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Is the Auto Dealership Dead?

For years, the car-buying process has been a frustrating but unavoidable chore for many shoppers. The internet brought wider availability of pricing information and model specs to consumers. Easier access to information transformed the shopping experience and forced dealers to focus more on service and customer experience to be competitive.

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Now, with the growth of artificial intelligence (AI) and bot technology, the car-buying experience has evolved even further. More than ever, consumers can handle nearly every step of the car-buying process online. As many as 54% of people say they would prefer to buy a car completely online, without having to leave their home. To survive, car dealerships are investing heavily in technologies to bolster the online visitor experience.

As more of the process moves online, consumers and dealers alike are starting to wonder: Is the car dealership headed for extinction?

Is Online Car Shopping Is Making Dealerships Obsolete?

Shoppers hoping to avoid going into a dealership to negotiate a purchase are looking for different ways to approach the process. The old buying process does not meet the needs of today’s consumer. The current iteration of the car dealership is dying. While consumers previously visited an average of seven car dealers before a purchase, car buyers now average 1.6 dealership visits. Traditional in-person negotiations are going out of style, and consumers are demanding flexibility around when and how they initiate and negotiate automotive purchases. Shoppers want to approach dealers on their terms, and those dealerships that can’t adapt won’t survive.

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The car dealership is not dead, but it needs to change with the demands of today’s consumers to avoid extinction. Dealerships that are flourishing are embracing technologies like artificial intelligence (AI) and BOTs to create an online customer experience that will build customer loyalty. AI and chatBOTs allow dealers to engage with customers 24/7 online. BOTs can provide customers with quick answers to FAQs, direct them to specs on specific models, help fill out paperwork, qualify the customer, and pass them off to a live agent at just the right time.

Live agents can chat with customers, use video chat to show off the details of a specific car, or co-browse with the customer to find more information on the website. Live agents can assist buyers with paperwork and help facilitate nearly every detail of a car purchase at the buyer’s convenience. This kind of service on demand can help build brand loyalty. A consumer who is comfortable through the whole buying experience and served on the terms they demand is going to be extremely satisfied.

Are Dealerships Still Necessary?

Online car shopping has changed the dealership experience forever, and consumers have gained control of what can be a painful process. But there are still some services that can’t be handled via an online presence. Dealerships will survive, but in a different form.

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While 42 percent of consumers say they don’t need to test drive a car before buying, most customers still prefer to try out the car before they buy. Conducting research online enables buyers to narrow down their choices, which might result in fewer test drives and more time saved. There is no way to duplicate the test drive experience online, at least for now, so many customers will still visit a dealer to take a vehicle out for a spin.

The other factor that will keep the modern dealership alive is service. Car buyers will still need to bring their cars into the dealer for service, though that process can be streamlined with a strong online presence, too. BOTs can provide service reminders or schedule service appointments. Dealerships can provide high-end service to customers by using video chat and co-browsing to diagnose problems remotely, saving customers valuable time.

Car Dealerships Aren’t Headed for Extinction – They’re Evolving

The automotive industry is in the middle of a radical change as 54 percent of car buyers would pay more for a better experience, and those car dealers willing to provide that experience will have a distinct edge over the competition. Dealerships that embrace new technologies to create a strong, easy-to-navigate online presence serving consumers on their own terms will come out on top. AI and BOT technology can provide the 24/7 access that customers demand, and that combined with a text, voice, video based live conversational experience with online human agents can provide the personalized service that will keep car buyers coming back.

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