The Internet has dramatically changed the way consumers buy products. With a flick of a finger or click of a mouse, buyers can compare prices, make a transaction, and sit back and wait for the product to arrive on their doorstep. However, the Internet has been slow to transform the car buying process. According to Automotive World, “The automotive retail sector is quickly adapting itself to changing consumer preferences, with a growing focus on digitalisation and personalisation. According to recent research, there is still considerable work to be done.”
Autotrader conducted a Car Buyer of the Future study which found that only 17 out of 4002 respondents are content with the current car buying process. The study also found that if improvements are made to the process, car sales could reach even higher heights than we are seeing today. Assuming improvements are made, 72% of potential car buyers will visit dealers more often and 53% will purchase a vehicle more often. Automakers are poised to benefit greatly from improvements to the car buying process.
The Internet can and should dramatically improve the car buying process. An Accenture study found that car buyers are already using the Internet to make vehicle purchases, but want the Internet to play a bigger role in the future. The study found that “80 percent of drivers seeking to purchase a new vehicle are using some form of digital technology to research their buying preferences, and nearly two-thirds (62 percent) are initiating the car-buying process online, including consulting social media channels, before entering a dealership.” A whopping 75% of respondents indicated that they are open to the idea of conducting the entire car buying process online.
While it is clear that car buyers want automakers to better utilize the Internet, physical dealerships are not going anywhere anytime soon. Automotive World reports that “43% of study respondents said they see the dealership as a place to learn, and these consumers are looking to validate information they found online, learn about specials and offers, and learn about warranty and service.” Though some consumers still prefer a hands-on buying experience, they do want the dealership experience to improve. MSN believes the dealerships of the future may resemble an Apple Store: a dealership with a well-trained, knowledgeable staff that is not working for commission. This can remove much of the stress that is currently felt while buying a car. Additionally, improved utilization of technology can vastly improve the dealership experience.
The Internet has transformed a wide range of industries, from banking to the taxi and hotel industries. The automotive industry can dramatically improve the car buying experience by embracing the Internet and modernizing physical dealerships. It would truly be a win-win scenario, as both automakers and consumers benefit. For the automotive industry, there is much to gain and nothing to lose.