Why Online Purchasing Still Lags in the Automotive Industry
This article appeared in the May issue of AutoSuccess Magazine.
Consumers today have the privilege of instant satisfaction with digital retailing and online buying. Nearly anything you can buy can be purchased online – clothes, groceries, workout equipment and even live plants. If you want it, you can buy it and have it delivered in just a couple of days and in some cases, just a couple of hours. Despite the advancements for digital retailing in nearly every other industry, the car buying industry still lags. While twice as many car buying customers start their research for a car online versus in a dealership, Less than five percent complete the entire car-buying process online.
The car buying process is complex, and virtually every deal requires at least one form of communication with a dealer. Digital tools have enabled more of the car buying process to be completed online, but yet customers still end up on the lot. Digital retailing breaks down and fails to offer a fully online car buying process in three main areas:
1. Dealer solutions aren’t bridged together to enable a simple, online process.
While many dealers offer pre-qualification for credit, trade-in valuations and insurance quotes online, often these various services use different tools that rarely communicate with each other. For any customer that has more than one step in their buying process, dealership solutions rarely connect the dots for a holistic experience. Take for instance a customer who has valued their trade-in online, pre-qualified for a loan, selected a vehicle and shopped for insurance. The estimated monthly payment may take into consideration one or two of the factors listed above, but rarely does it encapsulate all four to provide an accurate payment. Customers become frustrated when the monthly payment is calculated based on the trade-in value, but not the actual equity they have in the vehicle.
2. Online purchasing stops when personalization steps in.
Many car buyers want to personalize their vehicle before it rolls off the lot. Whether they’re looking to include tinted windows, floor mats or upgraded wheels, many customers want to roll that price into their purchase during the car buying process. Even if the digital retailing experience enabled them to go as far through the process to get to personalization, the buck stops there online. Dealerships simply haven’t connected aftermarket services to digital retailing – leaving customers to show up on lot to finish the purchase.
3. Communication tools don’t pick up where they left off.
Customers rarely sit down and complete the entire car buying process from start to finish in one sitting. Oftentimes, they start with a trade-in valuation and pre-qualification only to walk away before selecting a vehicle. But when they return, their chat record is deleted, trade-in value forgotten, and they’re left to start the entire process from the beginning.
Whether your dealership swears by no-haggle pricing or will negotiate from dusk until dawn, customers are looking to complete the car buying process online. And while most customers are pleased with completing just some of the process online today, you can be sure that patience will dissipate quickly before their next vehicle purchase.
As you evaluate your current digital buying process, start with these key questions to guide you to the right solutions:
1. Do my point solutions communicate with each other to enable a seamless transaction even in the event of a complex deal?
2. Do I offer a fully online car buying experience or are some of my solutions only accessible in store?
3. Can potential consumers pick up where they left off in the process of a deal or are they left to start from scratch if they leave the screen or visit the showroom?
4. Can I stay in constant communication with my potential buyer no matter their step of the online buying process to enable a frictionless experience?
While digital retailing may be lagging in automotive, it is certainly coming to our industry, and progressive dealers who ensure they have a solid experience for their customers today will be the clear winners tomorrow.
Take a look at the areas I have detailed above and you’ll be in good shape to grab the more than 95% of buyers coming your way through digital retailing channels in the near future.
-Michael Seeman, SVP of OEM Relations and National Accounts at CarNow