April 22, 2019

Car rental in a mobile-first age

Pioneering and mobile-first. These aren’t two words that you’d probably associate with the car rental sector. Hiring a car usually involves physically going to a desk, signing paperwork, and returning the vehicle during opening hours so a representative can check for any damage. Standing around in a car park hardly makes for a great traveller experience.

Changing behaviours

Recent data from Epsilon-Conversant (quoted in Phocuswire) revealed that 63% of car rental customers reduced their spending on rentals between Q2 2016 and Q1 2018. In fact, more than half (56%) stopped using car rental services entirely in that same period, highlighting a considerable change in traveller behaviour. This is partly explained by the fact that, whilst ‘traditional’ car hire firms have been slow to invest significantly in overhauling their mobile programmes, new entrants riding on modern technologies – such as car hailing apps and peer-to-peer ride-sharing companies – have made significant steps forward in the market through mobile channels. This has motivated some of the biggest names in the industry, such as Avis, to update their business model and leverage their digital power – either through acquisitions or strategic partnerships (as reported on Autonews.com).

At the same time, Phocuswright predicted in its U.S. Car Rental 2018 report published last December 2018 that mobile bookings of car rentals will grow from a predicted 8% share of total bookings in 2019 to 11% by 2022. This would suggest it’s high time car rental companies rode the digital wave. In fact, it’s a must if they are to stay relevant and competitive.

Personalising the traveller experience

With the market becoming quickly saturated, car hire brands need to increase their focus on offering a personalised and seamless product to customers if they are to stand out from the competition. Just like we expect our favourite online brands to tailor content to what’s most relevant to us at any given moment in time, modern travellers expect their car rental company to deliver a flawlessly integrated customised journey – from pick-up location, vehicle type and preferred insurance extras right through to the payment method.

Be where your customer is

Marketers once used to speak about a ‘mobile-first’ world. In reality, the last few years have been defining in accelerating the shift towards a ‘mobile-only’ ecosystem –  as exemplified in certain regions such as Asia Pacific. The majority of travellers will use a smartphone in the booking process, whether that’s a mobile web browser or an app. At Skyscanner, for instance, mobile currently accounts for more than 60% of all traffic.

This is both a curse and a blessing. On the one hand, it’s an unprecedented opportunity for brands to interact with their target customers when they are already engaged through a device that they always carry with them. On the other hand, this is only possible if car rental brands make the conscious decision today to invest in creating a compelling digital customer journey. Leveraging new, mobile-first distribution channels is also key to reaching wider audiences in perhaps previously untapped or underserved markets.

On the road to data-led decisions

App-based rideshare services hold a wealth of first-party consumer data, traded in exchange for a more personalised, tailored experience. Whether a small independent car rental business, major multinational, or peer to peer operator, players in the sector should maximise the power of data analytics to make smarter business decisions.

With over one million car hire searches performed each month, Skyscanner is already helping car rental companies reach wider audiences of engaged travellers when their intent is high. Its strong reporting capability is providing partners with actionable insights around market trends and share of voice.

The time to evolve is now. The car rental sector should continue to look to industry disruptors and seize the opportunity to realign their business goals with traveller expectations. Those who manage to so successfully will thrive today, and for years to come.

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