May 28
COVID-19 is speeding up dealership digitalisation and the transition into online car sales is no exception. This demonstrates the importance of a painless, simple car buying experience for the industry in general.

Hard times for car dealerships? Find opportunities within the challenges

When CarGurus released their annual One Voice report in 2019, it revealed what car dealers were doing (or planning to do) in order to maintain and improve performance.

Video marketing, online finance completion and search engine marketing were all highlighted as key strategies if dealerships were to remain relevant and capable of attracting the new breed of car buyers.

Now, those findings seem to be rather prophetic.

At the time of writing, the COVID-19 pandemic is having a seismic impact on the automotive industry. In the UK alone, there has been a 97% drop in new car sales due to the closure of dealerships, and even with the lockdown lifting gently across the world, the status quo in automotive retail will never be the same again.

There’s no doubting that this is the hardest of times for the sector, but it’s not the first time. Consumer confidence and car sales had plummeted during the 2008 recession, but picked up impressively in subsequent years, demonstrating once again that the automotive industry can be incredibly resilient.

The way people buy cars will change – but that’s ok

COVID-19 will force dealerships to adopt new in-store policies and meet the demands of a more cautious car buyer, but that isn’t necessarily bad news.

The thought of socially distancing in car dealerships or during test drives might seem counterintuitive to driving good sales numbers, but it’s a reality that needs to be faced.

Consumers are likely to be concerned about social distancing for the foreseeable future, and while that might put a temporary end to the traditional ‘handshake deal’, it will force dealers to adopt new, digital processes that might turn out to be much more efficient.

For instance:

  • Online finance completions. This isn’t new in automotive sales, but it will need to be more widely adopted now. The good news? Online finance completions speed up the process and are likely to improve customer satisfaction.
  • Another marketing tool which has been adopted by many dealerships, video will become more important than ever in a post-COVID-19 world. By creating and sharing videos of new and used car stock, dealerships can increase customer confidence and usher them along the buying journey before they even set foot into the dealership.
  • Online trade-in valuations. Do you really need to undertake detailed reviews of trade-in vehicles before providing a valuation? What if the customer instead sent their own video or used an online portal to detail the car, much like we do when part-exchanging devices such as smartphones?
  • SEM and SEO. Ask yourself: Is your dealership easily discoverable online? Car buyers will now spend even more time researching online before they head to the dealership, which makes search engine marketing (SEM) and local search engine optimisation (SEO) vitally important. This might appear to be another layer of complication, but online strategies will stand out as key drivers for car dealers generating new business and keeping ahead of competition.

Online car sales: an exciting opportunity, available now

COVID-19 is speeding up dealership digitalisation and the transition into online car sales is no exception. The same is true for used cars, as revealed in recent studies. This demonstrates the importance of a painless, simple car buying experience for the industry in general, and it’s now widely accepted that consumer confidence in online car buying is increasing.

This doesn’t mean the end of the dealership experience, but it does highlight the importance of digital presence. By investing in the right technology, dealerships can become masters of their online sales experience.

For some, it might simply be implementing a stock browsing platform from which potential buyers can configure and reserve their car, sign up for a finance deal online, and then move the actual transaction to the dealerships itself. The complete transition however, is envisioned as an entirely digital end-to-end buying experience, akin to e-commerce, with the deal signed online and the vehicle delivered locally. Such a pioneering platform was recently completed in Greece by OneDealer for Kosmocar, the leading VW, Audio and Skoda importer.

Overall, the concept of selling cars online while the dealership is closed is an exciting one and speaks to the new breed of ‘lockdown browsers’ who have surfaced during the pandemic. This demonstrates that, even in the most challenging of times, car buyers are still active, engaged and ready to commit if the dealership offers them an engaging and secure experience from the comfort of their own home.

Final thoughts: new car tech and online sales – it’s happening

Electric cars, connected cars and sustainably powered drivetrains finally present far more opportunities than they do challenges. Combined with the simplicity and comfort and safety of online sales, the benefits for forward-thinking dealerships promoting greener tech can be a real differentiator.

Is your dealership ready for the future?

It’s going to be different, but within the challenges there are some incredibly exciting opportunities for the industry to completely remodel itself.