Making the transition from traditional to online car sales

by Samantha Ridder

For years, the Internet has fundamentally changed the way we buy things. While other industries felt the changes directly, this took longer in other industries. But nowadays, everyone is aware that the impact of the Internet on all industries is enormous. At first, it seemed as if the automotive trade was largely immune to the upheaval brought about by the Internet. But in the meantime, large parts of the car trade have already been digitized. 

Customers find out about cars online

Studies show that a large proportion of car buyers today use many different sites to find out about models and manufacturers before making the decision to sell. On average, buyers gather information about two and a half months before looking at vehicles. As a result, buyers today are already much better informed about manufacturers and models when they visit the dealership than they were in the past. However, buyers are not using this time exclusively to research their new vehicle, but also to decide where they will ultimately purchase the car. Which tips car dealers should consider in this context, so that it succeeds to convince buyers on the Internet, explains the former car dealership consultant Christoph Adunka in this article: With these 5 tips the digitalization in the car dealership

The impact of the Internet for the trade in new and used cars

The trend, the extensive information procurement on the Internet, is apparent for new cars to the same extent as for used cars. New car buyers use the Internet to configure their dream car and research prices. However, Internet research plays an even greater role when buying a used car. Here, in addition to selecting the right vehicle, the selection of the dealer and pricing are also important. 

Same trends for dealer vehicles

The share of online trading is also growing steadily in the sale of used cars between commercial dealers. While the purchase of dealer vehicles was previously mainly laborious and time-consuming, more and more dealers are using digital B2B marketing to part with grandfather clocks and purchase suitable vehicles. The increased efficiency, compared to traditional auctions, provides a huge cost savings while at the same time lowering the effort for dealers.

What to consider now in automotive retail

To fully exploit the potential of online retailing one must first consider the differences compared to traditional retail. In general, the buying process nowadays goes something like this:

  1. A buyer researches online to make a narrower selection of vehicles which interest him
  2. The buyer then starts looking for a seller. Here, both the product range and the reputation of the dealer play a role
  3. By phone, email, SMS or chat, the buyer tries to find out if a vehicle is available
  4. If the vehicle is available, an appointment is made for a test drive
  5. After the test drive, the terms of the purchase are negotiated
  6. Financing and documentation are handled online
  7. The buyer visits the dealership to sign the contracts and pick up the car

In some cases, the dealer even delivers the vehicle to the buyer's doorstep. Thus, the test drive is the dealership's only point of contact with the customer. Some customers even forgo this last point of contact already. Because of the severely limited touch points with the buyer, it is essential for a dealership to consider an Internet strategy.

Network retail with online retail of your vehicles

Just as car buyers are looking for connected vehicles, they also want a connected retail experience. A connected retail experience seamlessly connects online and offline activities. This plays a role in the purchase process, for example. Buyers want to complete part of the process, such as choosing a financing option, online. Yet, a majority of buyers want to sign the final purchase contract at the dealership. Allowing for this type of connected retail experience puts you ahead of the competition.

Create an informative website

An important factor in website credibility is information content. If you want to gain more attention online and get more leads, try to keep the following things in mind with your website:

  • Calculators to determine trade-in value (purchase screens)
  • Reviews about different makes and models - even those you don't currently sell.
  • Videos showing the interior and exterior of the vehicles you have for sale
  • Guides about the financing process.

So the goal of your website is to be a resource for online car buyers, not just a marketing platform.

Accurate specifications of used cars

Detailed condition reports are the key buying criteria for buyers. Accurate specifications of a vehicle are thus more important than reputation and the dealer's experience or price. Buyers mostly find their way to a dealer's website based on the vehicle's inventory. Therefore, it is important to provide a vehicle's specifications truthfully and in full.

Simple procedures for buying and selling dealer vehicles

Car buyers agree that the most annoying part of buying a car is the paperwork. CarOnSale users also agree that the saved effort with paperwork is a huge benefit. So sit down with your accounting department to find out where you can simplify the process. For example, are there forms which you can make available to customers online?

Adapt your website for mobile devices

There are two very good reasons why your website should be as "mobile-friendly", i.e. well aligned for mobile devices, as possible:

1.) Google rates your website "mobile first". This means that the mobile version of your website is used to determine where your website appears in search results. 

2.) Every year, more people are using mobile devices to research cars.

