Under Covid-19 dealers embraced the online ‘gun’

For some years now, customers seem more ready for online purchase than OEMs and dealers are for online sales, but the gap is near to being closed.

A survey made in Italy in 2019 pre Covid [by Quintegia] showed that around one third of Italian drivers would have evaluated the opportunity to buy a car completely online. This doesn’t mean that customers don’t want any physical touchpoint, but that, when the moment is right, they are interested in using the online channel just as they do already for many other goods and services.

Under the Covid-19 emergency, further surveys made in the US [Google] and in the UK [JudgeService] have highlighted that around 20% of customers would prefer to buy a car online (with home delivery or collection at a safe outlet). In this case we are not talking about a possible interest but about a hypothetical preference, enforced by the current crisis which has accelerated an existing trend. During lockdown, many dealers across the world have implemented a digital channel to allow customers buy cars completely online due to the impossibility of selling cars in traditional showrooms.

There have been many interesting experiences across markets, showing some peculiarities. In Scotland, in April, Peter Vardy sold around one third of cars completely online (about 400 units) thanks to a very easy process which included instant trade-in evaluation and the possibility to choose between almost 30 financial providers, highlighting a penetration of finance services higher than traditional showroom sales. Last year, i.e. pre Covid-19, CEO Peter Vardy said that by 2023 around 50% of their sales will come from the online channel, meaning that the main steps of negotiation will happen online, with home delivery or collection at one of their sites.

Another interesting example comes from the US, where Eastern Automotive Group, one of the largest used car superstores, adopted a new strategy during lockdown after 8 sites had been closed and the only sales channel was their website. Their Business Development Centre has been integrated with traditional salesmen, in order to be able to offer a fully online sales process, and the physical outlets were only used for car collection whilst obviously respecting all safety requirements. Also here, the penetration of finance services has been higher than traditional sales, Net Promotor Score improved and the salesmen were more effective and achieved more than 30 sales per month, compared to a norm of around 15-16. These results were assisted by very quick and efficient processes and to a very detailed analysis of the online customer journey, focusing on the activity made both before visiting their website and when actually on their website.

In less advanced markets, there are some effective examples, including one from Italy, where Authos, a large Ford dealer based in Turin, implemented an online channel a few years ago, and in April, during the strict lockdown, they sold all cars (150 new and used cars) completely online with home delivery. In order to be effective, they trained the salesmen (almost all of them under 30 years old) to properly manage the needs of online customers.  On average it only took one hour to inform the customer about the car’s features, using video-call to show the different models. In addition, bi-monthly they organised special live streaming from a simplified TV studio, to highlight a specific model with the objective of engaging better with potential customers.

There are many other similar examples in all markets, but many dealers didn’t exploit effectively this situation to implement new strategies and to learn how to use these tools to give customers the possibility to manage more steps online. Surely after the Covid experience, most sales will still be ‘closed’ in the showroom, but customers will do more steps of their journey online, maybe instead of visiting 2-3 dealers, they will have 2-3 (or more) video-chats sitting comfortably on their sofa, before visiting only one dealer? Dealers now have the opportunity to learn and test new tools, and if they want to stay key to the sales process in the ‘new’ normal … the time to invest is now!