that things are improving and Seez, with its unique expansion strategy, is taking advantage of the opportunities. Especially in the Nordic and European markets where Seez is selectively entering, the action is good, especially with the extra demand from former city dwellers who fled to the hinterland and now have a need for a car. According to him, "cars, unlike other expenses, like movies or restaurants or whatever, you end up delaying them, but you don't end up cancelling them," he said. There will come a time when you will need to replace your car at some point. Consequently, you end up with a lot of pent-up demand that gets put off until later.

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The Scandinavian region was fertile ground for Seez because it was a first mover in that region due to the fact that no one was doing this in that area. Currently, Sweden and Italy are under consideration for the year 2023.

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“It is suggested that in the Nordic region or smaller countries, we will go with a two-phase approach with both a marketplace and a SaaS solution,” he said, whereas in large countries, the company focuses on SaaS because “building a marketplace there is very expensive from a marketing standpoint,” then introduces the marketplace component after a few months.

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It has proven that partnering with the largest automotive bank in Europe and the biggest insurance company in Scandinavia has been an accelerant for growth into SaaS. From BMW to Tesla, the OEMs who are doing more direct selling are shaking up dealers, driving their digitization agendas as a result. Seez is ready. Although Seez has a mountain of data on its hands, and while it is not selling that data at this point in time, Kabrit said, "we are using a lot of that data as a basis for a lot of artificial intelligence algorithms, whether it's for valuing cars, customer segmentation, recommendation engines, and stuff like that." Eventually, it will be an attractive asset for the ecosystem over the long term.

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While he believes that there is a great opportunity for someone to come up with a data-driven approach to converting leads, when it comes to optimizing the $3 trillion automotive market, it is important not to neglect the omnichannel angle.