Today’s car buyers expect a seamless, engaging experience. This fact is forcing automotive retailers to convert their traditional vehicle sales processes into hybrids of online and offline experiences that lead to the sale. This is a huge shift that we’re witnessing in real time through automotive digital retail methods and now we have a study to confirm it. The latest EY Mobility Consumer Index (MCI) study shows that car buyers want a digital-first experience but one that offers online convenience with the reassurance of personal interaction with dealer staff.
This post is sponsored by Ernst + Young UK. As always, all opinions are my own.
Removing barriers to the sale in automotive digital retail
Over the past several years, I’ve often witnessed sales processes that make it harder for people to buy. Removing barriers to the sale has always been integral to successful automotive retailing. It’s even more crucial in the digital era because the competitor is only one-click away.
Delivering a great customer experience before, during and after the sale solidifies a retailer’s domination in their market. A car represents a milestone in someone’s life. It’s a major financial commitment, and the in-person experience is important. The majority of consumers still prefer physical interactions when it comes to both trying before they buy and, ultimately, parting with their hard-earned money.
According to the MCI study, while online interactions are on the rise, physical ones continue to dominate with only 38% of buyers preferring virtual showrooms over the traditional dealership environment for pre-purchase viewing and testing, while even fewer – 23% – prefer online channels for final purchase.
Challenges adapting to the shifting retail landscape.
Gone are the days when dealerships was merely physical spaces that employees occupied during regular business hours. Today’s always-connected, instant access environment has blurred the lines between the physical dealership and digital spaces where leads and sales can also happen.
Additional challenges appear as retailers must develop processes to convert online leads into in-store visits. When it comes to the intersection of people and technology, coupled with adapting quickly to a shifting retail landscape, these challenges need to be met head on with updated processes, training and development.
Physical interactions remain key in customer expectations.
The MCI study showcases that the majority of car buyers aren’t comfortable buying entirely online.
- 63% of car buyers prefer visiting a traditional dealership to see and experience the car physically.
- 55% of car buyers visit multiple dealerships to get the best quote.
- 64% of new car buyers prefer dealership showrooms to transact their purchase.
Car shopping vs car buying
Digital is valued part of the car shopping experience: 65%of Gen Z, 69% of millennials, 66% of Gen X and 60% of boomers prefer to use online tools to gather pre-purchase information.
But when it comes time to purchase: Only 13% of boomers buying new cars prefer to actually purchase a vehicle online, rising to 20% of Gen X, 28 % of millennials and 37% of Gen Z.
So even where so-called “digital natives” are concerned, it’s not a case of either physical or digital but both.
Car buyers want to complete most or all of their research and paperwork online as well as guide their own financing process. They also want to evaluate extras like extended warranties in a more transparent way and at their own pace.
But in-person test drives and close-up evaluations of vehicles are must-haves for many buyers and are barriers to online shopping. But how long are most people interested in spending at a physical dealership? One hour, max.
Car buyers are served best with a combined online and offline retail strategy.
For a retailer to serve its customers today, employees must be comfortable communicating with customers in nontraditional ways. Employees must develop their “digital fluency” to build customer rapport.
There are many moving parts and they’re moving more often than ever before. Running concurrent processes smoothly is paramount.
Traditional components of great customer in-store experiences are still prevalent:
- Happy, helpful employees
- Clean, welcoming environment
- Respectful interactions
- Overall delightful experience that customers can’t wait to tell others about
The industry must now work towards duplicating those experiences online.
- A lightening fast, optimized, inviting, information-packed website that delivers everything a car shopper expects.
- Digitally-fluent salespeople who are adept at omni-channel communication.
- Online reviews that show high satisfaction from other customers.
- Email lead followups that are well-written, proficiently move the sale forward and build rapport using salesperson introduction videos.
- Google search that shows welcome adoption of online platforms, including positive results on salespeople.
The blending of a digital “online” shopping experience with traditional “offline” car shopping requires alterations to operational processes to better serve the customer.
The new operations model is an ongoing automotive retail challenge and with so much at stake, so much in flux, and competing business models attracting car buyers at every turn, manufacturers and their dealers would do well to foster the strongest partnership possible.
OEMs could develop and offer training initiatives to address the complexities of online/offline consumer behaviors. Selling cars today can often feel like a game of whack-a-mole. Manufacturers could implement more advanced digital metric benchmarks to foster digital transformation, which would lead to higher sales and exceptional customer experiences.
Even customer relationships are changing
Selling vehicles is a more complex and nuanced venture today. Digital retail is fueling a battle for the customer between dealers – who have traditionally owned the relationship with their customers – and OEMs, who have not.
Success for both OEMs and their dealers will depend on an appreciation of how those nuances apply to them, and on a willingness to continuously evolve new business models and revenue streams that facilitate a seamless, integrated customer journey.
Today, automakers attract customers from a branding standpoint, creating interest in the brand and setting up sales opportunities for their retailers. They do not own the sales process and therefore, the customer.
To flourish in this new world, the entire industry must evolve – fast. Automakers must build meaningful and lifelong relationships with customers and redefine their partnerships with dealers. And dealers must evolve to become brand curators and convenience-driven service providers.
The sales relationship will continue to be consumer driven.
Online and offline, consumers will continue to govern the car purchase journey by displaying behaviors of how they want to buy. It’s up to the industry to listen, assess the data and take quick action to meet car buyers’ expectations to capture marketshare.
It’s no longer safe to be on the fence about revamping operational processes in automotive digital retail. The complexities will continue to increase and I’ve always advised clients to not play catch up.
One of my heroes, car dealer Carl Sewell, who wrote the book, “Customers For Life.” He published that book in 1987 and in the case of pleasing and retaining customers, not a lot has changed. He always said, “Figure out what the customer wants…and give it to ’em.”
This is the second of four sponsored articles exploring the results of the Ernst + Young MCI study, along with my own insights on how those results can be useful to retailers’ automotive digital retail strategy. Contact me here for guidance or questions.