Three Reasons to Believe Digital Retailing Will Help Future Proof Your Business
The days of salespeople herding near the front of the dealership, waiting to ‘sell’ a car to the next under-informed ‘up’ are nearly in the rearview mirror. Instead, leads generated online have sales professionals looking to meaningfully connect and help informed customers ‘buy’ the car. In auto retail, a digital-first approach is quickly becoming the norm for many dealers and dealerships.
The environment has changed.
Dealerships big and small have an opportunity to capture the business of the local or next-market-over virtual car shopper. Whether it’s fully online or an omnichannel purchasing experience, dealers should be preparing to sell the way customers prefer to buy and offer a more flexible, modern retailing experience.
1. Making the ‘short-list’ starts online
It’s expected that automotive ad spend in the US – focused on influencing consideration and purchase intent – will top $13 billion during 2021. That’s because more than 95% of shoppers will use online research as their primary source of information before contacting a dealership. By the time dealers receive an inquiry online, consumers have typically visited four or more sites for research.
With so much information just a click away, it is important to know that a typical car buyer visits just 2 dealerships after doing their research. What does this mean for car dealers? It means your best chance at making a good first impression happens online because that’s where the buyers are. It also means you will need to meet the customer on their terms. Make it easy for the customer to find the information they are looking for – at every stage of the process – from curious to committed.
All available research indicates the overwhelming majority (91%) of shoppers still want to complete the transaction in-store and 80% of consumers would never purchase without a test drive, but you first have to make the buyers shortlist. You have to win the deal online before you can expect to win in the store. Lead forms push people away. Sell the car, not the appointment.
2. Buyers are increasingly comfortable buying online
The 2021 Cox Automotive Digitization of End-to-End Retailing Study found that 76% of shoppers are open to the idea of buying completely online. The same study indicated car shoppers had specific preferences to receive a trade-in offer, get prequalified for financing, finalize the purchase price, select F&I products, calculate payments and arrange a test drive – completely online, clearly spurred on by the pandemic and related restrictions.
It’s a segment led by millennials who are widely considered digital natives who want you to “court them actively”, according to Vonage. Whether it’s the millennial car buyer or most any other demographic, convenience and speed are driving the strong preference to complete many of the steps of the car buying process online, prior to visiting the physical dealership.
Think of it like this: The goal of a Digital Retailing strategy should be deal generation. It is the start of the deal. It is not lead generation. According to a Cox Automotive study, 90% of U.S. car buyers are payment buyers. If most shoppers want to lock in the final purchase price, receive a trade-in offer, and know what payment and finance terms they qualify for, prior to making a buying decision, make it easy and convenient for shoppers to find the information they are looking for. The information transparency just makes sense: The more customers know, the more comfortable they are. The more comfortable they are, the more likely they are to buy.
3. Post-pandemic preference for lower-touch transactions will continue
The retail automotive marketplace and the way cars are sold – have likely been forever changed by the pandemic – like all other retail environments. In the post-COVID new normal, there will be many who will continue to prefer the convenience and safety of transacting remotely. Dealers will have to continue to find ways to sell the way customers want to buy.
The most successful businesses in every industry build customer processes around what the majority of customers want. By choice or by force, the adoption of digital retailing buying experiences significantly accelerated as a result of the Pandemic. It’s the dealers who adopt and implement a ‘customer-first, digital-first” approach to retailing that will continue to win with buyers, drive profitable growth, and win at the expense of the competition for the foreseeable future.
Author: Pete Maclnnis
Author Bio: Pete brings over 37 years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric, eLEND Solutions™ is an automotive FinTech company specializing in online and in-store digital credit, identity and finance solutions designed to create a more efficient and profitable vehicle purchase process for the retail automotive industry.