The pandemic did not end traditional car buying, but made it clear that dealers should prepare for a new way of selling
COVID-19 was supposed to transform the traditionally in-person, time-consuming, analog, and often unpleasant process of car buying.
Although there was innovation and some consumers bought cars almost entirely online, the dealer model is still the primary way to get a new set of wheels.
As the US market recovers and a second or third wave of the pandemic looms, the old way of doing business could be put to the test again.
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At a time when you can buy just about anything online with one click, buying a car is still old-school challenging.
Before the coronavirus pandemic, most customers who wanted to buy or lease a new vehicle had to visit a dealership, take a test drive, sit down with a salesperson to reach an agreement, and then spend hours with a finance professional. to solve a problem. car loan.
The process has earned the car-buying experience a bad name and has forced many customers, especially young people, to seek an alternative.
When COVID-19 made in-person meetings a health hazard, many assumed change was on the way. For some buyers, it came.
"I signed a few things and left" Distributors traditionally wanted customers to visit them in person. Bill Pugliano / Getty Images
In Oregon, Jeffrey Cecchini almost got into a new Honda CR-V crossover SUV without visiting the dealership. In fact, his dealership was ready to deliver the vehicle to Cecchini's home when the 37-year-old commercial insurance salesman offered to come in person. He didn't have to stay long.
"I signed a few things and left," Cecchini said. "I think it will change the sales process forever."
That kind of interaction was rare before this year.
But when the coronavirus pandemic hit earlier in the year, distributors had to fight back as US state governments shut down retail operations in person. (For the most part, they kept their service departments running, as they were considered essential services. Emergency workers and medical professionals, after all, need their vehicles running.) That meant going online.
"It took a long time for distributors to embrace digital retail before COVID, but the pandemic forced an evolution that was ready from a technical point of view, even when it was being avoided from a philosophical point of view," said Karl Brauer, executive analyst. from iSeeCars.Com.
"When the digital retail option suddenly became the only retail option, it was quickly embraced by distributors and I think most of them were surprised at how well it worked," Brauer said. "Getting distributors to use digital retail starts with the awareness that, yes, it is possible, and yes, it may be a better option in certain circumstances."
Back to the Future Amazon's fast delivery and fluid shopping tools have changed shopping for a new generation. John Keeble / Getty Images
However, there is still some debate about how much the old ways might change.
"Our data shows that the majority of customers still go to a dealership to buy a car," said Jeremy Anspach, CEO of PureCars, a marketing strategy and information resource for dealerships.
That's partly because these are not particularly risky places to visit. "The dealerships don't have a high density of buyers," Anspach said. "And they are taking the pandemic very seriously, following the guidelines of the Centers for Disease Control and spending a lot of money cleaning up, several times a day."
The next few months could be an interesting test of how much consumers might demand a new way of buying cars, as dealerships push for a return to a more or less "normal" approach, with just a lot of face masks and hand sanitizer. , and home deliveries of vehicles. (Test drives, long a reason to head to the dealership, also hit customer driveways, with dealers leaving vehicles disinfected.)
With the US market recovering more robustly than anticipated (another near-record year for sales is probably not expected, but a solid total of 16 million for new cars and light trucks), fears now, an increase in infections could send much of the country back into lockdown.
"If there's one word to describe America's auto business, it might as well be tough," argued analysts at Cox Automotive in a recent summary of third-quarter sales data.
"After a pretty terrible Q2, when much of the industry was shut down and sales volume had fallen by an alarming amount, car sales came back strong in Q3 ... Car dealers feel pretty confident about that the business will continue. "
That suggests consumers could end up back at the dealership, spending entire weekends working on getting a new family car.
One flavor becomes a complete meal A new wave of lockdown could test the dealership model one more time.
Maybe not. After all, shoppers have tried hassle-free online transactions, and automakers spent a decent amount of time during the first few months of the outbreak promotes a different way of buying vehicles.
"A customer calls and says, 'I want that Toyota Camry, but I don't want to go to the dealership,' and now the dealership won't hang up," Anspach said. "The consumer is going to demand a clean, fast and effortless transaction," he added.
Brauer indicated that the flavor could become more than one meal.
"Many more car buyers have experienced digital retailing today than six months ago," he said. "That means more consumer demand, as well as greater awareness from distributors. Some percentage of those shoppers are likely to demand this retail process in the future, which means the genie is already somewhat out of the bottle. ".
It might take a while, but buying cars could be on the verge of overdue reinvention.
"The transition process took a big step in 2020," Brauer said. "And with younger consumers, raised on Amazon, entering the era of car buying as traditional car buyers leave the market, I see that digital retail will become the dominant system for the next 10 years. ".
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