Customer experience technology is rapidly changing the way the automotive industry markets cars and the way customers shop for them. Just a decade ago, the idea of buying a car without seeing it in person was highly unusual and yet today, over half of UK car buyers purchase a car without seeing it in person first. So with large numbers of customers now relying solely on the internet to purchase vehicles, it comes as no surprise that predictions state 50% of all dealerships will have closed by 2025. But how exactly are customer behaviours changing and what can car dealerships do to not only survive but to increase in-store footfall and boost sales?
Challenge 1: The role of the dealership has changed
Dealerships used to be the go-to place for customer research. But the days of spending a Sunday afternoon visiting 5 different showrooms to compare makes and models is long gone. By the time today’s prospective buyers have stepped foot in a dealership (providing they don’t buy online) they’ve already done their research and know what they want to buy. According to Google, 95% of vehicle buyers use digital as a source of information and it takes 65% of buyers just 3 weeks to research online using sites like YouTube to find out more about features, options and reviews.
Challenge 2: Millennials have a negative perception of dealerships which makes them more likely to purchase online
Unfortunately, car dealerships generally have a pretty bad rep with millennials. In a recent survey, 56% of millennials said they felt uneasy with the prospect of negotiating while 62% of women said they felt pressured into making a purchase straight away and 46% said they felt tricked into buying features they didn’t need. So to avoid what they expect will be a negative experience, they turn to sites such as CarWow to browse and compare makes, models and dealership prices.
Challenge 3: Technology is giving customers the confidence to buy before they try
Today, buyers don’t feel the need to sit in a car or take it for a test drive before they make a purchase. Virtual-test drives and 360-degree digital views of the interior and exterior are enough to convince 56% of new car buyers to make a purchase without having to see the vehicle in the flesh. This comes as customers build trust with large car manufacturers, automotive reviewers and reputable online portals.
So where do these changing buying habits leave traditional dealerships?
The majority of UK automotive executives are convinced that the only means for dealers to survive is by restructuring into a service factory or a used car hub in the future, but some forward-thinking dealerships have already proved that’s not necessarily the only way forward.
Provide an unforgettable experience the customer can’t get anywhere else
Some car dealerships have already recognised the opportunity to tap into buyer emotions like never before. Arguably customers who chose to purchase a car online miss out on the emotion of buying something in the flesh and this is where car dealerships can really step up to the plate.
Audi have invested in creating a completely unique buying experience for its customers. In some European dealerships, Audi are giving their prospective buyers the chance to experience virtual reality to configure their dream car. Using a VR headset, customers can explore even the smallest details from an extremely realistic perspective, selecting from several hundred million possible models and equipment variants. The VR application allows users to become completely immersed in the virtual world, conveying an all-encompassing, detailed image prior to the purchase decision. Audi has also catered to the needs of their tech-savvy audience who can experience X-ray vision to look beneath the surface of the car and into the structure of the technical components. And racing enthusiasts are also in for a treat as they have the chance to immerse themselves in the atmosphere of the Le Mans 24-hour race, experiencing everything from pit stops to cheering crowds. But if you think this just sounds a bit gimmicky, think again. In a recent survey, 80% of future purchasing generations said they’re more likely to visit a showroom that offers interactive experiences, so it looks as though Audi have definitely made a pretty smart move.
If dealership experiences like this are marketed correctly, it’s likely to encourage prospective buyers to consider dealership visits a key part of their research process, handing the power back to dealerships to help persuade customers why their brand is most suited to the customer’s needs.
Reach the right customer at the right time with the right offer
If 95% of customer research starts online, then that’s where you’ve got to be. Hit the right buyers with the right message and they’ll come to you. Unfortunately however, many automotive retailers are still churning out marketing material without really knowing their consumers. Not only does this get incredibly expensive, but there’s no guarantee the time and value being invested is actually reaching buyers who are in the market and ready to purchase. But by using data analytics, dealerships can target their communications and engage in the right conversations with consumers at exactly the right time—essentially leveraging insights to guide dealers toward the best in-market opportunities.
Consumers each have their own individual preferences and will make a purchase decision when it’s important to them. Data analytics can provide dealerships with valuable information about consumer purchase patterns, and what has triggered their buying decision for a vehicle and for service operations in the past.
Car dealerships are certainly not down and out. The biggest change is that buyers are visiting fewer showrooms as they turn to online research and chose just one showroom to visit as a last confirmation, they’re making the right choice for them. Dealerships that invest in highly targeted marketing and incredibly immersive experiences may be able to flip the way buyers shop for cars, increasing footfall though the dealership once again.
To find out how TrustFord is driving a digitally-led customer experience, check out the interview here.