Digital Marketing

The impact of digital on the car buying moments of truth

Customers’ expectations are completely changing and highly impacted by internet giants. GAFA (Google, Apple, Facebook, Amazon) and NATU (Netflix, Airbnb, Tesla, Uber) are dominating digital markets and bringing in new models of the economy. Today, we can create a bank account, transfer money, subscribe to an insurance and get quick quotes from our smartphone.

Even if cars are generally bought from traditional brick and mortar dealerships, the pre-buying process is going digital faster than what the industry can deliver. The customer journey can be divided into 5 main steps:

Product search and information gathering

Nowadays, customers have access to big amounts of information on the Internet. According to a Google study, customers make 2.2 visits to dealerships in 2017 vs 2.6 visits in 2010. Also, customers do 1.3 test drives vs 2.6 in 2010. In 2017, 21% buy a new car without a test drive.

This drop of dealerships visits and test drives is explained by the fact the 90% of car buyers do online research, 64% of them start their research without having a clear idea about the model they would like to buy. After creating a selection of interesting car models, 36% watch online videos to narrow down their choices to 2.5 brands.

Price selection

Price is the number one rationale criterion when it comes to buying a (new) car, even for premium brands. According to Google, users who look for a new car add the word “price” to their research 3 times more than “review” and 37 times more than “engine characteristics”. While OEMs (Original Equipment Manufacturer) try to keep this step blurry for customers to drive them to dealerships, 2 buyers out of 3 declare their disappointment about prices and would also like a transparent communication about warranty and maintenance cost.

In order to face lack of information regarding prices, 24% of new cars buyers declare using many sources of information online before visiting dealerships. They use search engines, independent press, banks & insurance websites as well as social media. According to a Capgemini study about online sales, 15% of car buyers are very likely to be influenced by positive comments they find online.

 

Narrowing down choices

Still, at this step, customers would rather use the Internet than going to a dealership. At this point, customers start asking detailed questions regarding space, airbags, quality of materials and technology. According to Google, search requests are very precise. 51% of users look for quality, 46% for space and volume, 41% for exterior design and 35% for driving assistance technology. Customers prefer watching review videos and read ranking and testimonials online before visiting a dealership. This is an important step for OEMs to consider as customers generally only keep 2 choices of car models.

Where to buy?

Now that the customer has a clear idea about the brand and the vehicle, he will look for a dealership to finalize the process. This is an important step for dealerships to consider, as more than 50% of car buyers finalize the purchase at the first dealer they visit. To choose the dealer, 69% of buyers will look for the real price, 40% for car pictures and 22% for stock availability. Also, customers will consider localization, opening hours and reviews about the dealership. It is clear that customers won’t go for a physical visit until they are sure about the dealership choice even though only 8% of customers declare they find enough information about the dealership, due to the lack of digital presence.

Purchase

At this point, customers go to dealerships as expert seeking additional technical information, a test drive, and to see the car in real life. Customers are looking to further their buying experience a not have sale pressure from the salesman, only 24% of buyers declare looking for personal advice while more than 42% would like to finalize the process online. Customers would prefer to go to dealerships as showrooms only with technical experts rather than salesmen. The Integration of virtual reality to have more technical information is essential for better convenience and for giving customers more control over their purchase process.

 

The upcoming years will be challenging for the automotive industry. As customers are in need of a smoother and paperless experience, car makers still struggle to meet customers’ expectations. Due to old systems background and complex processes car makers must deal with front digitalization but most importantly internal transformation. Customers appetite for online sales and the business opportunities digital & data provide are pushing car makers to accelerate their transformation to deliver a better experience and increase their market share.

 

Sources:

https://www.thinkwithgoogle.com/marketing-resources/micro-moments/five-auto-shopping-moments-every-brand-must-own/

 

About the author

Mehdi KAIDI

Mehdi KAIDI