How has technology changed car buying?
Originally published on our site for online car buying
Changing landscape of car buying online
Vinadvisor is excited to kick of the digital video series Your Turn To Drive with our inaugural episode How has technology changed car buying? Jim Dykstra, founder of vinadvisor, has teamed up with Joe Webb of DealerKnows Consulting and Shawn Ryder of D2C Media to discuss the challenges facing the car industry due to rapid digital expansion in the online auto space.
Online Car Buying
I’m Jim Dykstra. Welcome to our new series on how technology has changed online car buying. Technology’s greatest benefit, by far, to the consumer has been to simplify their most complex purchases and tasks. It’s easy now to prepare and file income taxes, to buy and sell stock online, to manage your 401K, or even to buy a ticket to a sold-out concert tonight, while you’re riding in the backseat of a car. Consumers will spend more and more online every year for the three simple reasons, really. Number one, convenience. They can shop, compare and buy a car, any time, any place. They don’t need to be in a store. It gives them complete freedom.
Number two, the internet’s access to more information and more products, so they can compare more items, easily shop, compare features, benefits, price, shipping costs, etcetera.
And most importantly, price transparency. And while we all say to ourselves, “I want the best price possible,” what consumers really wanna make sure of is that they got a fair price every time. Fair price and fair treatment. It’s really not asking all that much.
So how can it be that in 2016, in the United States, where 53 million new and used cars will trade hands, that less then 1%, in fact, far less than 1%, will be sold online? How does technology miss this category? Let’s turn to a couple of experts to help us understand the problem better and to talk through some solutions. Start with Joe, take it away.
We used to be an industry built on cultivating relationships, stemming from emotional decisions, and now, the glut of consumer-facing information out there has required us to become almost transactional in nature. It focuses in the online resource sites that educate consumers nowaday, have required dealers to focus their energies on improving themselves on how they merchandise their product, how much product knowledge their teams have, and the price transparency of their organization. Dealers now have to be focused on two different arenas, not just the showroom floor any longer, but also online as well.
Hey, Joe, you make a great point. As customer expectations grow, the bar for the dealer raises higher and higher every day. So, as a result, we have to make sure that our green peas and newbies at the dealership have a little bit more training. So, imagine a customer enters the dealership and they are on the sales floor, and they’ve done their YouTube videos, and their spec sheets, and all of their homework, read all the reviews. It makes it difficult, and if there’s no trust between that customer and the sales team, or that individual at the dealership, it’s an uphill battle to climb.
Auto Customer Satisfaction
Great insights from Joe and Shaun. And I think what they’ve done a good job of is helping us to understand that there’s certainly a ton of value added to the consumer. From the convenience afforded by technology, the ability to shop on any device, whenever they wanna do it, is tremendous. Same as it is with almost every other product. But when it comes time to really compare apples to apples, all the features of car A and car B, new or used, or new to new, lease to lease, and to get a complete transaction price, whether I’m gonna purchase, finance or lease, is almost impossible online. So there’s a big disconnect between consumers aren’t satisfied with the process, and by the way, dealers who aren’t satisfied with it, either. So how do we close that gap between consumers and dealers? Let’s turn back to Joe and Shaun for some more insights.
Jim, I see the divide greater than what dealers would like to admit. Consumers see the disconnect. OEMs feel it, but dealers are taking advantage of a strong economy right now, and they’re not focused on delivering seamless, integrated online to showroom experiences, or online to transaction experiences. When times are good like this, dealers must batten down the hatches, and invest time and money, and dedicate effort and energy into ongoing education for their teams, making sure that they have the best communication methods, the most advanced technology their teams can muster, and continue to deliver the least antagonistic sales process imaginable. Then, we’ll get the attention of today’s customers.
With the amount spent on traditional advertising, print, radio, TV commercials, it’s hard to believe that there’s a hesitation to target customers in their market, looking for vehicles that the dealers have in their lots. If a customer enters in online a make, model, year, geographical location, shouldn’t that start a sales process that meets the requirements of that dealer, and if the customer’s looking for those requested details?
Joe and Shaun, great job summing up the challenges, particularly on the dealers’ side of the business and what they look like when they get to the consumers. The reality is there’s just too great a divide between consumer expectation, which is reasonable, an efficient sales process more likely to find online with everything else they buy, and the dealers and their ability to deliver upon that. Absolutely the most complex transaction most consumers will ever undertake. Complex on the dealers’ end too, but there’s a way to get this done more efficiently. We gotta connect more dots across the process well before a consumer ever walks into the showroom. The fact that 53 million people are gonna buy a new or used car this year, either through a dealer or from a private party, and that their transaction’s gonna take, let’s just say three hours on an average. Imagine what it will mean, in terms of economic value, if we all could save one hour. Fifty three million hours, be a win for everybody.