Digital retail is something that is being extensively used by consumers and vendors across a wide range of different industries. One sector that is starting to realize the potential of ecommerce in its own market is car dealers.
The online sector of car dealers is relatively small compared to traditional dealerships but it is starting to grow. Predictions are that from now on, more car dealers will see the benefit of using digital tools to increase car sales and that the showroom itself will become somewhat less significant.
As ecommerce in general grows, the physical retail units are becoming less important. While most people still want to view a car in person, it is possible that soon a car dealer’s website may become the focal point for consumers, and the showroom secondary.
Do automotive dealers sell cars online?
One report from Statista claims that car sales were expected to drop in 2021. Sales in 2020 were already on a slide due to the pandemic, but there was actually an increase the year later.
Facts and figures seem to change from one statistical site to another but one thing isn’t in doubt, the automotive industry is worth trillions of dollars. When it comes to the digital retail sector, the picture is somewhat different.
According to some reports, the digital part of the car dealer industry was worth over $14 billion in 2021. The projected growth will see this expand – if correct – to around $140 billion by 2027.
Clearly then, there is great promise in the ecommerce part of selling cars. And also clearly, many dealers are getting involved.
How are car dealers using digital retail?
Digital car dealers operate slightly differently from some other online retailers. For instance, a clothing vendor can use a website to display their garments, and then the consumer can simply add some to their basket and checkout.
An automotive digital retailer cannot operate in this way. Setting up a website with photos of cars, and expecting consumers to simply make a purchase is not going to work.
Anyone in the digital automotive retail business needs to use their online presence in a very different way. This type of car dealership requires the integration of a number of tools, clever use of marketing, and a combination of sales tactics and technology.
What are the advantages for the consumer?
Not everyone likes to visit retail units to make purchases. Online shopping has grown massively over the last few years and is extending into more unusual areas now. Allowing someone to buy a car online removes the need for a visit to a showroom, and allows easy access to a larger selection through the net.
However, one thing shouldn’t change, and that is customer satisfaction. Operators such as Visitor Chat provide tools for car dealers to keep communication lines open with customers even when online.
The consumer gets the advantages the net normally gives, such as 24/7 shopping. But, through tools such as live chat, they can retain the hands-on approach a car dealer would normally provide.
There is obviously no need to visit a showroom, but questions can still be asked and answered through the chat portal.
Other benefits to the consumer can include the following:
Schedule appointments online
Depending on what features a car dealer adds to their website, and how they integrate different tools, there can be many advantages to both the dealer and the customer.
One thing that can be done is to make appointments. This may sound simple, but through live chat, the customer can already explain what they want, what their budget is, and give more information. The dealer therefore can make the appointment more productive because they are fully prepared.
View payment options
Pricing on the dealer’s website should be transparent. And there is also the option here for giving different payment methods and options. For instance, credit could be arranged on the site.
Customize a vehicle
The website could give options not to just make a purchase, but to choose the color, and add other features to the vehicle.
Get an offer for a trade-in vehicle
The website could give estimates or offers for trade-ins. By using tools that allow the customer to input details about their vehicle, the platform could return an offer to help convince the customer to carry on with their purchase.
Does digital automotive retailing help the dealer?
According to McKinsey, dealership operating profits dropped from 8.9% to 1.7% between 2015 and 2018. Traditional retail units are becoming less profitable than online rivals
Dealers need to find ways to increase profits and stay solvent. Digital automotive retail could provide the answer. If the process is quicker, simpler, and more convenient for the consumer, then sales could be increased.
The problem with selling cars online is always going to be a matter of trust. Purchasing a vehicle is a large expense, and may involve taking out a line of credit. Therefore, there needs to be a level of trust in the experience. Good online security can add to this, but so can live chat. Having someone available to guide the consumer through the sale can equal the experience someone would have in a showroom but retain the convenience of online retail.
Is the future of automotive retailing online?
Not too long ago, Nissan invested in a next-generation showroom so it is too early to say that all cars will be sold online in the future.
Nevertheless, the combination of human interaction with the speed of online retail is giving many car dealers hope for the future. If the tools available are used correctly then consumers may be heading to the web instead of the showroom more and more.
Many experts believe that the showroom will end up as the place where cars are delivered from, or picked up, rather than where they are sold. All of the sales processes will be done online.
Summary
There is no doubt many people like to see their purchases before making them. Thus, it may be desirable to view the new all-electric Taycan Cross Turismo at a dealership. Yet, many people prefer to make their purchases through the net.
Whether all car dealers will embrace digital retail remains to be seen, but certainly, this sector offers a lot of promise if the tools available are used correctly.
