The automotive industry has evolved rapidly over the past decade.
Due to significant growth in factors like technology, innovation and media, the industry has experienced changes to a customer’s buying journey to such an extent that 59% of car purchasers now spend their time researching online.
In the U.S, vehicle sales are slowing down. Consumers are holding onto their cars for longer and buying less often—an average of 6.5 years today compared to 4.3 years just a decade ago.
For automotive dealers facing these challenges, the goal is to make the digital experience work in harmony with the dealership one.
In this article, we explore 5 key ways digital is transforming the car buying experience.
1. How Consumers Research Cars
The automotive consumer journey is one of the most complex of all industries. Although customers still purchase their vehicles at dealerships, most of the decision-making and influential moments happen beforehand online.
According to Google, 95% of vehicle buyers use digital as a source of information and it takes 65% of buyers just 3 weeks to research online. In fact, twice as many start their research online versus at a dealer.
When car buyers start their research, 6 out of 10 are undecided and open to different model and vehicle options. However, by the time they actually make it to a dealership, they often already know the vehicle they want to purchase.
When it comes to what content they consume, video research is seen as the most popular and effective format for encouraging brand consideration. Views on YouTube of test drives, features, and options, and walk-throughs have doubled in the past year, with 70% of people who used YouTube as part of their car buying process were influenced by what they watched.
Takeaway: The most important thing to bear in mind for automotive dealers is to reach and target customers at this undecided stage before they’ve made their decision or been influenced by another competitor.
A workforce that understands how to use digital marketing channels like paid search (PPC, Google Ads) can help your dealership feature on social media platforms that are frequented by your target audience while concentrating on SEO will help improve search rankings - allowing customers to find you easily.
2. Buyers Don't Start at The Dealership Anymore
When researching, consumers don't look for information on auto brand websites alone, they visit comparison sites to check prices and user reviews before even setting foot inside a dealership.
Year on year, traffic to automotive research sites has increased by 12%, while dealerships have seen a 2% decrease
This rise in popularity of ‘neutral’ information sources demonstrates the significant need for dealerships to provide the necessary information for customers in a seamless and accessible way online, so they don’t have to fish in another pond.
“It’s crucial that automakers make their car information readily available to consumers online beyond just what they offer on their websites.” - Becky Tasker, Manager, Adobe Digital Insights
Takeaway: For auto-dealers, it’s key to consider having a presence on influential and popular third-party websites both on a local and national scale as part of their marketing strategy to remain the number one choice in the buyer's mind throughout the entire customer journey.
3. Technology is Changing the Customer Experience
Video is making the car buyer’s research process much easier while creating an experience that is much more relevant and personalized.
From virtual test drives, 360-degree views of the interior, or exterior walkarounds. 56% of car buyers said they could be convinced to buy a car from a 360-degree video without even having to drive the vehicle.
A perfect example of this is BMW’s video campaign “#BMWSTORIES”. The idea behind this campaign was to showcase their customer's personal stories, and how the BMW brand helped them in through their emotional, real-life journeys.
With 33 videos in total, which have received anywhere from 7K to 14M views on each video. #BMWStories drives, on average, a 5x engagement rate compared to the average automotive brand.
Takeaway: It’s important to give potential buyers visual insights that go beyond an image. Train employees so they can use platforms such as YouTube or Facebook Video to provide detailed demonstrations, displays and even test drives of your vehicles could have a greater influence on a person visiting your dealership.
With the release of virtual and augmented reality, VR is already making waves across industries. But the automotive industry is one step ahead.
Car manufacturers are trying to use both virtual and augmented reality technology to deliver the best vehicle experiences to consumers. According to Digi-Capital, the augmented/virtual reality forecasted revenue is to hit $120 billion by 2020.
Using VR technology and specialized apps, almost every showroom in any dealership can become a virtual reality showroom. Brands like Audi and BMW have already jumped on this phenomena.
Vroom has even created a virtual reality showroom to showcase their available assortment that allows users to view car models from the comfort of their home.
80% of the future purchasing generation will tend to visit stores that offer interactive experiences via AR and VR technologies.
Takeaway: For dealers, investing in VR technology is something to consider. With a VR demo station, dealers can offer customers immersive test-drives which can enhance the customer experience but also help sell more cars to existing customers and drive more referrals.
4. Mobile Plays a Huge Role
More than half of automotive shoppers use a mobile device in their quest for automotive information.
According to the research by Weve Automotive, the mobile journey starts with:
- Awareness: 57% browsed for car inspiration on their mobile
- Consideration: 59% researched and compared prices/specifications on their mobile
- Intent: 61% searched for nearby dealerships, requested brochures, and booked test drives on their mobile
- Purchase: 9% purchased a car on their mobile
- Loyalty: 9% explored aftersales on their mobile
Additionally, 58% of auto shoppers agree that in the future their smartphone is likely to be the only device they will use for vehicle research.
Solution: When it comes to mobile, customers are becoming less tolerant of websites that do not take the smartphone journey into account. To provide the necessary information and customer experience, mobile needs to be accounted for (or even prioritized) in the digital journey.
5. Digital Advertising is on the Rise
When it comes to advertising, automotive competitors are using digital as the number one channel in their marketing campaigns.
Industry experts estimate that the average digital ad spend for automotive will break $14 billion by 2020, representing a 200% increase in just 3 years.
Using a vast range of integrated marketing tools backed by experimentation and innovation, this gives dealers the ability to attract more customers.
Two effective examples include:
Social Media Platforms - It's important to understand where consumers are researching potential vehicles. Social media is an essential tool for any business, but for the automotive industry, it is a chance to target specific buyers based on their research habits. Platforms like Instagram, Twitter and Youtube allow brands to be creatively innovative with their campaigns.
For example, with an average of 34 posts per day and a massive 19.8k engagements per post, Mercedes-Benz recently generated over 424k engagements every 24 hours over the course of a week – more than any of its competitors.
To stand out from the crowd, many of Mercedes’ Facebook posts contain information about its cars’ fuel consumption and CO2 emissions, and their video content often features celebrity drivers which portray a common comedic theme, gaining hundreds of thousands of views.
Stay Integrated and Get Specific - Integration is vital when it comes to digital. The most successful and engaging automotive campaigns succeed because they’re more than just social media campaigns.
For example, Lexus took to social media, specifically, Facebook, to better understand their different consumer segments and, as part of their Beyond Utility campaign, created 1,000 separate Facebook ads targeted at different individual groups of people. By doing this Lexus ensured the ads resonated with end consumers.
This allowed individual consumers to see versions of the ad that would be more likely to entice a purchase. To date, the Lexus NX campaign has reached over 11.2MM unique Facebook users and delivered over 10.8MM video views. With an engagement rate of 26%.
With digital now more of a necessity than a choice, automotive brands and dealerships must commit to introducing and integrating digital technologies and strategies into their business.
The key to embarking on or progressing digital transformation is to have a workforce that understands the fundamentals of digital so they can execute effective marketing campaigns and influence customers through successful social selling techniques.
Ultimately, the goal of digital techniques should be to ensure the buyer journey is interactive, engaging and enjoyable.