The current pandemic has shown automotive dealers the importance of acquiring digital systems and practices – now and for the foreseeable future –  in order to adapt to consumers’ evolving shopping trends and overall sentiment toward purchases made inside traditional dealerships. The bright side to this shift is that the auto industry has been given an opportunity to improve its digital marketing solutions for the long-term. Thus far, many auto dealers have been effective in transitioning, but should still be aware of the evolving trends and expectations throughout the industry.

“With showrooms closed or operating under strict limitations, dealers are highly motivated to adopt new technologies that enable digital transformation, hyper-targeted digital marketing and remote selling,” noted a recent AutoLeadStar report.

The Emergence Of A New Car Buyer Persona

The drastic shift in consumer shopping behavior is apparent throughout the auto industry, resulting in newfound demands and expectations from shoppers. While the idea of a digital experience is not an entirely new concept for auto dealers, the share of consumers relying on a fully online process for car buying is something the auto industry is still grappling with. According to a recent Cars.com report, 71% of consumers now wish to complete a portion (but preferably all) of their car purchases online.

Services such as at-home vehicle pickup and delivery are also looped into the seamless, hands-off automotive shopping experience consumers are demanding, with 30% of consumers expecting dealerships to provide test driving at home and 31% seeking auto dealerships that offer at-home car delivery. Luckily, for consumers, auto dealers are listening. The amount of dealerships offering delivery is rising dramatically since the start of the pandemic, and the likelihood of this newfound digital car sales process becoming the norm seems likely.

Auto Dealers Must Continue Investing In Digital Tools & Processes

As the traditional showroom remains quiet for many auto dealers, technology is likely to become a prominent part of the modern-day buying and selling process. (Just 54% of auto dealers provided digital retailing tools prior to COVID-19.) According to AutoLeadStar’s report, a growing number of dealerships are seeking out new digital tools to “target high-intent shoppers.” AI-based tools and smart marketing platforms have become essential. In fact, a recent in study from Cars.com revealed “AI chatbots were widely deployed at the beginning of the pandemic to support digital sales.”

While consumer interest has remained steady throughout the auto industry, many consumers are still wary of venturing into physical showrooms. Auto dealers should expect continued demand for real-time communications options and be proactive in their search for advanced digital solutions that they can incorporate into their selling processes. The ability to accelerate digital adoption as a response to consumers’ shifting needs is vital for car dealerships, and the incorporation of advanced digital systems can provide a more efficient and convenient auto buying process for dealers and consumers alike.

Online Marketplaces Could Take On A Larger Role As Consumers Rely On Digital Capabilities

During the pandemic specifically, many car dealers have a newfound appreciation for online automotive marketplaces and the beneficial role they can play in supporting today’s auto buying process, as they provide a much more convenient option for consumers than the traditional dealership-to-dealership car shopping tour. Several online car marketplaces have experienced drastic growth as of late and have made strategic investments to improve their digital capabilities in order to remain successful in the long-term.

One of the leading online marketplaces, Cars.com, experienced a 250% spike in auto dealer inquiries through its “digital retailing solution,” Online Shopper. According to Cars.com, sales rose 63% by May of this year, compared to pre-pandemic times. ACV Auctions, on the other hand, recently shared it reached its highest sales month ever between May and June of this year, crediting the success to ACV’s adoption of digital tools and processes, which have helped auto dealers across the board. “It’s now apparent that the shift to digital is imperative to facilitate long-term growth,” said ACV Auctions CEO George Chamoun.

Fellow automotive marketplace, Auto Trader, recently broadened its relationship with Google, tapping into its “Looker for Google Cloud Platform,” which allows businesses to analyze and dive deeper into consumer and market insights. By accessing Looker, Auto Trader will be able to make vast improvements to its overall business and customer experience. “A fundamental shift in the process of buying and selling cars driven by technology, means the volume and the variety of data that we’re collecting is ever-increasing,” said Edward Kent, Principal Developer, Data Engineering at Auto Trader. “With Looker, we can better manage this large volume of data and ensure that our employees and customers have access to the trusted metrics they need to make decisions and ultimately, deliver a superior buying experience for our end users.”

What Does The Future Of The Automotive Industry Look Like?

According to CarGurus, throughout the pandemic, 15-20% of car sales were completed through an entirely online buying process. And while many shelter-in-place restrictions have lifted, 90% of all car shopping still begins online. CarGurus notes that by 2025, 50% of used car sales, specifically, will take place entirely online.

A recent report from IBM showed that 50% of automotive executives believe that, in order to win in the auto industry over the next decade, professionals within the industry must “reinvent their organizations with digital technologies, supported by data,” with 83% of respondents stating they “understand the strategic value of data in their industry.”

The world has watched as grocery stores transitioned to online ordering and delivery systems, schools adjusted to virtual classrooms and the healthcare system embraced the benefits of telemedicine on a much grander scale. The automotive industry is no different. For auto dealers navigating this pandemic and the future of the market, the shift to a digital-first business model is a must, as these digital-centric trends will continue to transform the way auto dealers market and engage consumers.

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