CARY, N.C. –
Sure, consumers are not going to dealership showrooms right now.
But it doesn’t mean they’ve stopped shopping or looking at vehicle inventory.
Far from it.
According to data from Cars.com, “tens of millions” of shoppers are still involved in the car-buying process — they’re just doing it online and looking for other avenues to transact or work with dealers besides in-store visits, as cleanliness concerns and stay-at-home mandates mount.
Likewise, Black Book is hearing “good reports” from its dealer contacts on transitioning to a digital retail operation, says Laura Wehunt, vice president of automotive valuations.
“They’re getting actually a lot of leads coming through right now,” Wehunt said in a phone interview earlier this week. “Even if their sales team can’t be physically at their dealerships, they are fielding those calls from home and having a lot of success there, preparing to make sales — and then in some cases, actually being able to make the sale and then deliver to their home.”
In fact, Cars.com said that based on its internal Lot Insights data from March 16-24, close to 80% of its visitors have “high intent to purchase.”
Similarly, Market Update data provided by LotLinx also offers some encouraging signs.
Looking at new- and used-car data among more than 14,000 dealers, sales were off 47.5% from February, as of end of day Monday, and shopper fell 14.6%. However, shopper engagement was up 12.1%.
The online shopping data comes from LotLinx’s proprietary market intelligence platform; the company is able to utilize multiple avenues to caption more than 100 million daily shopping interactions.
In its comprehensive, 61-page COVID-19 Market Analysis Report, LotLinx urges dealers to go digital.
“Consumers are still shopping for cars, and right now, they’re online more than ever. Businesses that stop advertising in times of crisis are likely to lose share of mind and market,” the company said in the report. “Stay present, but acknowledge the issue at hand.”
Going back to the Cars.com data, consumers have been looking to take care of more of the car-buying steps online in recent weeks, including tasks like price negotiation (48% want to do this online) and financing (42%), according to Cars.com internal data from March 16-24.
“Though showroom visits are declining nationwide, the auto industry has the technology and digital tools available to meet shoppers where they are,” CARS Inc. chief executive officer Alex Vetter said in a news release.
“Digital retailing, home-delivery options, increased comfort and reliance on chat tools to connect with shoppers in real-time and enhanced engagement with social channels are very valuable mediums for dealers to generate sales during this challenging period,” Vetter said.
“Our automotive industry has always proven to be an incredibly resilient and resourceful industry,” he said. “We are committed to helping car shoppers and dealerships navigate these unprecedented times with an array of dealer tools that are well suited to connect with the at-home shopper.”
Speaking of at-home shopping and home-delivery, demand for technology facilitating those services is spiking.
LotLinx, in its report, is encouraging dealers to broaden such services.
“Get your finger on the pulse of what consumers need in these turbulent times,” the company said. “Free at-home deliveries and online check-outs are just some offerings that can go a long way in a consumer’s mind.”
Cars.com said its Dealer Inspire business unit had nearly a 250% month-over-month uptick in demand for its Online Shopper digital retail service in March. Dealer Inspire’s Conversation chat tool climbed nearly 65%.
Going back to Vetter’s comments on the auto industry being “incredibly resilient and resourceful,” a lot of dealers are proving that point right now.
In a Cars.com dealer survey from March 16-27, 57% of respondents were looking to increase online financing capabilities and 40% were looking to do more online estimates for trade-ins. Thirty-six percent were looking to boost online chat options and 49% were looking at-home delivery.
In an interesting side note, Cars.com has found that consumer concerns around cleanliness may provide some help for vehicle ownership over other transportation models.
For instance, 17% of respondents who don’t currently own a vehicle said the COVID-19 pandemic has led them to consider buying one, Cars.com found.
Consumers wanting to stop taking public transportation and not trusting the cleanliness of other people’s cars are among the factors driving that urgency.
Cars.com consumer metrics from March 16-24 show that a third of consumers who plan on purchasing a vehicle intend on doing so sooner, in light of the pandemic.
Citing the March 13-16 general population survey, Cars.com said 42% of consumers aren’t using ride-hailing services as frequently.
Lastly, one more bit of advice from LotLinx, which emphasized communication in times of crises like these.
“Stay informed and inform your consumers: Inform shoppers of in-stock inventory and available services,” the company said. “Transparently communicate how your business is being responsible, including statements about your strict adherence to CDC guidelines and your commitment to the community.”