What Do Online Car-Buyers Want From You?

CapGemini just released the annual update to its study of in-market, car-buying consumer attitudes and preferences.  

While all major trends continued to increase from the 2007 report, what got me thinking was something my father told me a long time ago:

"If you want to be successful in business, you need to anticipate where your market is going and get there first."

So things are difficult in retail automotive right now.  They are.  So what?  It is still your responsibility to survive and thrive (or if you believe in it, to get this message in front of those in your organization who are responsible for the company's competitiveness and profitability). 

About the only thing I've heard where a car dealer and manufacturer can still raise sales results is with applied execution on the Internet.  As you read the CapGemini findings, reflect on where your dealership is on the technology adoption life cycle (see image below).  Reflect on where you should be.

Now here are the key findings of the report:

• The number one change consumers in all markets anticipate is the widespread adoption of online vehicle buying.
• 44% of consumers said they were likely or very likely to purchase a car entirely over the Internet if that capability were available, up from 20% last year [in 2007].
• The barriers to online vehicle buying seem to be addressable.  We expected respondents to voice concern about the inability to interact face to face or negotiate a trade-in over the Internet, but instead, they cited the inability to test drive a vehicle (43%) and the lack of full price and product information (36%) as more significant blockers.
• More than three quarters of respondents said that [websites] having the features that matter to them would make them more likely to purchase a vehicle from that company.  Conversely, more than half said that if the features they care about are not available they would be less likely to buy from that company.
• online buying is viewed as the leading change consumers expect to see in the vehicle buying process over the coming decade
• It's too early to tell whether consumers' expressed desire to buy cars over the Internet translates into their actual behavior.  Nevertheless, this trend represents potentially hundreds of thousands of vehicles and points to the importance of implementing a fully integrated multichannel strategy.

And now it is my turn.  CapGemini conducted the study as if "Shop and Buy Online" was still hypothetical.  It is not hypothetical.  Ai-Dealer may be the only company providing it, and our service is currently only available in North America, but there are some critical findings we can share as it pertains to the effective implementation of it, as follows:

• While consumer behavior catches up to the expressed desire, don't focus on Buy Online. 
• Buy Online is just a natural extension of Shop Online. 
• Use Shop Online to attract online, in-market consumers to your dealership or if you are an OEM, to attract them to your brand.
• Nearly every consumer will use and value Shop Online in their vehicle shopping process. 
• Use Shop Online to get consumers to engage and tell you who they are.
• Use the guided step-by-step workflow explanations inherent in the shopping for a car process to build trust.
• Wrap your follow up processes and technology around the brand message of a better online shopping experience because despite what you may be experiencing with Internet leads, consumers do want to and need to speak to you... but not before they are ready.
• Trying to make them speak to you (or come in to the dealership) before they are ready creates an enormous amount of friction in the online shopping experience. 
• Adding a self-serve ecommerce shopping cart for vehicle and F+I allows online consumers to get comfortable with you and your dealership, then as the CapGemini report found, the great majority of consumers preference those organizations who gave them what they wanted at the expense of those who did not.
• Ai-Dealer's dealer customers will back up this finding.  Put into dealer language:  "These are the most engaged, serious, late in the sales funnel customers we have.  They take our phone calls, respond to our emails and come in to our showroom.  They are at the point in their shopping that they need and want our help... and they buy... and if we do our jobs and have the car they want, they buy from us because they don't get what we are giving them anywhere else."

I don't have a crystal ball.  I don't have perfect knowledge of what the future holds for retail automobile distribution.

I do know that almost every other consumer industry on the planet has embraced and adopted real ecommerce.  Sometimes through pure-play ecommerce companies like Amazon.  Sometimes the "Brick and Mortar" retailers embrace it and become "Click and Mortar" retailers.  In automotive retail, I do think it will be the "Click and Mortar" model that will win.  Car dealers are not only a very organized and politically powerful group (the single biggest payers of sales taxes in the country), but because the roles they play in arranging financing, helping consumers dispose of their trade-ins and providing warranty and aftermarket service are critical to the needs of the market and will never go away.

So that being said, it won't be all of them.  Over the past decade, the Internet has changed much about automobile sales.  The impact of real ecommerce as part of a digital marketing strategy is just beginning to be felt.  Evolution is not kind to those who are the least adaptive to change.

So as you reflect one last time on the CapGemini study and this newsletter, ask yourself again... "Where do I want to be on the technology adoption lifecycle?"

If you would like to make a comment or provide feedback on this information, please do so in our forum.

Also our good friend, Jeff Kershner over at DealerRefresh has also begun a discussion on his blog on this topic.  Please feel free to contribute there too.