4 Ways Ecommerce Is Driving Change for Dealerships

Just as shopping for clothes, electronics, sports equipment, and many other consumer staples has moved online, so has vehicle shopping transitioned to the internet. Consumers may not be ending their online vehicle shopping with a point-and-click purchase, but they are increasingly beginning their auto-buying process online. Dealers who don’t address this fact may start to become obsolete. Consider:

● 83 percent of car buyers do online research before buying.

● Auto dealers generate more than 300 unsolicited prospects each month, according to digital media and marketing consultant Ruth Stevens.

● 22 percent of new-vehicle shoppers use social media sites to do some research (and they aren’t thrilled with the information they find), according to J.D. Power’s 2016 Autoshopper study.

● Car shoppers spend more time on the internet (11.5 hours) than they do in dealerships (3.5 hours). They use independent review websites and manufacturer sites before heading into a dealership, which is still the most important part of their research.

Here are four keys for dealerships to consider when planning online marketing, managing their websites, and responding to consumers who research online.

1. Website Staffing Is Becoming Proactive

More than half of all dealerships have designated online sales staffs. This means savvy dealers are no longer simply assigning internet leads to showroom salespeople as they come in. Whether it’s virtual CSRs handling questions in real time via an online chat, or someone responding to customer emails, it’s critical for dealers to handle consumers’ specific questions and needs quickly. Car buyers are often leery about the service they will get from a car seller, so a lack of attention at the beginning of the sales process can scare buyers away, while personal engagement can increase the chances you get a shopper into your showroom.

2. Most Dealerships Sell Some Vehicles Almost Completely Online

According to the National Automobile Dealers Association, approximately 70 percent of U.S. dealerships manage some of their sales completely online (except payment and delivery). Some dealers are able to handle almost all of the sales process online (except signing and delivery). Slow-loading websites, incomplete vehicle information, long wait times to hear back from a human, and other problems with dealer websites give vehicle buyers more chances to back out of a sales process that’s already started.

3. Dealers Get Close to 500 Internet Leads per Month

In addition to the previously cited 300+ unsolicited leads dealers get per month via the web, another 160 or so leads come to dealers who use internet marketing. Auto sellers must be prepared to manage these roughly 500 monthly leads in a timely fashion, or risk losing dozens of potential sales. This can be done by segmenting the responsibilities associated with online leads. For example, dealerships might hire lower-level staff members to manage the routing of leads to salespeople, ensuring that none fall through the cracks. These staff members can also track lead origins, conversion rates, sales by vehicle type, dollar amounts, sales by gender, and other helpful information dealers can use to better understand and manage their online leads.

4. Percentage of Online Sales Likely to Increase Soon

Experts predict that 10 percent of all auto sales will occur online by 2019. As with many online phenomena, this trend could mushroom during the next five years as early adopters spread the word to friends, creating more security among consumers with online buying. David Kain, president of Kain Automotive, told “Automotive News” that fewer than 20 percent of dealers currently have the software to manage online sales. Kain pointed out that in addition to learning how to set up a website to handle online transactions, dealers must also learn how federal and state laws affect online transactions. Smaller and independent dealerships won’t have a huge learning curve to get up to speed with new online-buying technology, but the later dealers start adding this option to their offerings, the more sales they will lose.