In the era of AI,  how can terminal stores utilize high-tech tools to address profitability challenges?

The revolutionary changes brought to terminal stores by high-tech growth tools created using AI and MR technology are transformative. The behavior of technicians during inspections is fully controllable, operations are entirely intelligent, and inspection accuracy approaches 100%. Customer satisfaction has also increased, with numerous opportunities for additional services discovered every day.

Good afternoon, everyone! My name is Xie Hongfei. Although my professional background is in IT, I inadvertently found myself in the automotive aftermarket industry and have been deeply involved for nearly 20 years. Leveraging my expertise in IT and combining it with the strengths of the automotive aftermarket, I have ventured into the IT industry to develop digital products. Today, I will be sharing on the topic "Solving the Profitability Growth Challenges of Terminal Stores through AI and MR Technology."

Everyone knows that it's tough to start a business nowadays, and making money is difficult. I believe it's not that the automotive aftermarket isn't profitable; it's just that the game and rules have changed. If you find it challenging to open a store, you must find new methods to break through. The old map will never lead you to new roads. So, how can AI and MR solve the profitability growth challenges of terminal stores?

AI, or Artificial Intelligence, and MR, or Mixed Reality technology, may seem distant from our experience of repairing cars, but I assure you they're quite relevant. Every economic development is linked to technological advancements. If we continue to operate our stores using traditional methods, our development will be challenging.

From last year until now, one of the hottest topics in AI should be Chat GPT, which exploded onto the scene and ignited the entire tech community. People are beginning to realize the immense power of artificial intelligence, which is replacing many manual tasks. MR, which emerged around the Spring Festival this year, has brought us to the doorstep of the virtual world.

Today, we're implementing AI and MR technology into the automotive aftermarket, hoping to empower stores with these new technologies, making store management more intelligent and effortless. Through the growth brought by this new high-tech, we aim to boost business in terminal stores. When utilizing such high-tech to create new profitable growth tools, it's essential to address specific problems. Currently, stores face issues like customer flexibility, low conversion rates, and customer retention.

So, next, I will share with you how to establish the core business scenarios of the store, enhance the store's conversion capability, and maintain customer retention using the intelligent store app built with AI and MR technology.

First, establish the core business scenarios of the store. In repair shops, the most common scenario is the inspection scene. The better the shop, the more emphasis it places on vehicle inspections upon entry, as inspection is one of the few effective means of identifying customer spending needs. Inspections can uncover numerous sales opportunities, improve customer satisfaction, and prevent disputes after repairs. However, through market research, we found that 99.9% of shops fail to conduct inspections properly. Many shops perform inspections hastily, especially during peak hours when there's high traffic and a large number of people. If inspections are not conducted properly, a lot of potential transactions will be lost. The main reason for this is the lack of enthusiasm and seriousness among employees. If they are not closely supervised during inspections, they tend to be careless. Similarly, standardized processes rely on traditional management methods, resulting in low efficiency and poor quality. How can we address these issues through digital empowerment?

By using the intelligent store app, it solves the problem of standardized implementation. Its impact on stores is revolutionary. Once this tool is available, all technicians' inspection behaviors become fully controllable, and their operations become entirely intelligent. The app can intelligently match inspection templates based on factors such as the vehicle's model, mileage, and service history, making inspections convenient and efficient, and accurately identifying service needs.

During inspections, technicians only need to aim the camera at the area being inspected and take a photo scan. We will assist technicians by informing them of potential problems in that area, which they can confirm. The inspection process is straightforward, easy to operate, and can efficiently detect vehicle issues. Furthermore, each inspection action is recorded and verifiable in the background. This means that the accuracy of inspections for every vehicle entering your store is close to 100%, and technicians face minimal difficulty in their operations. Many technicians can accurately identify vehicle issues and conduct high-quality inspections, leading to increased customer satisfaction and numerous opportunities for additional services discovered daily.

For example, with the traditional inspection method, each vehicle may have three potential opportunities for additional services on average. However, with this tool, it may increase to five, eight, or even more. Each additional service opportunity represents business and cash flow, contributing to your profits.

Next, let's look at the second point: enhancing the store's conversion capability. Every day, employees conducting standardized inspections discover numerous sales opportunities and additional service possibilities. However, closing deals is often the most challenging aspect. Customers tend to be resistant when our service personnel, technicians, or even the owner recommend additional services. Typically, stores close deals by presenting customers with a quotation, but if the employee cannot explain clearly or the customer cannot understand, misunderstandings may arise. Eventually, customers may feel that the recommended services are merely attempts to make them spend money, even though these services address genuine vehicle issues.

Through the Smart Store App, an invisible interactive terminal, employees can transform into highly capable service consultants within five minutes. This significantly improves the conversion rate of transactions. The app presents all the real vehicle issues that customers previously could not understand or see directly, effectively convincing them of the necessity to address these issues.

Additionally, by digitally showcasing the store's professionalism, on-site project conversion rates can be increased by 50% or more. Many new customers may choose to stay because of the impressive scenes they witness upon entering the store and may even share their experiences on social media to attract more customers.

The third point is to build the store's continuous customer retention capability. Many automotive aftermarket stores resort to TikTok or other platforms for customer acquisition because they feel that their stores lack customers. However, after operating for more than three years, a store should have accumulated many customers, but these customers do not return. Why not? Even with various package cards and marketing initiatives, customers still do not return because their service needs are not adequately understood. Therefore, the third highlight of the Smart Store App is to help stores build their private traffic pool, turning customers into true assets that can be continuously activated.

Because 75% of a store's profits are generated by 25% of returning customers, continuously expanding the customer base and core users and creating a scenario where customers frequently repurchase will eliminate the need to rely on other platforms and traffic sources. With the Smart Store App, each customer's inspection results will generate a personalized service report, predicting all of the vehicle's short-term and long-term consumption needs for the year and even throughout its lifecycle. Moreover, it can generate intelligent follow-up plans and communication templates, guiding employees on how to track and invite customers back to the store.

Furthermore, some features can activate the WeChat ecosystem, perform WeChat Moments ecosystem fission, attract new customers, and encourage continuous repurchases. This maximizes the value of customer traffic with minimal costs, continuously generating consumer value, and can even serve as a reference for inventory stocking. This scenario increases customer repurchase rates by at least 50%.

The Smart Store App is also applicable in the field of new energy vehicles, where vehicle light modification projects can be showcased. Remote modification proposals can be sent to customers, who can then place orders remotely. For used cars, it provides transaction capabilities, starting from inspection, assessment, and all the way to the transaction process.

All of this is actually very intelligent. Industrial core technologies enable all business operations to be carried out in a foolproof manner, allowing employees to quickly acquire high business capabilities. According to the data collected from the stores we have collaborated with, these stores have achieved significant business growth. Many stores have essentially tripled their business, and around 70% to 80% of stores are able to recoup their entire investment costs in about a week.

The era of AI and artificial intelligence has arrived, and we must constantly equip ourselves with new tools to serve new customers and usher in new growth. I am also willing to communicate and cooperate with fellow practitioners, and together, we can develop and promote the transformation of the entire technology industry. Thank you all!

★ Disclaimer: The material for this article is sourced from the Terminal Rise - Transformation 6th China Automotive Service Industry New Trends Conference and the AMR2024 Frankfurt Tianjin Exhibition official forum. The provided content is for reference only. Copyright belongs to the organizers of the event. Please do not reproduce. Our company is not liable for any direct, indirect, incidental, special, or consequential losses.