How to Sell
Car Dealers Shift to Online Sales Amid Pandemic
Amid the ongoing pandemic, car dealerships across the United States have been compelled to transition to online sales platforms, disrupting a business model that traditionally relied heavily on in-person transactions. The shift comes as a response to both government-imposed restrictions and changing consumer preferences, marking a significant transformation in the automotive sales industry.
Transition from Showrooms to Screens
The COVID-19 pandemic has forced car dealerships to rethink their sales strategies, as traditional face-to-face interactions in showrooms have been curtailed. Dealers are now increasingly embracing digital platforms to facilitate sales. This move was spurred by social distancing measures and stay-at-home orders, such as the one extended by Michigan Governor Gretchen Whitmer, which limited dealerships to service, repairs, and online sales only.
General Motors has been at the forefront of this transition, reporting that 750 of its dealers have enrolled in e-commerce systems. This represents 85% of its dealership network in the United States. Such adaptations have been crucial, as in-person dealership visits have become less feasible under current health guidelines.
In Michigan, for example, dealerships have had to pivot quickly to prepare for online sales deliveries. This requires not only logistical adjustments but also changes in legal frameworks, particularly concerning the necessity for physical signatures, which are a staple in traditional car purchases.
Online Platforms: The New Dealership Frontline
The pandemic has accelerated the adoption of online sales platforms by car dealers, with an estimated 80% to 90% of new car dealers in the U.S. now equipped with e-commerce capabilities. This shift is in response to a growing consumer preference for convenience and speed — two factors that have historically been pain points in the car-buying process.
Customers have long expressed frustration over the time-consuming nature of purchasing a vehicle, which can take up to three hours at a dealership. Online platforms offer a solution by enabling consumers to conduct thorough research from home, making them more informed and allowing them to expedite the buying process.
Dealerships such as those under the LaFontaine Automotive Group, which handles 18 brands in southeast Michigan, are adapting by offering virtual interactions and scheduling online test drives. These efforts are aimed at meeting the demand for no-contact transactions, which have become increasingly important to consumers during the pandemic.
Dealerships Innovate to Meet Consumer Expectations
The shift to online sales is not just about adapting to restrictions but also about addressing consumer expectations. Shoppers today are more informed than ever, having conducted extensive online research before engaging with a dealership. This trend has necessitated a change in how dealers interact with potential buyers, focusing more on efficient and time-saving interactions.
As noted by industry experts, the biggest frustration for consumers has been the amount of time spent at a dealership, which they wish to reduce. By moving parts of the sales process online, dealers can provide a more streamlined experience that meets modern consumer demands for convenience.
Ricart's dealerships, for example, have seen a doubling of their online deals in just six weeks, illustrating the effectiveness of digital channels in capturing consumer interest and facilitating sales.
Leveraging New Tools and Services
To support this rapid transition, companies like Autotrader have launched services such as Dealer Home Services. These platforms are designed to help dealers offer enhanced online experiences, including virtual test drives and home delivery options, which cater to the growing need for contactless interactions.
Dealers are not only investing in technology but also retraining staff to engage with customers in new ways. This includes learning to conduct transactions remotely and offering support through digital channels, as traditional showroom tactics become less relevant.
The pandemic has undeniably accelerated the digital transformation of the automotive sales industry, pushing car dealers to innovate and adapt in ways that seemed distant before the crisis. As consumers continue to prioritize safety and convenience, the trend towards online car sales is likely to persist, reshaping the future of automotive retail.