Time is the New Currency in the Vehicle Purchase Process
By Ted Ings, Executive Director
We live in exciting times when new, more powerful digital tools are becoming readily available and the markets are shifting towards higher efficiency and time-saving practices.
This applies to the field of retail too, necessitating thorough changes to the entire process, from setting the initial price to closing the deal and shipping the product.
While I am all for preserving good traditions, it would be ignorant to continue selling cars exclusively on premises, as the competition is working around the clock to conquer the virtual marketplace and will leave you in the dust if you refuse to evolve. Look no further than Carvana, Roadster and Amazon.
That’s why you would be wise to dedicate a few minutes and allow me to introduce you to the basic tenets of omnichannel retail for the retail auto industry:
What is omnichannel retail?
This may be a fancy-sounding term, but don’t let the linguistics confuse you. In a nutshell, omnichannel retail means working with your customers through as many platforms as possible. In practice, car dealerships need to establish an online presence and provide customers with mobile access to their full offering, as well as a way to ask questions. Around 42% of buyers in 2015 used multiple digital devices to search for an appropriate vehicle, and this number is expected to soar above 80% by the year 2020.
Online payment methods like PayPal are also commonly accepted, facilitating instant remote sales, with cryptocurrencies looming on the horizon as the next step. This trend is not unique to the automotive industry and is a part of the wider switch to e-commerce that is revolutionizing business in many fields. Omnichannel retail is just one component of a successful digital strategy, and it should be supported with social media marketing and search engine optimization for full effect.
What are the main benefits of omnichannel retail?
The benefits may be classified into two distinct groups – those that improve customer experience and those that improve the bottom line. In the first group, I’d point out time savings resulting from the possibility to consult with the dealership remotely as the most important one. Customers also have the ability to hunt for the best deal and compare multiple offers on the same vehicle before making a purchasing decision. On the other hand, dealers will be able to reach far more customers than before, overcoming the limitations of the local market and attracting buyers from a wider geographic area. Meanwhile, individual salespeople will be able to act on more leads than ever before, exchanging information through e-mails, mobile apps, and other electronic means. If you do it right, this should strengthen the revenues and more than offset the costs of the initial transition to omnichannel model.
Why saving time is just as important as saving money?
Let’s face it – who has the time to visit a half dozen dealerships to compare the prices anymore? People have a lot more commitments and distractions today, so they are looking to avoid unnecessary forays through heavy traffic. While a huge majority (nearly 85%) still prefers buying the car in person, many of them would rather skip all previous visits and replace them with online research.
Quick and efficient customer service is the cornerstone of good customer experience, and can sometimes have a stronger impact on closure rate than a lowered price. Additional retail channels reduce the amount of effort the buyer needs to invest in order to locate a favorable deal, so they are perceived as benefits by many buyers. In effect, the time buyers spend online chatting with the dealer about potentially interesting cars will be seen as a positive proof of good service rather than a chore that needs to be coped with.
What will change in the retail auto industry in the near future?
Naturally, proficiency in omnichannel retail requires an entirely new skill set. Face-to-face persuasion is becoming less important than a systematic building of a rational case. Since 45% of customers indicate a preference for anonymous negotiation, car dealers will have to find ways to present their arguments remotely, aided by visual presentation and statistics when possible.
Today’s customers are well informed and always hungry for more information, so the traders have to be better prepared to answer in-depth questions about fuel economy or extended warranties for each model. With the continued expansion of electronic payments, security concerns will become even more critical than today, along with data privacy and similar issues that were traditionally not a part of the car salesman job. If you ask me, that’s a fair tradeoff for increased outreach radius and a better chance for reengaging the buyer repeatedly through electronic channels.
What elements of auto retail will remain the same?
No matter which channel you might use to sell the product, your name and reputation will still arrive ahead of you. Strong dealership brands known for excellent customer service and competitive prices won’t have to change their business model by much, only to adjust to new communication mediums.
While some critics claim that online shoppers might prioritize penny-pinching over quality, so far the numbers don’t bear this out. The test drive will remain the crucial selling point – an automobile is an expensive item and few buyers would accept to part with their money without seeing their new car in person. However, around 67% of buyers would prefer not to listen to a sales pitch while testing the vehicle. I would dare to claim that successful retailers will stay on top if they embrace new methods and acquire new skills quickly, as the fundamental principles that guide the transaction will be largely the same as they always have, albeit with minor modifications. In other words, this should be smooth evolutionary development, not a sweeping overhaul that would require a total reset.
Adopting an omnichannel retail mindset
Be aware that going omnichannel requires more than just opening a dedicated online store. The most important aspect is the adoption of a more flexible and more dynamic mindset, which is necessary in order to take full advantage of additional opportunities. A good way to start is to study online stores of key competitors and analyze their strategic decisions before coming up with an approach that best highlights the unique strengths of your brand.
You would also be wise to hire professional assistance to design your website and formulate a plan for the online sales campaign, as this will help you avoid common beginner mistakes. You should also actively follow current news about mobile retailing, and perhaps even complete an educational course on this subject. Regardless of how skilled and experience you may be, you can take a few pointers from experts in this field to accelerate your learning curve.
Hopefully, you already realize that the introduction of digital channels is indispensable for customer satisfaction and will seriously consider heeding some of the advice provided in this article. Ted’s Playbook is a proven resource that can help you stay in touch with fresh industry trends and expand your business in new ways! Keep coming back for more content every week, and you will pick up a ton of useful tips for improving your online retail skills.