by The Digital Shift in Consumer Behavior
In the last decade, there has been a significant shift towards online shopping across all industries. As internet and smartphone penetration increased exponentially, consumers got used to researching, comparing options, and purchasing a wide variety of products from the comfort of their homes. The automotive industry was initially slow to adopt internet retailing but realized the need to transition as people spent more time browsing cars online before stepping into a dealership. Statistics show that nowadays over 70% of car buyers conduct some level of online research before making an offline purchase. This digital shift in consumer behavior compelled automakers and dealers to up their online game.
Building Virtual Showrooms
Automakers were among the early adopters of virtual showrooms where customers could browse entire model lines, visualize interior and exterior colors in 3D, get detailed 360-degree views and specification sheets of various trims. This allowed spreading brand awareness and generating initial interest without any physical infrastructure. Gradually, they started introducing booking and inquiry forms, steering interested shoppers towards the nearest dealer network. On the other hand, individual dealerships also recognized the need to have an Online Car Buying presence with detailed inventory listings, special offers and the option to request test drives or quotes. This helped qualify some leads before the traditional phone or walk-in enquiries.
Online Financing and Trade-Ins in Online Car Buying
As online configuration and selection grew in popularity, buyers demanded more transactional capabilities on automaker and dealer websites. Many responded by including financial calculators to provide monthly payment estimates based on select loan terms. Few pioneers took it a step further by partnering with banks and credit unions to provide provisional lending approvals online. Similarly, to make trade-ins and down payments more convenient, some portals introduced digital forms to enter a vehicle’s VIN or details to generate its estimated value. Coupled with interactive pricing tools and payment breakdowns, these new digital touchpoints smoothed the journey from browsing to purchase.
Pushing the Boundaries of E-Commerce
In the fast-paced automotive industry, a stand-alone online presence was not enough to thrive – brands had to strengthen omni-channel integration. This involved providing a unified shopping experience on all digital and physical platforms. For instance, consumers could now locate the exact build of desired cars at nearby dealerships from smartphone apps. Their preferences also seamlessly flowed to companion websites where sales teams could access it to prepare customized quotes. Delivery logistics evolved drastically too – customers grew accustomed to setting delivery timeslots and digitally signing paperwork from any location for contactless transactions. To tap the burgeoning demand for convenient shopping, new direct-sales models and online brokerages also entered this space.
The Pandemic Effect on Online Car Buying
The COVID-19 pandemic accelerated this digital transition at lightning speed as people avoided crowded dealerships. Strict norms compelled brands to innovate new virtual and remote buying solutions. Many customers first explored multibrand portals during this period, configuring loans, comparing quotes and sometimes even purchasing unassisted due to minimal inventory. Automakers had to sharpen their virtual showroom experiences to account for this behavior change. New terms like ‘digital delivery’ gained prominence as at-home test drives and contactless handovers picked pace. Overall, the pandemic underlined the resilience of online sales in challenging times and boosted confidence in its potential to reach more customers cost-effectively.
Data Analytics and Customer Retention
As commerce shifted online, automakers recognized the boon of massive consumer data goldmine that this new channel unlocked. With consent, they could now access granular shopping behaviors, preferred trims, used locations and much more through website visits and transactions. AI tools helped analyze these insights to personalize engagements, launch targeted initiatives, offer predictive maintenance for used cars and enhance client services. Loyalty programs also evolved to reward repeat and referrals through their digital memberships. Several brands piloted subscription-based models for affordable access to fleets of new vehicles without long-term ownership. Going forward, data-backed retention strategies will dictate competitive differentiators in tomorrow’s automotive retail landscape.
In consumer behavior transformed online car buying completely in the last decade with people now comfortable researching and purchasing cars online. The industry responded progressively by shifting operations online through virtual showrooms, integrated websites, advanced transactional features and streamlined delivery logistics. The pandemic accelerated this digital transition, validating the resilience of online sales. Going forward, brands will focus on leveraging the huge online consumer data through AI for personalized experiences and innovative ownership models to stay ahead in this evolving space.
