Digital transformation is having an increasingly significant impact on the automotive industry, with today’s digital-first consumer having high expectations for their car buying experience.
AutoTrader surveyed 5,000 consumers and found that 72% are now open to buying a car online, rather than visiting a dealership to complete their purchase.
What do today’s digital-first consumers expect? And how can automotive brands in all parts of the purchase chain - dealerships, retailers and OEMs - address their challenges to create a seamless customer experience between digital and in-person?
The virtual showroom
More and more consumers are looking to validate their purchase through digital before they buy, with research from Giosg suggesting only 28% of buyers will visit a dealership as the first step in the buying process.
Digital-first consumers research, select and purchase cars in different ways to their non-digital predecessors and have much higher expectations of dealer capabilities.
Two-thirds of all car buyers now use digital channels to gather information about their prospective purchases. That figure rises to 71% for electric vehicle buyers.
Rather than spending a weekend trailing around a number of car dealerships, consumers now prefer to research their automotive purchase online thoroughly, before even setting foot into a dealership.
A top class digital experience, across multiple channels, is crucial to the digital-first consumer. It serves as a virtual showroom, providing detailed information, reviews, testimonials, high-quality visuals, and interactive tools to explore vehicle options.
The digital experience not only enhances the consumer's research process, but can also establish credibility and influence purchase decisions, ultimately driving customer engagement and conversion.
The human touch
However, this doesn’t negate the enduring importance of physical dealerships in the purchasing process for consumers. Despite the rise of online car shopping, physical dealerships remain an essential part of the personalised automotive sales experience.
Consumers still value the opportunity to see, touch, and test-drive vehicles before making a purchase decision.
In fact, “dealers engender the most trust among consumers,” according to a 2023 Deloitte study, and the vast majority of consumers consider a personal relationship with a dealer to be key in their decision to buy. The ability to ask questions, receive expert advice, and have a tangible experience with the vehicle significantly influences their buying decisions.
This is reflected in the data of sales from solely online car retailers too. In 2022, online car retailer Cazoo sold 85,000 units online in the UK, which represents just over 1% of the UK’s total used car sales for the year.
But if consumers want a digital experience, why aren’t online car sales dominating?
The complexity of the car-buying process, which involves considerations such as financing, trade-ins, and after-sales services, often requires personalised assistance and guidance that physical dealerships can offer.
The established reputation and local presence of physical dealerships provide a sense of security and accountability.
While online car sales companies have made strides in convenience and accessibility, the importance of physical dealerships lies in their ability to deliver a comprehensive, personalised, and trusted car-buying experience.
Similarly, though it’s necessary to visit a car dealership to conduct the real thing, 96% of consumers still want to be able to book their test drive online, according to Keyloop.
And whilst virtual showrooms and augmented reality experiences in car purchasing have gained traction, they often fall short of replicating the in-person dealership experience.
The omni-channel experience that ties together the human touch with the ability to physically engage with the vehicle fosters trust, reassurance and confidence in the purchasing decision, making physical dealerships an essential element of the automotive sales journey.
Bricks or clicks?
Digital transformation certainly doesn’t spell the end for traditional bricks and mortar in automotive sales.
It does, however, pave the way for a unique consumer journey, a hybrid of in-person and digital experience, enabling the customer to create a truly seamless experience, using as much or as little of either medium to complete their purchase.
Keyloop’s research found that 88% of consumers want to use a personalised digital engagement tool, 78% prefer signing documentation electronically, 57% would buy from a dealership if a part-exchange offer had been made online first, and 62% of consumers wanted to use digital tools in after-sales too for booking and managing their vehicle services.
However, as AutoTrader highlights -
“A significantly low percentage of businesses have implemented these core operational changes required to support a truly omni-channel experience…Those who have made these operational changes are already seeing significant value.”
This means that there is some way to go for a lot of automotive businesses to create the experience that their consumers desire.
It is important for automotive companies to recognise that an entirely offline car purchase no longer exists. Shifting to an omni-channel business model may make all the difference in appealing to incoming generations of car consumers.
The leaders will be those that prioritise the seamless integration of technology to bridge the gap between digital and in-person experiences, satisfying the expectations of today's digital-first consumers.
Digital detox with 383
So what can companies do to support the changes needed to deliver an exceptional omni-channel experience for consumers?
Selecting the right digital and in-person capabilities that will work best for you requires a better understanding of your consumer and partnering with a business who understands your challenges to create new solutions to drive growth.
383 specialise in helping automotive companies unlock valuable insights into their customer base. Our team of experts is well-versed in the latest digital trends, consumer behaviour analysis, and personalised marketing strategies.
Collaborating with us will give you a competitive edge, with a tailored approach to meeting the demands of today's digital-first automotive consumers.
Our journey mapping framework allows us to capture customers' end-to-end interactions with your brand and uncover friction points, trends and hidden opportunities. Next, we empower you to turn this data into powerful solutions through rapid ideation, prototyping and validation.