Industry Insights: The Rise of the Online Dealership and the Future of Auto
Maya Rector • May 20, 2020
Not too long ago, walking into a car dealership, shaking hands with a member of the sales team, and test-driving several vehicles on the lot was considered a typical car-buying experience. Flash forward to today, and the automotive industry could not be more different. Given the Covid-19 pandemic, consumer behavior and preferences have changed - and will remain altered even in the aftermath of current events. Keep reading to learn about the rise of the online car-buying experience, changing consumer expectations, and the future of the automotive industry.
The Online Dealership
The idea of buying a car online isn’t an entirely new concept. Even before wearing face masks and religiously disinfecting surfaces became a part of our everyday lives, consumers have shown interest in e-commerce options for purchasing their next vehicle. In a 2019 Digital Commerce 360 Online Vehicle Shopper survey,
49%
of consumers stated that they were willing to purchase a new vehicle entirely online - and the proof is in the numbers with automotive e-commerce bringing in
$14.6 billion-a-year
in business.
Although purchasing a vehicle online may sound staggering, customer preferences for online options have risen in popularity even more than previously anticipated this year due to health and safety concerns. In April of 2020, 18%
of auto shoppers said they would buy a vehicle sooner if they could purchase the vehicle they wanted without going to a dealership. With automakers offering touchless drop-off and return services, sanitizing vehicles before returning them to customers, and providing valet services that were previously unique to luxury brands, tapping into the appeal of online shopping has been a favored tactic moving forward. Several major automakers, such as General Motors and its Buick, Cadillac, Chevrolet, and GMC manufacturers have offered "Shop. Click. Drive." programs long before the pandemic began. Meanwhile, companies such as Fiat Chrysler Automobiles have dramatically accelerated their online buying roll-outs to adjust to the demand for online alternatives. So what exactly can an “online dealership” look like?
While you can say goodbye to big in-store events, there’s still hope for driving business to your dealership even if it's from a distance. For example, auto dealerships can implement online events, digital showrooms, online shopping options, offer at-home test drives, post informative review videos, or even offer virtual reality test drives and showrooms. Some brands are even creating buzz by revealing their latest models via livestream, such as Hyundai’s 2021 Elantra release
in early March, which raked in nearly 800,000 combined views during its launch. Where there’s a will there’s a way!
The Quest for Deals
If there’s one thing that’s certain, consumers love a good deal - pandemic or not. With financial instability and uncertainty at an all-time high, car manufacturers and dealerships are offering major deals across their inventory and relief in the form of payment plans. While payment programs are now in place to offer reassurance for customers facing recent job losses, there has also been an influx of coronavirus car deals
to convince consumers that now is a great time to buy a vehicle thanks to options such as long-term, low-rate financing and deferred payments for up to six months.
According to James Houston, Managing Director of Consumer Lending and Automotive Finance at J.D. Power, "These types of programs have been tools OEMs have used many times over in economic downturns and for inventory control. History shows us that automotive sales recover over time, and there will be less need to rely on these types of programs." While these programs won’t last forever and we don’t know with certainty when we’ll see the light at the end of the tunnel, they’ve become the “new normal” to confront declines in sales and financial difficulties among prospective buyers.
People aren’t all rushing out at once to buy a new car, but car buyers are turning to digital in order to research and compare the best deals and car models available - and search interest
for “is it a good time to buy a car” grew more than 9X between January and February of 2020 and March and April of 2020.
The Future of Auto
Data shows that consumers are increasingly getting smarter about the way they shop - and they have access to tons of information at their fingertips thanks to their digital devices. In 2020, consumers make sure to take their time to conduct thorough research prior to contacting a dealership. Ten years ago, it was normal to cross-shop an average of around four dealerships, but today that number has been halved thanks to increased access to data and online resources. Now, auto consumers are requesting speed when it comes to completing their purchase.
There’s no doubt that coronavirus or not, online car-buying alternatives and sources of information are here to stay.
