If you operate in any part of retail these days, you know Amazon has changed the game forever. Consumers have come to expect one-click shopping, access to products through any connected device and a digital experience that serves up recommendations just for them.
The “Amazon Effect,” as it has come to be known, is reshaping consumer preferences across all industries, and automotive is no different. Today’s car buyer wants a faster, simpler and more personalized shopping experience delivered through digital channels. Car buyers are in-market for a total of four fewer days than they were just two years ago, and they spend almost two-thirds of their total shopping and buying time online, according to our 2018 Car Buyer Journey Study.
As a dealer, you can bemoan the “Amazon Effect” and how it’s wrecked the retail model. Or, you can learn from Amazon and use digital retailing to drive better results. This doesn’t mean there isn’t a place for physical dealerships. Rather, the key to succeeding is a comprehensive approach to retail that includes both your digital and physical storefronts.
Here is what I mean. While 83 percent of car buyers want to do one or more steps of the purchase process online, even more (89 percent) want to sign the final paperwork at the dealership, based on our 2018 Future of Digital Retail Study. Instead of replacing the showroom, a good digital retailing solution should seamlessly connect the online to in-store experience for a more efficient, engaging car-buying process.
Addressing the Pain Points for Consumers
Let’s take a look at car buying from the consumer’s perspective. Car buyers today are tired of pricing surprises and tired of wasting time. More than half of car buyers look for monthly payment information while researching a vehicle, and less than half are satisfied with the more than three hours spent at the dealership during the typical purchase process.
To address these pain points, dealers should take advantage of digital retailing to make the complex process of buying a car as simple as possible. This requires tighter integration between digital and physical showrooms, so the work consumers do online in advance can carry over to the showroom floor. Effective digital retailing tools bridge the gap to offer that seamless experience.
Digital retailing also helps dealers personalize the shopping experience for consumers by remembering their selections and preferences, whether online or in-store. This solves for the “I want it on my terms” consumer culture created by Amazon, which allows people to shop when it’s convenient for them, whether at home on their laptop or a coffee shop with their mobile phone. Digital retailing gives car buyers a feeling of transparency by providing accurate and consistent information throughout the entire process.
Delivering Ready-to-Buy Consumers to the Showroom
In turn, digital retailing has tremendous benefits for the dealership. Car shoppers are less likely to negotiate and arrive at the dealership closer to a purchase decision because they have thoroughly researched pricing and options. Dealers build credibility and trust because the online and in-store showrooms are in sync and can offer that differentiated cutting-edge experience that other dealers down the street may not have, helping drive higher close rates and gross profits compared to traditional online leads. The purchase process is faster because the car buyer can complete some steps in advance.
Digital retailing also personalizes the journey for each car buyer, raising customer satisfaction and opening opportunities for repeat business. This personalization, driven by technology, shouldn’t end at the sale. Half of car buyers said they would be more likely to service their vehicle at a dealership that offered “online scheduling for service” and “online cost estimates.”
Focusing on What Matters Most
Even with this increased use of technology, though, the in-person experience remains core to the car-buying journey. There’s no substitute for seeing, feeling and driving a car. In fact, eight out of 10 consumers would never purchase a car without a test drive.
But the message is clear. Thanks to the likes of Amazon, consumers know what’s possible. They want to use technology to speed up what has become a long, slow grind to the purchase of a car. A digital retailing strategy that integrates the online and in-store experience offers a faster path to the best part of the purchase — getting car buyers out of the showroom and onto the road in their next car. Mike Barrington