The traditional car-buying experience will soon be a thing of the past. As digital transformation and ecommerce become prevalent in today’s purchasing experience, dealerships need to personalize and simplify customers’ experiences if they want to stay relevant in today’s industry.
The global automotive industry is expected to reachOpens a new window nearly $9 trillion in valuation by 2030, but it won’t be driven by the traditional car-buying experience of the past. Remember those days of flashy physical showrooms and fierce in-person negotiations? That car-buying experience is officially in the rearview mirror. Today, the auto sector is amidst a paradigm swing toward digital transformation and ecommerce proliferation. Car dealers are leveraging the power of digital marketplaces and ecommerce platforms to deliver unparalleled degrees of personalization and convenience for customers.Â
In fact, a recent surveyOpens a new window from Cox Automotive found that 75% of customers polled were “highly satisfied†with their recent car-buying experience. The satisfaction stems from the shift to digitization, which accelerated at the onset of COVID-19 after dealerships were forced to get proactive about navigating rapid demand fluctuations and pandemic-driven volatility. The shift also aligned with the evolving behaviors of modern, digital-centric consumers Opens a new window  – 95% of current buyers use digital sources of information for purchasing decisions, while 83% prefer shopping online to streamline the process. On average, today’s auto consumers visit 4.2 websitesOpens a new window across multiple devices throughout their purchasing journey.Â
E-commerce Adoption and Revenue Growth
There isn’t a substitute for robust ecommerce capabilities when it comes to sales. OSF Digital’s 2022 U.S. Automotive Dealership Benchmark StudyOpens a new window revealed the competitive advantages of a strong ecommerce posture and the direct correlation between e-commerce adoption and revenue growth. The study, which researched more than 635 in-depth data points of U.S. car dealerships, offered a clear picture of the state of America’s auto retail market. Among its most notable findings included:Â
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- The prevalence and ease of use of an auto dealership’s website capabilities directly impact sales. Â
- The top driver of sales among dealership website functionalities is the ability to search nearby vehicles – otherwise known as “close to me†options – to confirm if a particular car is in stock. Nearly 80% of dealership websites failed to offer it. Â
- The consistency of a dealership group’s website functionality is among the top drivers of new retail units sold.Â
- Instead of traditional still images, customers increasingly desire VR-based 360-degree viewers to examine and customize cars. Yet only 5.5% of all U.S. dealerships offered the in-demand feature.
- Customers prefer email as the primary channel of communication with dealerships – nearly twice more than phone calls, text messaging or in-person conversations. Â
These trends signify the sector’s need to further embrace the power of digital transformation in the years to come. For auto dealerships weathering market volatility, as well as those trying to keep pace with industry disruptors like Carvana, Vroom, and CarSaver, the adoption of cloud-based ecommerce marketplaces that optimize their website capabilities is imperative.
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Enhanced Buyer Experiences and Customer ReachÂ
An extensive ecommerce marketplace can enable auto dealers to offer more personalized and simplified shopping experiences by giving customers a diverse set of new capabilities to leverage. From digital self-service options and real-time nearby inventory visibility to streamlined dealership engagement and VR-driven product customizations, car buyers are placed directly in the driver’s seat with total control of the entire process. By consistently providing these impactful experiences that lead to smart purchasing decisions, dealers can attract new prospects, expand their existing customer base and improve brand loyalty at a time when it’s needed most – according to a report from the Wall Street JournalOpens a new window , 70% of U.S. shoppers have purchased from a new or different brand since the beginning of the pandemic. Furthermore, in 2021, companies that executed personalization collected 40% more revenue than industry peersOpens a new window . Â
It is also important to remember that a dealership’s ecommerce website serves as a critical source of information for buyers to evaluate during their selection process, helping them narrow their considerations and identify key vehicle features and benefits. A dealership website consisting of immersive visualizations, simplified navigation, and consistent operating speed strengthens the customer’s ability to locate the right content at the right time – ultimately driving traffic to the dealership’s showroom. These offerings will continue to be critical for dealers to win in a competitive market driven by omnichannel adoption.Â
Market share can be gained by optimizing website performance to align with consumers’ evolving needs and preferences. Optimizing websites offer dealerships a way to serve customers better, gather key business insights from omnichannel sources, unlock end-to-end customer visibility, and enhance relationships with other distributors. By continuing to modernize the physical and digital sales process through upgrades to their website capabilities, dealers can take proactive steps to separate themselves from industry peers for higher profit potential.Â
Increased Revenue Potential and Cost Reduction
The right ecommerce marketplace solution will generate a wealth of advanced consumer data metrics that can help auto providers increase sales while reducing operating costs. With a unified portal that automates data-driven customer predictability modeling, dealers can unlock key actionable insights revealing their repeat customers’ purchasing patterns and preferences – all viewable in real-time through a single pane of glass. In addition, empowering customers with the digital self-learning tools they need to complete research online saves both parties significant time, thus enabling dealers to reduce labor costs, shorten transaction windows and eliminate traditional customer pain points. It essentially streamlines the road to the sale, leading to higher levels of customer satisfaction and profit potential.Â
As auto dealerships re-assess what a modern sales experience should encompass, adopting the right ecommerce platform will enable them to unify data, simplify the product discovery journey, and offer self-service features. Dealers need tactical, tangible, and pragmatic solutions to engage digital-centric consumers early in the research cycle and transform prospects into customers by offering in-person meetings to book a test drive or receive a quote. They also desire a wider range of data-driven marketing opportunities to engage consumers by using retargeting, email reminders, and cart abandonment techniques. With the additional capabilities afforded by e-commerce adoption, both components are more easily attainable.Â
A window of opportunity exists for the automotive sector to prioritize digital innovation through adopting omnichannel ecommerce marketplace solutions. However, that window is closing fast. Now is the time for dealerships to fully embrace the power of digital transformation – both for their customers and for themselves.
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