Despite dismal numbers and downward sales projections in recent months, some auto professionals predict that the public may see new needs
for purchasing a car. For instance, George Karolis, president of car dealership investment bank The Presidio, has pointed out, “Will folks be comfortable being in a vehicle that they don’t know who was in before? There could be a tremendous focus on personal vehicles.”
Additionally, Anthony Pordon of the Penske Automotive Group
has stated, “The recovery will take a while. We see consumers adapting to changes and being more cautious.” He has also mentioned that ride- and car-sharing services might lose their popularity post-Covid, which “could bode well for auto retailing” if previous Uber and Lyft customers choose to purchase personal vehicles for safety reasons.
Takeaway
By now, you’re likely all too familiar with the phrase “unprecedented times.” While it may seem cliche, it rings true - and the impact of recent events is without a doubt being felt heavily in the automotive industry. While there is no exact formula or timeline for what the industry will look like moving forward or when it will recover, some things are certain: prospective auto-shoppers are turning to digital methods for their car-buying information, safety, and convenience. Secondly, auto dealerships will need to stay up to date with these insights and preferences to meet consumer demands.
Ultimately, the automotive industry has made it through past recessions, and it can make it through the next one - as long as it continues to adapt.
Interested in learning more about reaching consumers through their preferred digital platforms? Contact us
or choose a location
near you to find out how you can get started and grow your business.
One noteworthy insight gleaned from recent data is the remarkable tendency of US Hispanics to kickstart product searches on TikTok, more than double compared to their non-Hispanic counterparts. This shows the growing influence of social media platforms, particularly TikTok, in shaping the preferences and purchasing decisions of the Hispanic community.
With contested races, growing voter unpredictability, and the possibility of a presidential rematch looming large, every demographic group will wield significant influence. Among them, Latinos stand out as the fastest-growing and youngest electorate, poised to play a pivotal role in shaping the outcome of key battleground states.
Ever since the tail end of last year, my inbox has been flooded with emails prophesying the imminent trends in digital marketing, advertising, SEO, AI, and the like for 2024. I'm talking about more than 50 emails, and it got me thinking – why not save you some precious time and put it all into an easily digestible summary, highlighting the most important insights?
As the person responsible for the success of your business, you're not just moving toward objectives; you're navigating within a broader context. Recognizing and embracing the influence of Hispanic culture isn't just a choice; it's strategically important.
Hispanics in the US have embraced podcasts with enthusiasm, contributing to the medium's growth and diversification. Recent data reveals fascinating insights into their podcast listening habits.
Get 2024 Branded Content Ideas for your Hispanic Marketing Strategy:
1. Resolutions for Good: A Fresh Start for 2024
2. Valentine’s Day: Celebrate Love the Hispanic Way
3. President’s Day: Driving Deals and Family Time
4. Lent Traditions: Faith, Food, and Family
As the largest minority market in the country, reaching the Hispanic market is key to unlocking business opportunities no matter which industry you’re in. Keep reading to learn how to reach the Hispanic market in 2024 and discover best practices for tapping into this influential audience!
Find some significant facts and figures to help you broaden your understanding of this important segment of the market that your brand needs to take into consideration if you want to expand your reach.
Social media is not just a platform for connection; it's a thriving cultural hub that bridges gaps, influences opinions, and empowers communities.
When it comes to the United States’ Hispanic community, the numbers and trends in social media use are fascinating. In this post we'll explore the data that sheds light on how Hispanics are making their mark in the digital realm.
In the rich tapestry of American dining, one market segment stands out with its unique flavors, deep-rooted traditions, and a youthful enthusiasm for exploring culinary experiences. We're talking about the US Hispanic dining consumer – a dynamic and influential group that holds the key to a thriving restaurant industry. With youth, repeat visits, and cultural ties as its defining characteristics, engaging this demographic is a strategic move that can take your restaurant to new heights.
