Online Buying Trends To Increase
Hey, Mr Car Dealer! Have you noticed a decrease in ups in your showroom lately? We all know that there has been a decline in car sales over the past year or so. Consumers, tightening their belts because of the increase in gas prices and the threats of a recession, are thinking twice about buying a car. And if they are looking for a car, they’re probably doing a lot of research online before they ever enter a showroom.
According to this article on Automotive News, the internet allows dealers access to a larger audience of buyers in cyberspace but also gives those buyers a dearth of information they didn’t have before the internet came along. Having this information leaves very little room for the profits when the buyer can know not only what the dealer paid for a car but also information about rebates, holdbacks and dealer cash. Does this mean that the salesman’s days are numbered? Not likely. But salesman will need to be armed with more knowledge about their product.
The information revolution may be bad for dealers, but it’s good for customers, says Phillip Reed of edmunds.com
And, according to this article, the day of a paperless auto sale may be getting closer. The ability to complete contracts and documents online could mean less time in showrooms for consumers. AutoNation, Inc is releasing AutoNation Direct, an internet-based sales channel. This product will allow buyers the choice to order and finance a vehicle online and take delivery at home, or only go to the dealership to review, sign paperwork and pick up their new vehicle.
An increase between 5 to 40 percent in e-contracting in the next 24 to 36 months is likely, according to Christopher Morris, director of F&I services for Reynolds and Reynolds Co., a company selling software, services and forms to dealerships. This time line could be much longer for dealers in states who have not switched to electronic vehicle titles.
However, not all consumers are ready for the total online buying experience. A lot of people still prefer to talk to a human being, walk around the car. Touch it. Get behind the wheel. In the meantime, dealerships are going to have to face the fact that, as technology advances and consumers grow more comfortable with online purchases, showroom sales may decrease. The only way compensate is to increase make sure the dealership has the resources to compete in the growing reality of online sales.
February 6th, 2008 at 10:49 am
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Susan Kishner
February 6th, 2008 at 11:52 am
Thanks for the vote of confidence. It’s nice to hear someone praise our work.
February 9th, 2008 at 7:45 am
Yes, the days of a car dealer’s website being not much more than a billboard is drawing to a close… here’s us, picture of car, call, email or come on in = billboard.
Although I call that proposing marriage on the first date.
But the recent Automotive News coverage missed several important aspects to Buy Direct and quoted many dealers with personal feelings on the topic as if they were facts.
My company (Ai-Dealer) has been providing a Shopping Cart ecommerce system for car dealers to add on to their website since well before AutoNation and Lithia (at L2) got in to the game.
The biggest oversight of the Automotive News coverage was the lack of coverage as to why dealers would add purchase ecommerce capabilities to their websites… it is what consumers want. When you give it to them (still within a structured albeit online sales process) they buy.
And done properly, they identify themselves to you more often than they would have if you don’t have the capability. And by showing them that they can trust you, they really do engage to your follow up and buy…
And why does everyone think that it is either ecommerce or showroom? It is both… ecommerce just opens up a new sales channel as part of the greater online-offline process.
As for those personal opinions about how some may like it to be (cars can only be sold in the showroom)… this is already happening by your competitors.
http://www.imakenews.com/digital1/e_article001009372.cfm
Then one last point as a nod to the blog providers… the dealer’s using Ai-Dealer’s shopping cart ecommerce product are devising whole new advertising messages, campaigns and placements around their “The ONLY complete online shopping experience for ”
It is my experience with car dealers that they don’t hate the Internet, it is just that as a sales medium, the funnel has been too wide at the top and too narrow at the bottom. Lots of hype and activity, clicks, eyeballs and leads… lots of effort, lots of expensive new technology… few sales.