The evolution of the car buying journey
As consumers progress towards an ‘end-to-end’ online car buying journey, are dealers and manufacturers up to meeting the challenge?
Whilst the likes of Uber, Deliveroo and Amazon have fundamentally changed the way consumers source services and products such as taxi hire, fast food and general merchandise, it’s arguable that the absence of disruptors in motor retail has reduced the pressure on dealers and manufacturers to offer customers a fully integrated online car buying process.
Nevertheless, although dealers may not be facing the same level of demand to shift sales online as their counterparts in other retail sectors, the move appears inevitable thanks to the overarching shift in society towards online purchasing. This view is reflected by Roelant de Waard, Ford of Europe’s General Manager of Passenger Vehicles, who commented in an interview with Automotive News Europe that the move to online sales is in response to customer demand: “We have to offer customers another way in. It’s all about not prescribing how you want your customers to behave.”
Across Europe, brands already meeting this challenge include Alpine, BMW, Dacia, Hyundai and Jaguar Land Rover, as well as MINI, Mitsubishi and Volvo. They are responding by either running or piloting online sales schemes in specific markets. In addition, Geely is set to launch its new Lynk & CO car brand across Europe in 2020 with a strategy that is primarily based on online sales. Carlos Tavares, PSA Group’s CEO, also emphasised the strategy of Peugeot, Citroën and Opel/Vauxhall to increase online sales, informing investors this year that he wants to boost online transactions from 6,000 in 2018 to 100,000 by 2021.
Although the vehicle manufacturers are focused on the transition to online sales, the complexity of the car buying process, in terms of vehicle specification, finance product selection and determining a part-exchange value, present a challenge for dealers seeking to offer a multi-channel ‘end-to-end’ online solution. In response, dealer groups such as Arnold Clark and Vertu Motors are investing in ‘linked systems,’ such as the innovative NetDirector Auto-e platform from GForces, that joins these formerly disparate elements of the purchase process.
As well as giving customers greater control of their car buying journey, better integrated
e-commerce platforms are also providing dealers with a 24 hour showroom, with 52% of customer transaction taking place outside business hours and online enquiries resulting in a 60% conversion rate, according to GForces.
We are seeing a huge appetite from consumers wanting to transact online, putting themselves in control of the whole buying experience at a time that is both right and convenient to them.
The need for dealers to ensure future success by adopting a robust multi-channel approach that includes both online and physical dealership sales is also echoed by consumer research by Auto Trader which established that 45% of the 2,000 people they surveyed said they would be comfortable completing the entire car buying process online if they were looking for a finance product. In terms of demographics, it is notable the figure increases to 64% for 18-34 year-olds, reflecting a greater preference to buy online among younger consumers. Dealer showroom presence was also found to be important to customers, with the Auto Trader research revealing that 74% of those questioned saying that they would be reluctant to buy without speaking to a retailer in person.
Nathan Coe, Auto Trader’s CEO-Designate, explains: “Dealerships will remain central to the world of automotive retailing, but they will have to evolve as the ‘one size fits all’ approach is fast becoming redundant. Retailers will need to adapt to provide a blended experience for consumers so they can choose the right journey for them, be it online or offline, or a combination of the two.”
Nathan Coe concludes: “The future is about digitising the ecosystem to enable retailers to move to a less labour and property intensive model that better serves car buyers. Successful retailers will embrace technology , invest equally in their online platform, as they do their physical one, and re-evaluate the physical elements of their cost base to run more efficiently.”
Supporting dealers at this time of transformation and digitisation is equally important for third-party brands in the showroom such as Autoglym’s LifeShine. As a leader in car care for over 50 years, Autoglym works with motor retailers across a range of brands and franchises, helping them secure incremental business through the LifeShine Vehicle Protection System (VPS) by harnessing of the strength of the Autoglym brand.
As well providing the best depth of colour and maximum protection as judged by independent testing, LifeShine is the most profitable VPS solution for dealers with average increased penetration rates of 8.6%, when switching from another brand. To discover how LifeShine can generate incremental revenue for your dealership, please get in touch.
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