The False Promise of Ecommerce

July 1, 2020

By Mike Cavanaugh, EVP, MAX Digital and Tim Porter, Customer Care Director, Zimbrick Automotive

Have you been wanting to slap that buy now button on your site? We get it. It feels great to be able to check the box, but if you want your dealership to truly serve the needs of you customers now, today. That’s not what you need. At least not first. While retail automotive is moving towards digital and the coronavirus outbreak has given it a mighty push. Ecommerce today just isn't nearly as big as you would think.

However, the influence online shopping has had including expectations of transparency and ease of purchase need to be embraced across the full car buying journey because the consumer preferences for the buying path have changed pretty radically and they are expecting car buying not to be awful and they are expecting you to help. So where are we in terms of market penetration for delivery outside of the dealership?

Prior to Outbreak Dealers Predicted Online to Double by 2025
Source: MAX Digital 2020 Dealer Survey

This stat recently shared in Vroom filings, that there was a mere 0.9 percent e-commerce penetration in retail automotive for 2019 suggests that we are starting with very low penetration.
Source: Vroom Filings

And there is a huge disconnect between claimed interest & actual online purchase behavior. In a 2019 JD Powers Study, 43% of people say they want to buy online and 90% reported that they went to the dealership.

In fact, purchase at dealership is very dominant with 86% of consumers reporting they were going to the dealership, very close to in line with the 15% delivery of the Annual Dealer Survey numbers above. Even now post-outbreak. Online buying interest is rising, but still a very small segment of buyers.

There are slight differences for new and used shoppers.
84% of new
car shoppers / 87% of used car shoppers plan to visit a dealership to check out and/or test drive the car before buying instead of buying online without visiting the dealership. People who intended to buy used vehicles were more likely to contact someone at the dealership to get more information about the vehicle prior to coming into the dealership.

Source: MAX Consumer Insights Survey May 16, 2020

Why is coming into the dealership so compelling? As Tim Porter, Customer Care Director at Zimbrick Automotive likes to say, it’s similar to a bakery, you can have the pictures online of everything… but it's just not the same without being there, taking it in. People want to come to the dealership because they want to experience it. If the car isn't right for them, they don't want to buy it. It’s one of the most expensive purchases we make, and we want sensory reassurance that it is the right one.

There are three CONSUMER JOBS they are trying to complete. #1 Find the car that best fits my needs – at a fair price, #2 Check out the car and decide if I’d like to buy, #3 Buy car quickly, painlessly and get a fair deal.

That first task is handled best online, but that second job is best done in person. While we all know that most customers start online and most come to the dealership, few dealerships would say their online to in-store transition is perfect.

46% of the USED CAR shoppers want questions answered FIRST before heading to dealership.  
Source: MAX Consumer Insights Survey May 16, 2020

90% of dealers said their sales process needs to change to work more seamlessly with digital retailing.
Source: MAX Digital 2020 Dealer Survey

So how can you make it better?

Set them up for success. At your dealership, they want to know:

  1. Does this car meet my online expectation?
  2. Does it have equipment that I want?
  3. Test drive – does this car work for me?
  4. Test drive – how does it feel to drive?
  5. Am I excited about owning this car?

Provide largest possible view for your team. If they can see all inventory, they can answer more questions, make more matches. Provide all of the detail available about a particular unit, so they can reassure the customer the vehicle will meet their online expectation. Anything available about that vehicle should be accessible to your team at a glance. If your website is slow to navigate, give your team a fast track to that information and the ability to share it. When it's easier, faster and even visually appealing to view that inventory, everyone wins – your BDC team, salespeople, and your customer.

Make your team instant experts

Make it fast and easy for your customers and your staff. Tools, like MAX BDC that help them quickly identify vehicles, answer questions and keep a living breathing record of their progress that is sharable at every step of the process. Secret shop your own experience to inspect what you expect. Have you given your team the tools they need to be successful?

Millennials are more likely to cite inadequate training as the main reason for turnover. 51% of millennials suggested adding technology would increase profits.

