Automotive has traditionally been a predominantly “in-person” orientated industry. In fact, you could go as far as saying that it relies on it. Automotive retail has built a transactional funnel as effective as a Venus fly trap around the vehicle buyer’s purchase path. There’s only one problem – consumers feel exactly that; coerced, manipulated, and ultimately, trapped. And they’re beginning to reject it too.
Today’s consumer is, after all, a connected one. They watch, absorb, and interact with media and content via a constantly growing stream of digital channels. Consumers have access to unprecedented levels of information in the form of reviews, social campaigns, and advice from influencers and independent experts. The decades-old sales techniques that have gone mostly unchallenged are now under scrutiny or being avoided altogether.
In the era of Amazon Prime, ecommerce is the norm. Everything from custom kitchens to complex electronics can be (and are) purchased online. At first, simple convenience (admittedly along with low pricing) drove the growth and uptake of ecommerce in other industries. But very quickly, a straightforward buying journey, 24/7 availability, and being in full control of how, what, and when purchases could be made, massively broadened the appeal to consumers.
Those attractive concepts have now become entrenched in the minds of consumers. It is the buying journey they now expect everywhere. But automotive retail continues to cling to an outdated and in many aspects, alien purchase path that fewer and fewer consumers recognise or accept.
70% of consumers would consider buying a vehicle online if that option was made available to them*. That’s grown from just 20% in 2017†.
So, there’s a marked and continued growth in the willingness to buy vehicles online, making the automotive customer journey an ecommerce one whether retailers like it or not. The new ecommerce trends and principles we’ve identified are likely here to stay, and need to be adopted by automotive retailers looking to safeguard their future.
But what about the “ace in the hole” that dealers claim is essential to vehicle purchases and can only be done in person – the test drive? In a report published by Trust Pilot:
87%‡ of consumers considered a test drive necessary before buying a car.
But, maybe we need to consider if even the traditional test drive needs to be an “in-person” aspect of the buying journey.
We should probably say now, that we’re not looking to court controversy. We recognise ecommerce as a complimentary sales channel to a retailer’s existing business model – not a replacement to it. Ecommerce gives consumers from outside of a retailer’s area of interest and geographical reach access to their business from anywhere. It’s for those consumers, (and the growing number of online vehicle buyers who’ll follow in their footsteps) that having every aspect of the buying journey available online is vital.
Being comfortable with how a product looks and feels is an important factor in making a purchase decision.
But, when entire homes can be designed and decorated digitally via apps, (not only convenient and great for visualisation, but a serious tool in encouraging online sales), is it time to reconsider the necessity of the “in-person” test drive?
Most dealers recognise the benefit of video marketing. From individual walkarounds, to responding to a new lead in person, video can help retailers make a personal connection via digital channels. Is it far-fetched to think a well-presented video test drive, or making one available on request, could facilitate more sales from those committed to buying online?
The simple answer is no. But, also, it’s in a retailer’s best interest to avoid “in-person” selling when it comes to ecommerce. This is because most customers buying online would be considered a “distance sale”. Consumers making purchases through our NetDirector® Auto-e platform live, on average, 76 miles from their dealer of choice. And distances in the hundreds of miles are not uncommon.
For these consumers, a test drive is neither convenient nor necessary. As the report from Trust Pilot mentions, trust is quickly becoming a major factor in automotive retail as the customer-retailer dynamic shifts online. And, importantly, the right ecommerce platform can generate natural trust. Transparency is the key.
When you think of the ecommerce platforms you’re used to using, such as Amazon, Wayfair, Harry’s, Uber, or even Netflix. The one thing you can’t accuse them of is being complicated. Browse, click, buy – that’s pretty much it. And whereas additional items in the form of recommendations (other buyers also bought/we just added a…etc.), are present, they are presented in a no-pressure environment that ironically makes it more likely for the consumer to them.
Choice and simplicity are two of the essential aspects of ecommerce that help build trust. The third is simple in itself too – they provide what the consumer expects. As long as they deliver the product or service in an acceptable timeframe, it’s hard to disappoint.
Oh, and there’s one more thing automotive retailers may want to consider when it comes to the benefits of ecommerce…remember when you last haggled on the price of an item on Amazon? Didn’t think so. When consumers trust the buying journey, they have less reason (and opportunity) to question the price – call it an acceptable trade-off for convenience.
Ecommerce is driving what will be a permanent change in automotive, one that will see our industry become more service and digitally orientated as a result. GForces is a leader in this next-generation technology, and we’re extremely passionate about leading the charge, and change, that will benefit retailers across the industry.
*Google, Drive to Decide – 2018 Gearshift Study
†Centre for Economics and Business Research, May 2017
‡How digitalisation will transform the auto retail industry