Car buying today is not the same as it was 20 years ago or even 5 years ago. Technological advances combined with the COVID-19 pandemic have led to more and more car buyers heading online to research and purchase vehicles.
Dealerships must adapt and respond to these changes to remain competitive in this new car-buying landscape. The idea of the buying funnel is the same, but customers are moving through those phases in new ways.
The Shift to Online Car Buying
According to a recent Google survey, 92% of car buyers research vehicles online before purchasing¹. Starting their research online allows buyers at the top of the funnel to become more informed and cut down on time spent at the dealership. The internet is also incredibly convenient since there are so many different sources for buyers to consult right at their fingertips.
Many car buyers don’t stop at online research, either. Another study found that 80% of car shoppers are now willing to buy a vehicle completely online². That’s a 50% increase compared to before the COVID-19 pandemic. Factors like hesitance toward going outside during the pandemic and searching for convenience likely drove this growth in online car buying. Young men are the most willing to buy cars online, but many other groups are open to the possibility, too.
Some of the possible concerns for car shoppers considering online vehicle purchases include the following:
- Not being able to test drive the vehicle first
- The cost of shipping the vehicle to the buyer
- Damage or unsatisfactory vehicle condition upon delivery
- The returns process, if any, for cars that don’t meet expectations upon delivery
Savvy dealerships are addressing these concerns to help convince car shoppers to buy from their online showrooms. Some dealerships, for example, offer free home deliveries when shoppers buy cars online. Others post videos of staff test-driving vehicles and showing 360° views of the interiors and exteriors of the cars. And creating this video content isn’t just about splashy marketing—64% of shoppers researching cars online say formats like 360° video would convince them to make a vehicle purchase without a test drive¹.
Trends Currently Shaping the Car Buying Market
Auto dealerships need to stay on top of trends if they hope to beat out competitors and continue attracting customers. These are some of the current trends shaping the auto market that you should be aware of.
Even Higher Digital Sales
It appears that the shift toward online car buying will remain and grow even stronger going forward, especially since the majority of car buyers under 45 prefer online car purchases3. Shopping for cars doesn’t necessarily involve visiting physical dealerships anymore.
More Electric Cars
In recent years, many car manufacturers have worked to develop and release electric vehicles. Sales of these vehicles grew from just 0.2% of total vehicle sales in the U.S. in 2011 to 4.6% in 2021⁴. Expect the demand for electric vehicles to continue growing quickly over the next decade.
Increased Focus on Marketing Personalization
With the breadth of available customer data, from social media interactions to web activity, dealerships can develop more targeted marketing efforts based on their potential customer’s level of commitment to making a purchase. Customers today expect those personalized experiences, so the current trend is developing personalized offers and marketing for online car shoppers.
3 Tips for Meeting Your Customers Where They Are
As a business, you can’t expect customers to just come to you. Instead, you need to meet them where they are to give your dealership the best chance of success. Apply these three tips for connecting with customers where they are, both online and in person.
1. Use Videos
Every dealership owner can tell you the value of a great car photograph, but strong video content is even more powerful. If you aren’t already, start developing video marketing content to post on your website and social media. These videos will inspire trust and help convince potential customers to look through your inventory. Not only will you be helping these site visitors narrow down their choice of cars, but you can also steer them toward your dealership over another by providing them with a high-quality online experience.
2. Emphasize Customer Reviews
Customer reviews and testimonials are powerful, both for online and in-person car shoppers. They show potential customers that your dealership is trustworthy and pleasant to work with. If you don’t have recent testimonials available, reach out to some happy previous customers to see if they’ll share their thoughts. Have these reviews available online—on your website, social media pages, and Google My Business profiles—and consider displaying them or discussing them in person, too.
3. Rely on Data for Insights
Data is an invaluable tool for informing your business strategies and sales efforts. Review data from your website and social media pages and in-person sources, like foot traffic or total sales. Look for patterns in this data to get a sense of where your dealership is gaining and losing ground. For example, the data can tell you whether your website is performing well or if you need to make some improvements to attract and keep online customers. You can even look into the number of online interactions a customer makes before visiting in person for a test drive or purchase.
- The future of car buying. Google. Retrieved on April 27, 2023, from https://www.thinkwithgoogle.com/feature/the-future-of-car-buying/
- Creech, L. (11 March 2021). New Independent Study Finds Majority of Car Shoppers Open to Purchasing Online. Business Wire. Retrieved April on 27, 2023, from https://www.businesswire.com/news/home/20210311005113/en/New-Independent-Study-Finds-Majority-of-Car-Shoppers-Open-to-Purchasing-Online
- Complojer, M. (6 May 2021). Digitization in automotive retail in 2021 and beyond. McKinsey & Company. Retrieved on April 27, 2023, from https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/digitization-in-automotive-retail-in-2021-and-beyond
- Colato, J and Ice, L. (February 2023). Charging into the future: the transition to electric vehicles. Bureau of Labor Statistics. Retrieved on April 27, 2023, from https://www.bls.gov/opub/btn/volume-12/charging-into-the-future-the-transition-to-electric-vehicles.htm#
- Levine, T. (11 March 2022). What Does Today’s Consumer Want? Personalized, Seamless, Omnichannel Experiences. Forbes. Retrieved on April 27, 2023, from https://www.forbes.com/sites/forbesbusinesscouncil/2022/03/11/what-does-todays-consumer-want-personalized-seamless-omnichannel-experiences/?sh=595575911e1e