Mobile commerce has changed the way consumers behave. Today, not only can you order exactly what you want no matter where a retailer is located, but you can also check reviews and compare prices while on the go. Even your most exotic purchases can be made remotely - except, that is, when it comes to cars.
Despite a 2015 report from J.D. Power showing that more than half (51 percent) of new-vehicle buyers use a tablet or smartphone to conduct their car research — a 70 percent increase since 2012 — car buying today still means having to visit a car dealership. But for those car dealers, it's not business as usual. For them to succeed, they have to consider their consumers' new buying habits and use of mobile devices when pursuing the sale.
Car Buying Today
According to Dealer.com, millennials find the idea of buying a new car "exciting," but they don't like how long the process takes and aren't satisfied with being given what they perceive as "unclear" information from dealers. In searching for a car, they are more likely to go to their digital devices first rather than to the dealerships.
Consumer Reports and Kelly Blue Book, which offer car pricing and reviews to those intrepid enough to seek them out, now share this information online. And listings sites like Autotrader, Cars.com and Carsforsale.com have fallen in step with the trend. Beyond inventory, sites like CarFax and TrueCar provide a database showing what others have paid for similar cars. With mobile technology, today's consumers are even likely to conduct price comparisons while standing on the lot at a dealership. And it's only going to get more intense, according to Steve Halloran of the listing site CarGurus, who told Boston.com that he's seen an increase in traffic from mobile devices.
Some dealerships have entered the mobile commerce fray by listing inventory online, so their vehicles appear in localized search results alongside the nationwide listing giants. This is a clear win for dealers, whose customers may want to pay $500 less for a car, yet be unwilling to drive 500 miles to make that happen. But appearing in search results is more than just a matter of putting cars online. Dealers may need to bring in a marketing team that's adept at search engine optimization (SEO), so they're listed on the first page of search results.
Upping the Game
These days, any customer who walks onto a lot is liable to know what others are paying for the same vehicle, as well as a car's various attributes and features, so dealers need to add value to the car buying experience. This can be done in many ways, perhaps by offering customers a simple incentive, such as free movie tickets in exchange for test-driving a vehicle.
As reported in Auto Dealer Today, a recent DrivingSales study found that 99 percent of customers expect the car buying process to be a hassle. This is due in part to the disconnect between sales and finance, which can make the purchase process lengthy and mysterious. Dealerships that allow customers to get a trade-in quote, or prequalify for financing online, not only reduce the hassle in-store, but take advantage of a soft "pull" strategy, similar to the metamorphosis of real-estate purchasing.
It is crucial that dealerships adjust to this shift in consumer behavior because in today's economy, it's not just the cars that are being reviewed. Customers are rating dealers, from one to five stars, on sites like DealerRater, which currently boasts more than two million reviews. One important factor that's going to make the difference for the dealers of tomorrow is how well they take advantage of mobile commerce and the technological tools at their disposal to better understand and serve the needs of their customers.