With car shoppers more willing to buy online, auto marketers must bridge the divide

Kyle Keogh, Steven Rampersad / November 2020
A stylized illustration of a woman shopping on a laptop while sitting cross-legged in front of a larger-than-life laptop with a screen that appears to be a brick-and-mortar storefront.

In our recent study 6% of the U.K car buyers indicated they made their purchase online. This might not seem like much in a world where consumers buy everything else online from big-screen TVs to mattresses, but this number is up +75% since 2018.1

The fact is, up until recently, while Brits did a lot of research online prior to buying a vehicle, the purchase was typically conducted at a car dealer. But then COVID-19 hit, causing thousands of dealerships to close their showrooms and forcing an automotive digital transformation in which even the final deal is sealed online.

Then COVID-19 hit, causing thousands of dealerships to close their showrooms and forcing an automotive digital transformation in which even the final deal is sealed online.

If other industries serve as a guide, this is more than a passing trend. People will likely continue to buy cars online even now that showrooms are reopening. But to take full advantage of this new opportunity — especially at a time when more people are interested in buying cars — auto marketers must deliver a frictionless online retail experience.

COVID-19’s effect on car-buying trends

Car shoppers are no strangers to online research. Even with COVID-19 temporarily shutting down businesses and leading to massive unemployment, people were still looking to buy rather than simply to browse. Searches for “car sales” have grown globally by over 60% year over year, and searches for “best car under” have grown globally by over 80% year over year.2

With car shoppers more willing to buy online, auto marketers must bridge the divide

There is also a behavioral impact of COVID-19. In our latest research, 9 of 10 new car buyers highlighted they do their research online. However, as distancing measures continue, 63% of new car buyers said they would look for even more information online. 59% of car buyers also indicated they would negotiate more to get a better price, setting further price pressure. Where, over half of the car buyers would avoid dealer visits and consider purchasing their car online.3

Beyond research into pricing and availability, buyers are comfortable with moving other aspects of their purchase journey online too. For example, 53% say they are comfortable experiencing the vehicle (feature highlights, walkarounds) completely online or with a mix of online and offline.4

However, when shoppers are planning to visit a dealership they want the answers to their questions in advance, so they can make the most of their time. When asked why they reach out to dealers in advance:

  • 50% wanted to answer questions about models or features.
  • 46% wanted to answer questions about pricing or financing.
  • 43% wanted to book a test drive.5

Bringing the dealership experience home

The showroom floor will still play an important role, but people are looking to get more done online or at home before arriving in-person. Because they now do so much research online they enter the dealerships much more prepared. This resulted in the average car shopper only typically making 1.4 dealership visits before buying,6 this is down 36% compared to 2015.7 Most of that time is spent filling out paperwork and dealing with financing. That provides an opportunity for auto marketers. Over 50% of those who are planning to buy a car in the next 12 months would prefer to sign all documents electronically, which can be done from home.8 Additionally, 61% of auto shoppers say they are comfortable negotiating purchase, lease, or financing terms completely online or through a mix of online and offline.9

Sixty-two percent of purchasers said they would consider ordering their future car online.

Due to the COVID-19 crisis new car buyers also have new expectations of the purchase experience that the dealerships and manufacturers offer. They expect these purchase experiences to be digital. Providing the option to have video meetings with sales people (37%), visit the showrooms virtually (35%) and provide online purchase options (32%) would help meet these expectations.

It also appears that transparency is key when it comes to an online car purchase; delivery, vehicle options and financing must be clearly laid out. Sixty-two percent of purchasers said they would consider ordering their future car online and have it delivered to their home.10

With car shoppers more willing to buy online, auto marketers must bridge the divide

When dealers offer people the ability to complete some tasks online — or directly at a car buyer’s home — it helps increase overall satisfaction with the process while reducing time spent at the lot. In our latest research, 35% of shoppers expect dealers and manufacturers to offer at-home test drives with vehicle delivery due to the global crisis.11

Getting the most out of an integrated model

Removing silos and consolidating data will enable auto manufacturers and dealers to see consumers through the same lens. Auto marketers should embrace more integrated marketing between OEM and dealers and rethink four key areas:

  • Integrate systems for inventory development, payments, management, distribution, and marketing.
  • Help shoppers engage and shop for vehicles digitally.
  • Create alignment, so that people can easily move between manufacturer and dealer sites when shopping, searching for inventory, pricing out vehicles, and closing the deal.
  • Align on measurement solutions that are tied to the bottom line and setting up systems to prioritise and track these new KPIs.

For the auto industry, driving digital transformation means delivering a blended retail model that combines online strategies and traditional dealership-based interactions. Dealerships will still play a key role in car shopping, but an increasing number of people will want more of the process — from research to purchase to delivery — available online. Focusing on solutions that play off the strength of the local dealer and the scale of manufacturers isn’t just good business — it’s the future of the business.

Search insights from Google Trends: 4 behavioural shifts that have changed retail