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Fuel for Thought: Car Buying Convenience Factor
Automotive Monthly Newsletter and Podcast
This month's theme: Car Buying Convenience Factor
Our August podcast features special guest, Giancarlo Montenegro, Director of Social at Reunion Marketing.
Car Buying Convenience Factor
64% of US car shoppers cite convenience as the primary reason for purchasing the vehicle online*
Convenience. It is an important word that gets a lot of attention in automotive sales. Entire networks of dealerships and supply chains have been created to make the car buying process as convenient as possible for customers—geographically at least. The impact of COVID-19 has changed this.
"Nearly two of every three vehicles purchased online in 2020 cited convenience as the primary reason," according to the 2020 Vehicle Buyer Journey Study conducted by IHS Markit. With millennials being two times more likely to buy a car online than older shoppers, the online convenience scores will only rise.
Improve targeting … simplify complexity … sell more
Prospecting new customers is the lifeblood for dealerships in the hypercompetitive auto retail space. The current semiconductor inventory challenges affecting supply—and now brand loyalty—further compound this. Brand loyalty has eroded as customers struggle to find vehicles. A 2% loyalty drop from first quarter 2020 to first quarter 2021 equates to 166,000 customers now up for grabs. With inventory tight, dealerships need to engage with their customers and entice them to consider different models or encourage service visits for older vehicles. In addition, dealers need to be aggressive in conquesting shoppers who are looking for in-stock vehicles now.
The ability to reach the most relevant consumers with the greatest likelihood to respond to a dealer's ad is more critical than ever.
Consumers, ad tech, and what it means for auto
Technology has empowered consumers to be much more efficient and utilize multi-platforms in their media use. Two out of every three ad dollars spent are now with digital media. Approximately 80% of that digital spending transacts across programmatic channels. Shoppers are harnessing technology and information to be better and more efficiently informed. The car buying process has shrunk, and customers are thrilled.
- 2018: Time in dealership 2 hours 55 minutes. Enjoyment: 60%
- 2020: Time in dealership 2 hours 37 minutes. Enjoyment:74%
- 2021: Time spent online for new-car shopping declines:
Source: Autotrader Car Buyer Journey, March 2021
As online auto buying takes big steps forward, the importance that the last dealership impression provides is diminishing. As a result, dealers need to look further upstream in the digital ecosystem to connect with prospects.
*IHS Markit 2020 Vehicle Buyer Journey Study
**CarGurus 2020 Buyer Insight Report
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- Fuel for Thought: A Rocky Recovery in the Second Year of the Pandemic
- Substantial Internal Cannibalization for Incremental Models
- IAA Mobility 2021: Germany’s new auto show to focus on electric autonomous vehicles and mobility
- Hybrid: Bridge to Electrification – August 2021
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- Brand Loyalty Among US Auto Consumers Drops to Six-Year Low
IHS Markit is excited to attend MOVE this year. As the leading thought leader in automotive mobility, we are keen t… https://t.co/imEluizURo