The Truth About Online Car Buying: How Dealerships Can Compete
Is online car buying the future? Learn how dealerships can compete with digital trends and win customers who still want a personalized experience.
Here’s what you’ll find in this article:
1. Enhance the Online Experience
2. Offer a Hybrid Buying Model
3. Prioritize Customer Service and Personalization
4. Compete on Trust and Transparency
5. Leverage Technology to Improve Efficiency
6. Consider Your Online Persona
7. Build Relationships That Last
The Future: Blending Digital and Traditional Sales
Online car buying has surged in popularity. At one time, customers would go on lot tours, visiting a handful of dealerships to check pricing and get a feel for their stock. Nowadays, the vast majority of the research is done online, offering consumers the convenience of browsing, financing, and even purchasing vehicles from the comfort of their homes.
Does this mean traditional dealerships are becoming obsolete? Not in the least, but there are steps needed to take to remain relevant. While digital trends have reshaped the automotive industry, and customers only visit an average of 1.9 dealerships before making a purchase, there are strategic ways for dealerships to stay competitive and win customers who still want a personalized experience.
According to Porch Group Media’s Article, 90% of Car Shoppers Prefer a Dealership Where They Can Start the Buying Process Online
The Rise of Online Car Buying
The increase in online buying trends is undeniable. Platforms like Carvana, Vroom, and Tesla’s direct-to-consumer model have made purchasing a vehicle as easy as clicking a button. Buyers can compare prices, read reviews, and complete financing applications without setting foot in a dealership. For some, the lack of high-pressure sales tactics is a major advantage.
However, online car buying has drawbacks. Customers often face challenges such as limited test-driving opportunities, concerns about vehicle quality, and the absence of in-person assistance when navigating financing options. This allows traditional dealerships to leverage their strengths.
How Dealerships Can Compete
1. Enhance the Online Experience
While dealerships may not be able to fully replicate the ease of online-only platforms, they can improve their digital presence. A user-friendly website with transparent pricing, detailed vehicle descriptions, virtual walkarounds, and live chat support can bridge the gap between online browsing and in-person buying.
The first step is ensuring your online presence is informative, attractive, and succinct. You need a website that packages a ton of easy-to-access information. You must also transition smoothly from your online presence to what your people see on the showroom floor.
73% of all internet users confirm they use social networking sites when car shopping.
Go where the shoppers are. It’s important to meet shoppers online with helpful and meaningful content to build rapport. To gain trust from consumers, be sure to share with them on popular platforms, maintain a steady presence, and interact regularly, including in the social media space.
2. Offer a Hybrid Buying Model
Customers appreciate flexibility. Dealerships can provide a seamless shopping experience by integrating online and offline services. Options like online financing pre-approval, at-home test drives, and digital paperwork submission can enhance customer convenience while still allowing for personalized interactions.
60% of all automotive searches are conducted on mobile devices, and some top mobile searches are related to dealerships.
There are ways to make the process easier for shoppers and earn shopper loyalty. You can consider providing the ability to complete preliminary paperwork online or even credit pre-approvals to save time. Get creative and think of all the ways—large and small—your dealership might be able to offer conveniences throughout the car-buying process.
3. Prioritize Customer Service and Personalization
When consumers’ shopping experiences are personalized, you’re 40% more likely to get a purchase.
4. Compete on Trust and Transparency
Today’s shoppers are accustomed to having information at their fingertips. Smartphones make it possible to fact-check almost anything anytime, and consumers have no qualms about comparison shopping on your lot. Take transparency seriously. You’ll earn the trust of more shoppers by being forthcoming with information.
Many car buyers hesitate to buy a car online due to concerns about hidden fees, misleading listings, or quality issues. Consumers want the ability to trust where their information is going. Dealerships can compete with online retailers by building trust and being upfront about pricing, offering certified pre-owned options with warranties, and providing detailed vehicle history reports—in person and online. It’s important to offer quick explanations on your online platforms that show how you plan to use the information you’re asking for.
Over 50% of consumers worry about how their information is used on a business website.