Well over half of people are using mobile devices to learn about vehicles, while desktop usage has declined slightly. This trend is in line with today's everyday life, people are spending more and more time on their mobile devices. Use this development to your advantage by gearing your website towards mobile devices. This way you increase the user-friendliness.

Communicate via email and online chat

Align your communication to the Internet as well and offer your customers the possibility to reach you via email or chat. For perfect communication on the Internet, it is very important to respond quickly to incoming requests. Many mail programs offer to automatically send a confirmation of receipt to the customer. This reinforces the professional impression with the customer.

The use of online chat functions has also increased significantly in recent years. An online chat can be used to answer a buyer's questions in real time while gathering additional information about what the buyer wants.

Building a good reputation with online reviews

Trust is a big factor when buying online. This is especially true for high-priced goods thus including cars. Buyers use online reviews to determine how trustworthy an online retailer is before they decide to buy. It is therefore very important to get a lot of authentic positive reviews. If someone does leave a negative review, it's helpful if you respond immediately. Use the response to apologize for the bad experience and offer pragmatic solutions. Often, customers are serious about addressing their issues. Try to put yourself in the customer's shoes and offer customized solutions. This helps put the impact of a negative review into perspective.

Have an active social media presence

Increasing numbers of online car buyers are using social media sites during the car buying process. While only 2% of new car shoppers use social media to learn about a vehicle, 10% use it to make a final decision about the vehicle they want to buy. As an online dealer, you can use your social media presence to promote special offers, showcase vehicles, and connect with car shoppers approaching the final buying stage.

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What a car dealer must consider online

No matter what portion of the buying process is handled online, there will always be a need for salespeople to assist customers with their purchases. However, the role of a salesperson differs greatly between brick-and-mortar retail and online sales. A successful salesperson in brick-and-mortar retail is not necessarily a good salesperson in online retail. 

Use data specifically to increase your sales success

To be a salesperson in online auto retail is not easy. There is a lot of data which needs to be used ideally for short and long term success. Coupled with the qualities of a traditional salesperson such as good communication skills and people skills, they can be used to advise the modern car buyer.

Understanding the internet car buyer

Good salespeople in the online car trade understand their new role as well as their target group, online car buyers. These have already researched on the Internet, have already decided on certain models, have gathered initial information and are likely to be interested in a test drive relatively quickly. What is important to online car buyers above all is a simple transaction, time savings and good value for money. 

Provide detailed information

As is usual on the Internet, the online car buyer expects the car dealer to provide information free of charge. Be sure to provide as much detail as possible about pricing, vehicle condition, and things to know about the model 

Know your inventory inside and out

Online car buyers are better informed than most consumers have been in the past. Therefore, make sure you know their inventory to avoid embarrassing situations where the buyer informs you of the details of one of your vehicles. If you have hundreds or thousands of vehicles in your inventory, it can seem overwhelming at first. Start by learning the essential information about the best-selling models. Pick a new vehicle to study each day, and you'll be able to cover much of the inventory in no time.

Communicating with Customers - Be Quick

Online car shoppers expect a quick follow-up when they contact you. Remember, online shopping is about convenience and easy access to information. If you miss a call, return the call within a few hours. Respond to emails within the same time frame.

Use software, called CRM systems, that ensures each lead is followed up multiple times if you are unsuccessful on the first follow-up. Every sales person with customer contact should know the answers to the most important questions and which contact person to inform for which issues. That way, you can ensure seamless communication with customers.

Be up to date

To be ideally responsive to customers, you need to be as tech-savvy as your buyers. So, you need to know how to use the latest car finance calculators, car review sites, social media sites, etc. That way, you can help your customers use them and integrate your services into their use.

Minimize Hurdles

One of the biggest hurdles in online car sales is dealerships that don't understand that customers don't visit the dealership just to get information. The most important reason to visit a dealership in person is to test drive a car. Make sure potential new customers know how to schedule test drives with you. The customer should have a contact at the dealership after booking, even if they booked the test drive online. If this is not feasible in your dealership, make sure that the handover is clearly communicated between employees and that the relevant employees are informed internally. In practice, it happens too often that customers book a test drive online and no one in the branch knows about it. Have full control over the organization of the test drive and communicate this to your customer accordingly. That way, every potential customer feels taken seriously and doesn't feel like they're wasting time on a test drive.

Many industry experts predict that online car buying will overtake the traditional process in the coming years. Regardless of how consumers purchase their vehicles in the near future, take online sales seriously today to realize your full potential.