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Is the Traditional Car Dealer Experience Changing?

Is the Traditional Car Dealer Experience Changing?

E-commerce has already taken over various industries, retail being the obvious one. However, the automotive industry is a little more reluctant to embrace e-commerce and move on from the traditional car dealership experience. 

The digital experience needs to work alongside the dealership one. A four-hour showroom experience could and is be compressed into a ten-minute online purchase.

Over the course of the last year, the automotive industry has been forced to utilise technology. 59% of customers research a car purchase online before attending a dealership. Social media, mobile websites and virtual reality showrooms are on the rise. Twice as many people start their research online rather than with a dealer. Websites have become the new showroom window for forward-thinking car dealers. Consumers want to research and scout out their dream car from the comfort of their homes. 

People are buying cars less often and frequently turning to used vehicles over brand-new ones. Industry experts estimate that the average digital ad spend for the automotive sector will soon break $14 billion. That is a staggering 200% increase in just three years. 

The new generation of buyers wants a one-click purchase that is quick, seamless and effortless. Unfortunately, this eliminates any relationship between dealer and buyer and any lifetime tune-ups and oil changes.

The traditional car experience is still valuable, and most consumers still go to a car dealership. Consumers enjoy going to a dealership, experiencing the showroom and being sold a car by the salesman. Dealerships offer a personalised experience because they rarely have a high density of shoppers. Mass-transit, however, is less valuable and quite a scary experience for some consumers. Franchise laws are stable and will be difficult to change with the rise of tech. 

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However, the automotive industry needs to adapt to the modern world, and some carmakers are already trying. Audi and BMW have incorporated virtual reality showrooms into their dealerships. The omnichannel strategy is the most popular and effective way to go. For example, Nissan launched its e-commerce platform Nissan@home where buyers can test drive, sign paperwork and arrange the delivery of a new vehicle all from their phone. 

More and more companies are offering doorstep delivery of cars, including Cinch and Cazoo. The pandemic forced dealerships to close and, as a result, a completely digital process shone through. Automakers are trying to recover dealerships through 0% financing and extended loan terms through their captive lenders. They have even started installing new software to browse inventory and apply for a credit payment schedule online. Touchless vehicle pick-up and virtual test drives became essential in 2020 for sanitation reasons.

However, an all-digital transition isn’t possible for every franchise. Ford tried to buy and operate all of its dealerships to compete with independent franchises and failed. We may be shopping for food with the click of a button, but some consumers still crave the personal car experience. 

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