Customer expectations are changing as technology reaches deeper into the dealership
RESEARCH by Cox Automotive Australia is showing that car retailers can achieve better results with buyers if they change their mindset from viewing their website as the extension of their showroom to viewing their showroom as an extension of their website.
In an informative presentation at the last AADA Convention the general manager of retail and data at Cox Automotive Australia Michael Clarke told delegates: “Your front door is absolutely your website now.”
Mr Clarke revealed a strong correlation between an informative and transparent dealer website and the propensity of a customer to buy from that retailer and become a repeat customer.
“We need to make sure that we’re driving customers to the website, but then give them the experiences they want to then stay online or stay with you as a business.”
Mr Clarke’s message was that by providing buyers with all the information they need on the dealership website, making the website as important as the showroom, prospects are more likely to buy from that dealer. Not only will the dealer have increased digital leads but prospects are more likely to buy finance from that dealer as well.
He said that technology was rushing ahead at such a pace that it was getting harder to impress buyers with new products and features.
Mr Clarke said that there was a whole generation that has never known life without a smartphone and that consumer research was showing that the way to impress buyers these days was by providing them with an exceptional experience built around openness and transparency (no secrets).
He said that the integration of the Apple Store with the Apple website sets the benchmark for customer experience and that dealers should note that 62 per cent of customers say their expectations with one industry affects their expectations of another.
“Retailing is very advanced when it comes to digital online transactions. In automotive, we’re still catching up,” Mr Clarke said. “The customers are now comparing us to that experience. When you go into an Apple Store, that’s an experience, but when we go into a dealership, often a customer sees it as a chore. We need to move past that.”
“Millennials make up 40 per cent of our automotive marketplace now. They are now our largest market portion.
“The iPhone came out in 2007. By 2014 toddlers were adequately managing an iPhone or smartphone. And now they’re buying cars. So those toddlers today have never had a day or a world that they haven’t had innovation in their hands; not a day where they have not had access to information at their fingertips.”
Mr Clarke said that the COVID pandemic had driven online commercial innovations that would continue. He said that 59 per cent of people believe that the digital systems introduced during the pandemic will continue on and indeed grow, 35 per cent would continue to use the services at the same level as today and just 6 per cent said they will use these systems less in the post-COVID era.
He said that in this time of great change nearly 90 per cent of customers were saying that trust becomes more important in transactions. He said:
- 73 per cent of customers expected companies to understand their unique needs and expectations
- 71 per cent have switched brands at least once in the past year
- 68 per cent had purchased products in new ways over the past two years
- 53 per cent of Australians buy something online every week
Mr Clarke said that with fewer cars available today, buyers are spending less time online. Even so, he said, 83 per cent of buyers start online and “85 per cent are more likely to buy from you if you show this trust and transparency. This is a massive statistic particularly when you think that 80 per cent of customers buy from the first dealer they visit”.
“So if 80 per cent are going to buy from the first dealer, if you are giving them the experience that they expect both online and in store, chances are you’ll win their business. That is why it’s so important that we have to make sure that we play in both spaces.”
Mr Clarke said that a post-COVID study found that 76 per cent of people would be comfortable purchasing an entire vehicle online. That is up from 30 per cent just a few years ago. That’s a massive shift in consumer expectation demand.
“We see that when customers initiate finance online there is a 14 per cent penetration uplift. That’s a significant increase in revenue across the business. Plus, it’s a good customer experience because 94 per cent of customers say they would apply for finance online, if they could.”
Mr Clarke said dealers need to be building rapport with customers online and that if they achieve this they will see:
- Customers are five times more likely to submit a lead if you provide digital tools online with trust and transparency.
- Dealers achieve a 46.4 per cent higher closing ratio when they enact those tools because they’re further along the funnel and more likely to convert
- 24 per cent higher gross profit
- 14 per cent higher finance penetration.
- 30 minutes saved per transaction which is a benefit for the buyer and a cost saving for the dealership.
- Customer saves 2 hours 7 minutes saved researching the purchase online
Mr Clarke warned delegates that the new online used car retailers were showing that buyers are prepared to order and pay for cars online and that the new form online retailers were now attracting an online share of traffic that rivals the OEM websites.
“The online retailers, effectively online use car retailers, are going from strength to strength. “They’re growing momentum. They are winning the customers’ minds and hearts because of the experience. They don’t have better stock than anybody else and they don’t have better processes. And they don’t have team members because they are not the same construct. They just have a different solution and a better online experience and the customers are voting with their money.”
Published on: GoAuto News Premium | By John Mellor on 9th July 2022 | Read it on Go Auto News Premium here