Whether you’re working on offering online transparency or more accurate in-store information, customers will appreciate an up-front, honest approach that gives them early access to the information they need when making a large purchase. Ensure your dealership keeps its word by auditing your processes and looking for ways you can continuously improve to meet and exceed customer expectations. Word spreads quickly, especially with the help of social media, and you want to be sure customers are talking about the various ways your dealership keeps its promises and meets the needs of shoppers.
5. Leverage Technology to Improve Efficiency
Incorporating AI-driven tools, automated appointment scheduling, and digital trade-in evaluations can streamline operations and make the buying process smoother for customers. Investing in a robust CRM like AutoAlert CXM ensures efficient follow-ups and better customer engagement. Read more about how CRM helps dealerships compete with online sales.
67% of consumers move between devices while online shopping.
It is important to consider the technology your dealership uses and the personal devices your customers use to shop. Customers use several types of technology to interact, research, and purchase. Therefore, it’s key for your dealership to ensure that its website, inventory, and overall online presence are available and viewable across all devices.
Two out of three smartphone users say a company with a mobile-friendly site makes them more likely to buy their product or service.
Because location is a major factor for most shoppers, geographical services are worth considering for your online tech stack. Most consumers are willing to share their location to receive more relevant content, and 74% of U.S. smartphone users use location-based services. If your dealership has an online presence and is appealing to the community, consumers who use location-based services are much more likely to pursue their options with your dealership.
6. Consider Your Online Persona
Start learning what customers want by participating actively on social media. Dedicate time to creating a presence on social networks like Facebook and Instagram. Also, do your research. Search industry keywords, your brand, competitors, and anything related to your dealership in the marketplace to better understand what your customers are interested in and what topics your content should include.
You’ll gain more online followers by contributing meaningful content that entertains, educates, and informs. This could include social posts, photos, videos, useful blogs, and highlights of your dealership culture. However, this content should not be focused on trying to convince online followers to buy, which may be tough for those who are hard-wired to sell. Yet, by building your online audience, you’ll build trust, bringing more customers to your lot in the long run.
It’s important to monitor reviews, respond to them, and provide the best customer experience possible. An overwhelming 93% of consumers say their purchase decisions are directly influenced by others’ online reviews. So, if you run across an unhappy customer or a less-than-satisfactory review, reach out and see what your dealership can do to change the situation.
7. Build Relationships That Last
Remember, you are creating an online community. Much like the community that surrounds your brick-and-mortar store, your online community looks to you to provide the information and insights they need. That doesn’t change with the influence of online car-buying—it means that you have an opportunity to broaden your community through engaging customers online just as much as you would in person.
Responding to online feedback quickly and authentically is an easy way to strengthen ties with your consumers. Be ready to react to positive and negative feedback in a proactive, professional way that lets shoppers know you’re capable of taking care of customers and ensuring their ultimate satisfaction. This will go a long way toward showing potential customers your dedication to providing the best possible dealership experience.
Show appreciation for your customers and let them know how valuable their input and feedback are. This will create an atmosphere where more people want to interact and share with you, ensuring you grow your online audience and reach even more potential customers.
The Future: Blending Digital and Traditional Sales
The future of online car buying isn’t just choosing between online or in-person sales—it’s about merging the best of both worlds. If you can utilize the tools available and focus on offering convenience, transparency, connection, and personalized customer service, you will connect with customers, gain more traffic to your store, and procure advocates for your dealership.
Dealerships that adapt to changing consumer expectations will remain an essential part of the automotive industry, continue to compete with online platforms, and win over car buyers now and well into the future.
Consumers’ relationships with brands are more personal than ever before. Almost 70% of consumers agree that shopping in today’s market is less about the products and more about their feelings about the product. One of the biggest advantages dealerships have over online platforms is the ability to offer personalized customer service. Sales teams can build relationships, understand unique needs, and provide tailored recommendations—something automated systems simply cannot replicate. A strong emphasis on customer satisfaction and follow-up support can set a dealership apart.
Interacting with your consumers is high on the list of things consumers want brands to do to create a superior dealership customer experience. It is important to respond to your customers’ reviews and reach out to consumers who are reaching out to you. It’s simple to offer a quick acknowledgment via a “like” on social media platforms or a short reply.