In the previous decade, automotive dealerships have hesitantly grasped changes in the retail scene welcomed by digital channels such as the internet. Furthermore, that moderate play would have continued despite the COVID-19 pandemic venturing around the globe and disrupting business operations of various industries, including automotive. Therefore, the lockdowns that have been taking place have forced automotive dealerships to focus their attention on embracing technology and innovation, as well as prioritizing on keeping vehicle buyers first. In addition, the entire car buying process and consumers’ expectations changed overnight. As the lockdowns continued in several parts of the world, the physical aspect of visiting an automotive dealership was not possible, and this led to a boom in online retail sales for the industry. Most of the buyers were comfortable with the online process, but they felt the need of a human intervention in some scenarios. “Buying a car is this tremendously exciting moment in people’s lives. Unfortunately, the experience of buying it sours that experience,” said Ernie Garcia, CEO of Carvana.
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Digitalization of Automotive Dealerships
Many automotive dealerships in North America, in response to the ongoing pandemic crisis, are forced to scale up their online presence to achieve more sales. After the closure of many physical automotive dealerships, the demand for new vehicles dropped during the first half of 2020. While the pandemic has enforced automotive dealerships from fully establishing their business processes online, there are some automotive dealerships who are presently renovating their retail fronts in order to support social distancing. Moreover, providing services such as home delivery and pick-up were purely reserved for luxury class vehicles, but this service is now being enabled for non-premium vehicle categories as well.
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Reports published by KPMG state that 83% of vehicle buyers will not buy, lease, or finance a vehicle without taking a test drive, whereas 47% of the buyers prefer visiting the physical automotive dealerships. Showrooms will still exist for providing the in-person experience that cannot be compared to the experience raised from online channels. As the pandemic continues to affect how automotive dealerships operate, and as many buyers become more open to the concept of purchasing a new vehicle completely online, there are many other buyers who still prefer to walk into the physical dealership store. Nissan Canada took the idea of providing video tours of their new vehicles to the next level by introducing the Nissan Studio website.
Automotive Dealerships Focusing Towards Customer-Centricity
“Customer experience is the No.1 priority for remaining relevant to consumers,” says George Hines, Senior Vice President and Chief Innovation and Technology Officer at Lithia Motors. Prior to the emergence of search engines being a primary source of information for most vehicle buyers, automotive dealerships had superiority when it comes to defining and handling transactions. This meant that the automotive dealerships knew that buyers’ information was limited to the data provided on the sales brochure. However, this trend has now changed, with vehicle buyers doing extensive research before actually contacting the automotive dealerships. By using online and digital channels, consumers are now more aware about the product and service offerings present at the automotive dealerships. In order to retain consumers, automotive dealerships are currently offering extra value added services such as providing test-drives at homes, which has formed deeper relationships with the consumers. “It’s all about customer experience,” says Sandy Schwartz, former CEO of Cox Automotive, now CEO of Cox Family Office. The pandemic has forced the majority of vehicle sales to emerge from online channels, and automotive dealerships have oscillated to digital retailing as a practical way of surviving in this uncertain economy.
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Conclusion
Regardless of the pandemic and its impact on the global economy, automotive dealerships are still confident that the physical stores will reopen soon. Even when the lockdowns come to an end, having an online presence will still be crucial for the automotive dealerships. Keeping customer satisfaction and sales in mind, automotive dealerships will continue to have an online presence. This will continue to provide ease of access to product information, and equip consumers with the ability to support options that can be really helpful when purchasing a vehicle online.