Does a person who spends less time online shopping for a car go to more dealerships than someone who spends more time online in the car-shopping process? If someone had asked me that a couple of days ago I would have said “yes.” I would have said there is, in fact, an inverse relationship between the number of stores one visits in the real world to the number of virtual stores, shopping centers, opinion sites, blogs, reviews, etc. one visits online. The more you shop and research online, the less footwork you'll do in the physical world.
Paradoxically, people like me who subscribe to this also agree that the online purchase funnel is a contradiction. No, the web doesn't take a car shopper more quickly and efficiently with less physical exercise from the top of a funnel to the bottom. If anything, sad to say, it turns the funnel upside down. Every tried pouring scalding coffee into a thermos with the funnel upside down? If you have, your dermatologist should buy you a car.
That's why all the wishing in the world by digital auto sector operators that dealerships go away forever — that the day should come already when you and I can go to BuyACarHere.com, do the research, the comparisons, see the ads, choose a trim, customize it, modify it, and generally spec out a car, and then actually buy it and then have it delivered from some warehouse, with a Zappos-style return box — won't happen too soon.
Yes, NADA (National Automobile Dealers Association) calls some major legislative shots around franchise laws and the limits of online auto retailing, but that's not what I’m talking about. What really influences dealership activity is the internet’s ability to confuse you, to increase the consideration list. It is so easy to get too much information, to get more confused and distracted in the process, either by tactically brilliant ads and contextual marketing, or real-time deals, and an endless supply of opinions.
Soon, your once-pristine short list of vehicles looks like scribbled pages of tic-tac-toe games played by people on crystal meth.
A couple of days ago, I stumbled onto the J.D. Power 2014 New Autoshopper Study, which looks at how new-vehicle buyers use digital devices and the web before purchase. Auto shoppers, the study found, spend on average nearly 14 hours on the Internet shopping for vehicles prior to purchase. Those who spend 12 hours or more shopping for a car or truck online visit 3.3 dealers (no jokes about the guy with a third of a dealership, please) prior to purchase; those who spend either a moderate 5 to 11 hours or minimal 1 to 4 hours online visit 2.5 and 2.0 dealers.
As Arianne Walker, senior director of automotive media and marketing at JDP, puts it, “There may be a notion in the marketplace that the more auto shoppers use the Internet to determine which vehicle to buy, the fewer dealers they are inclined to shop, yet we see just the opposite.”
Is this good news for dealers, then? Yes and no. The study also finds that shoppers are showrooming in auto showrooms, with over a third of them using either a smartphone or tablet while at a dealership, with pricing the most frequently accessed content, and 84% using the pricing information in the negotiation process.
Walker argues correctly that dealers who don't get up to speed on this will lose the deal. She says dealers need to "accept and embrace this practice as the new status quo and provide complete transparency with price, value and product offering in order to build trust with these savvy new-vehicle shoppers. If not, dealers could lose these customers to the competition.”