Why The Auto Industry Won’t Stay Digital-First in a Post-Pandemic World

Share this post

By Ed Silhan, S4M, Chief Revenue Officer, N.A.

Pandemic driven shelter-in-place orders and lockdowns have impacted the way consumers shop regardless of the item or sector. With nonessential stores still closed in parts of the U.S., many people have slowly learned to adjust to new methods of shopping and dining out while adapting to unprecedented wait periods for personal services like salons and barbershops.

But I’d argue that no industry has had to pivot or adapt as greatly as the automotive industry. A sales funnel that typically always ends with that showroom visit and in-store purchase has been reshaped to keep consumers engaged and informed on products that are rarely ever purchased without being seen and tested in-person.

The global pandemic has sparked a wave of innovation in how automakers and dealers interact with car buyers as virtual showrooms and other digital forms of engagement have come to the fore.  This trend has been accompanied by a surge in the adoption of online car purchase facilitator companies like Carvana.

As evidenced in this article published earlier this summer, the car buying experience has seen a monumental shift. Big car brands have moved to offer 360-degree digital car viewings, discussions with sales team members via video software, and no contact buying.

In another published report, the General Motors CEO shared that 750 of its dealers had signed up for its “Shop Click Drive” e-commerce system since the start of the COVID-19 pandemic in the U.S., and by the end of May, 85% of its dealers were using it.

However, the Fall months usually mean that brands start to release their latest models for the year. And as communities and businesses continue to execute some form of reopening with people craving normalcy more than ever, does this mean that people will revert back to the old approach of car buying?

Some customers are still saying that even with the convenience, they would not make a car purchase entirely online if they didn’t have to.  Shoppers are inherently hesitant in making such large purchases without seeing or experiencing the product in person first.

The numbers back this up. According to data from Unacast, the average foot traffic per venue to U.S. auto dealerships and car rental companies is only down 5% over the same period compared to 2019. Since February 2020, there has been a flat trend of -3% foot traffic with downward momentum.

This highlights the notion that for big-ticket items, consumers want to have a full experience before putting down that investment, which leads me to believe that for a car purchase, once showrooms are back and fully running, people are going to return in-person in order to make the transaction.

Drive-to-store and location-based advertising will be a key tactic in order to get these consumers back into dealerships.

Here are a few things that you should consider when getting ready to get people back into  your stores:

  • Use location targeting to identify shoppers who are near your store to enhance purchase consideration for your brand.
  • Mobile is the key channel to reach consumers and should be reinforced during this time.
  • Dynamic content optimization allows you to show users the nearest location, custom offers, opening times, and available stock.
  • Use creatives that can showcase opening-times so your customers can choose less-busy times of the day to visit.
  • Leverage competitive conquesting to attract consumers, who are near competitor dealerships or users that are interested in similar type models
  • Drive in-market automotive buyers to your site as a way to familiarize them with your products before going in-store to purchase

While the car buying process has been innovated by necessity, the fundamental way that consumers purchase auto vehicles will most likely return to its pre-COVID nature, meaning that in-market for a car will ultimately end up making the final buying decision in-person at their local dealership.

Share this post
No Comments Yet

Leave a Reply

Your email address will not be published.