Revolutionizing Car Buying: How Digital Retailing Wins Over Consumers
In the fast-changing automotive sales world, a major shift is underway in how buyers are approaching shopping and purchasing. The rapid adoption of digital retailing, brought on in 2020 due to the pandemic, has permanently changed how buyers shop for vehicles and reshaped the traditional car buying experience.
According to S&P Global Mobility’s latest Vehicle Buyer Journey Study, 65% of US vehicle buyers shop online or partially online. This continues a trend, with “Online Readiness” up by 17 percentage points in the past two years.
Most importantly, 61% of US consumers said that the availability of an online transaction option influenced their buying decision.
In this blog post, we’ll explore how automotive digital retailing has changed vehicle buying behaviors – and how dealers can leverage its multifaceted benefits and functionalities to win and retain customers long into the future.
What is Automotive Digital Retailing
While the automotive retail industry was a relatively traditional, physical process until recent years, digital retailing and selling vehicles in an omnichannel retail environment is now the norm.
Automotive digital retailing itself includes a wide range of online tools and platforms created to help consumers navigate the ever-challenging car buying process. This seismic shift places a ton of importance on customer-first approaches, putting the buyers’ preferences and needs before basically anything else.
Benefits of Automotive Digital Retailing for Consumers
One of digital retailing’s most interesting features is the freedom from geographical barriers it creates. Buyers can explore any dealership’s inventory without being spurned by their physical location. The convenience factor is a huge draw, allowing buyers to browse options, customize their preferences and compare choices – all from the comfort of their own homes.
Offering buyers the convenience of shopping your available options without driving to the dealership, digital retailing is key to winning today’s customers. A stunning 60% of consumers surveyed in S&P Global Mobility’s Vehicle Buyer Journey Study reported that they drove further than their nearest dealer due to the availability of online channels.
Transparent pricing is incredibly important for digital retailing. Giving buyers a clear breakdown of costs is critical, including taxes and fees that often sneak in at the end of a sale. This fosters a sense of trust and builds confidence across their purchasing journey. The streamlined shopping experience also removes the stress that goes along with the traditional car buying process, adding to improved customer satisfaction.
Enabling Consumers to Seamlessly Navigate Automotive Digital Retailing Systems
Digital retailing systems for car dealerships offer many tools that empower buyers like never before. Car searches can be conducted with precision, including checking boxes for options that can become incredibly granular. Using intuitive platforms, shoppers can now configure their dream vehicles, picking features and specs that jive with their needs.
Online tools can also help break down complex pricing information and help ensure buyers are completely aware of all of the costs like taxes and fees. These kinds of features help buyers to make informed decisions, letting them weigh the pros and cons of various options based on the data relevant to them, while personalization and customization across the shopping experience help them purchase vehicles that reflect their unique needs.
Online Vehicle Browsing and Selection
New virtual showrooms equipped with 360-degree views of every vehicle in a dealer’s inventory have redefined the concept of ‘vehicle inspection’. Buyers can now virtually step inside cars, checking every angle and tiny detail with unmatched clarity. Comprehensive vehicle information and specs are at buyers’ fingertips, providing important insights to make smart decisions.
Virtual Test Drives and Simulations
The use of augmented reality (AR) and virtual reality (VR) has taken the idea of a virtual test drive to a whole new level. Buyers can engage with experiences that offer a realistic view of a vehicle’s features and components.
Transparent Pricing and Financing Information
Online pricing calculators and pre-qualification options for financing have completely changed the financial element of car buying. With just a few clicks, buyers can get accurate pricing details and determine their eligibility for financing, saving many shoppers time and money.
Trade-ins and Valuations
Online assessment tools for trade-ins have simplified another key aspect of car buying. Shoppers can obtain trade-in value estimates almost immediately, learning the potential value of their current vehicle. This helps them make informed decisions when considering trade-ins as part of the buying process – and can help inform your team when engaging buyers later in their journey.
Building Trust and Confidence
Trust and confidence are important contributors to successful transactions at your dealership. Online reviews and ratings act as guideposts for shoppers, offering insights from those who have walked the same path. These real-world experiences from real people lend authenticity to the buying journey, allowing shoppers to make better decisions.
Through digital conversations with sales reps, dealers can offer personalized assistance similar to walking into a traditional showroom. When informed by customer data, these virtual conversations can be tailored to bridge the gap between the online and in-store experience – and build confidence with customers at every point of their buying journey.
Overcoming Challenges and Concerns
While digital retailing is undoubtedly changing how buyers shop, customers still typically want to touch, feel and experience their vehicle before purchasing. Plus the physical dealership provides buyers with peace of mind by having a local go-to point for servicing — as remote-servicing models continue to face challenges.
To ensure they’re bridging the gap between their online and in-store buying experience, dealers need to ensure they have visibility into their customers’ online interactions. By leveraging a comprehensive sales and marketing platform to aggregate data from their CRM, DMS, CDP, website and more, dealers can use the wealth of data created by digital retailing platforms to inform their customer interactions.
However, as dealers leverage data-driven tools and technology to win over customers, buyers need to know that their personal and financial information is safe. Dealers need to ensure any technology or data providers that prioritize data security.
Impact on Dealerships and Industry Players
Digital retailing in the auto industry has changed the roles of dealerships and industry players alike. Traditional dealerships are evolving to be tech-centric, embracing new roles that cater to the digital-savvy consumer.
Physical showrooms are also integrating new technology to make the in-person experience that much better. Interactive displays, virtual reality test drives and digital information kiosks provide a dynamic environment for consumers to engage with vehicles and gather information.
A growing number of physical and digital touchpoints involved throughout the evolving customer buying journey has led to a new industry-wide reliance on integrated solutions. This collaborative effort has led to the emergence of a growing network of data integrations and partnerships, all in an effort to create a seamless customer experience.
Future Trends in Digital Car Buying
The digital car buying experience is already preparing for more innovation and further transformation.
AI-powered sales and marketing technology is playing a growing role in offering personalized communications with the emergence of new generative language models. Traditional chatbots are being replaced by sophisticated virtual companions who will assist shoppers throughout the buying journey.
Emerging AI-powered digital retailing solutions can quickly answer buyer questions, provide recommendations and tailor the buying experience to each customer’s individual needs.
As buyers begin to expect the convenience and transparency offered by digital retailing, the traditional showroom model may be forced to make some changes of its own. Enhanced AR and VR experiences are coming. Buyers can expect more immersive test drives and more interactive vehicle walkthroughs that mirror the physical experience incredibly well.
Embracing the Digital Automotive Landscape
The rise of automotive digital retailing has brought in a new era of car buying. As traditional car-buying shifts into a new omnichannel environment, dealers need to embrace new tools and strategies to create a seamless customer journey.
By embracing the data-driven opportunities made possible by rapid digitization, dealers can engage buyers across channels and close more deals by offering a personalized buying experience that evolves with their customers’ needs.
Interested in learning how Mastermind can empower your dealership to engage buyers with personalized omnichannel marketing and buyer insights? Request a free demo.