Assess your team

Is your team right? Are your people really good for the environment today? Be honest with yourself. Are they internet-shopper ready?

  1. Are they good at engaging?
  2. Do they want to help?
  3. Do they really care?

If they are not you need to hire new people and now is a great time to get the team that can transition your visitors from online to in-store.

Most people are comfortable visiting dealerships

Despite COVID-19 fears, 85% of consumers are comfortable provided that enhanced safety precautions are taken.  And they trust dealerships more than other outlets. So be ready in store.

Source: MAX Consumer Insights Survey May 16, 2020

Local car dealerships are more trusted on safety, strengthen your community ties

Consumers are more confident buying from a local car dealership than from either an online vendor like Carvana or a national chain like CarMax. Sixty-three percent of people indicated they were very confident or confident in a local car dealership’s social distancing and coronavirus safety procedures, compared to forty-six percent for those other purchase channels. We’ve got a theory on why. Because local dealership are part of the fabric of the community and when the chips are down your family, friends and neighbors, that closest social circle makes all the difference. Take advantage of this time to demonstrate your dedication to the community.

Taking into account social distancing and coronavirus safety procedures, how confident are you purchasing a vehicle from ________?
Source: MAX Consumer Insights Survey May 16, 2020

What matters most in digital retailing?

The whole thing. Half the picture is letting your customers know what you have to offer and having tools to help, but the other half is delivering on that promise with the people and the systems in-store to make the transition smooth and purchase process easy.
Source: MAX Digital 2020 Dealer Survey

Break it down for your location and keep it simple.

  1. Answer every question
  2. Make the transition seamless
  3. Keep everyone safe in store

Lead. Help. Be resourceful with what you have. If you don’t have online check out that’s okay, but be creative what can you do to deliver the car whenever your customer needs it. How can you make the process as touchless as possible?

Fall back to the Golden Rule. Treat others like you would want to be treated. In this turbulent time remembering the Four Cs can help help you lower the stress for your customers and your team.

  1. Calm - “I’m anxious”
  2. Certainty - “What’s Going To Happen?”
  3. Convenience - “Yes, but on my terms.”
  4. Connection - “I need a friend”

Over-communicate to calm anxiety and increase certainty. Clarify the order as early as possible. Offer information on trade-in, monthly payment and, protection options so there are no surprises.

Let your customers understand where they stand – REAL TIME. How can you make it easier and more convenient at every step? Give your team the process and tools so that they are supported and guided through the steps. When your BDC staff are not stressed searching across four different websites and calling your sale team for answers, they can relax and connect with your customers.  Hire well and provide them structure to succeed.

Buying a car is supposed to be fun.  Make it easy for your team to be consistently awesome!

MAX BDC can help, try it now. See how Tim and the Full Zimbrick team are setting more appointments

About The Authors:
Tim Porter
leads the Zimbrick Customer Care teams for both sales and service. Tim has been with Zimbrick for over 23 years. He started in sales… was a pioneer of our training department and eventually took his current managerial role that he’s held for the last 10 years. During his time here he continues to teach multiple classes for our sales personnel, including a week long class held three times a year called the “Road To The Sale” Tim graduated from UCONN with a Master of Fine Arts degree in Directing. As an Associate Professor at colleges in both Iowa and Texas, Tim performed in over 80 productions and directed another 50. In addition to his work in television, radio and theater, Tim always had a passion for automobiles which led him to join the Zimbrick Family!
Tim is fond of saying “Selling is the closest thing to being on stage that I can think of….in today’s world if you can’t bring enthusiasm, advocacy, compassion and product knowledge….the road will probably be a rougher one…..”

Mike Cavanaugh grew up in the retail automotive industry working with his father at a dealership in Metro Detroit. He worked his way up from cleaning cars, to sales, management, and was COO of a 28-store dealership group. He’s also served in the United States Marine Corps and was a Director at one of the largest automotive finance companies in the world. Currently he serves as the Executive Vice President at MAX Digital, a Chicago based software company that provides inventory management, merchandising and digital retail solutions to dealerships across America.