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DEALERS must be very competent working with online and offline techniques to gain future sales as recent figures show more than 60 per cent of buyers start their journey online, primarily spurred by COVID-19, an industry panel told AADA Convention delegates.

The panel heard that going online for information about cars to buy was becoming as normal as looking for music or booking dinners on the web and that online research for cars was the new motor show.

For Volkswagen, that has translated into a 100 per cent increase in leads from its OEM website in a year.

CarsGuide and AutoTrader managing director Shaun Cornelius, as chair of the panel at the association’s recent convention, said a recent study from his organisation showed 62 per cent of respondents said they start their search online.

“A year ago that was 57 per cent, so increasingly, people are starting to search online,” he said.

“It is a trend we should all be aware of, as is the new segment of younger buyers who are even more influenced by online classifieds. An online ad now represents a great opportunity for manufacturers and dealerships.”

Mr Conelius also said that his company’s research showed that 69 per cent of respondents valued online classified first, followed by dealer websites at 55 per cent, OEM websites at 53 per cent, and review sites at 59 per cent.

“Review sites are increasingly important,” he said.

The panel comprised Mr Cornelius; Volkswagen Group Australia head of digital platforms and experience Craig O’Donnell; Deloitte Motor Industry Services director of insights and analytics Dorian Lapthorne; and Car Giant WA digital manager Jamie Moyle.

Volkswagen Australia’s Mr O’Donnell said the key buyer changes are dominated by the move to online.

“For me, customers are just trying to find information and find ways they can do it in the environment at their own pace,” he said. “So previously, there might have been motor shows, now it’s online.

“In the past five years, customers have been ‘digital first’ in the majority. Digital has become the normal way in which we shop, researching and finding information.

“Perhaps the risk in the automotive side is the need to do things faster and the potential to fail faster. We’ve had to adapt faster, we’ve had to change.”

Mr O’Donnell said the industry was, in general, on its way to being prepared for the increased use of digital but was pushed further and faster by COVID-19.

“This year has been one of ‘leaps and bounds’ that has been triggered by COVID-19 and its effect on the community,” he said.

Deloitte’s Dorian Lapthorne told the delegates that digital had become part of our lives to the point where “consumers don’t distinguish between the automotive industry from buying music or buying dinner.”

“They expect to be able to interact in the same way across all aspects of their life. They’re looking for convenience and we don’t always deliver that in the automotive world.

Shaun Cornelius

“But we’re starting to get there and starting to react to what the consumer wants.

“Consumers are also looking for transparency. We often hear people talk about entering the dealership almost like they are getting themselves ready for battle – to arm themselves with information, maybe to protect themselves against those salespeople who are perhaps not having their best interests at heart.

“We know that salespeople do, but they have that sense.”

Mr Lapthorne said that in comparison, consumers feel that in an online world, they can get the transparency that helps them.

“While that’s been a long-term trend, I think in the past six months under COVID, we’ve seen that trend really accelerate and in particular in the automotive sector.

“I think one of the key telling things for me is that six months ago, only about 10 per cent of people were considering buying their next car online.

“Now we’re seeing 20 per cent of people willing to buy a vehicle online.

“When you consider how much of a financial commitment that is, that’s a massive shift in a short period of time.”

Jamie Moyle from WA automotive retailer Car Giant said ease and convenience are definitely big factors that are driving the move to consumers opting for digital first.

From a dealer’s perspective, he said it offered buyers the flexibility to progress at a pace that’s comfortable to them and allowed them to feel more in control and more informed.

“It also gives them the opportunity to disengage from a process that’s perhaps not helpful in assisting them in their endeavours,” he said.

Mr Cornelius said that the reference point for digital sales is what the buyer thinks.

“Our buyer research has told us that 60 per cent of them thought it was important to have an online showroom or an online presence as a manufacturer,” he said.

“Of that, 51 per cent said they’d be more likely to purchase from a retailer that had an online showroom, and 70 per cent said they would be open to consider buying online without actually visiting a dealer.

“Now that’s a pretty big number. It doesn’t mean 70 per cent will actually (bypass a dealer) but it’s a figure that we wouldn’t have seen in previous years.”

Mr Moyle said that the challenge was to have the right presence online and offline.

“For us, inventory is king. So we primarily employ multi-channel inventory strategies to reach our intended car buyers, like these strategies see us listing with most of the major portals and having our own dealer website presence, engaging in all best digital practices around social SEO,” Mr Moyle said.

Dorian Lapthorne

“However, when we bring this to the dealership, it’s really important for the customer to have the omni-channel experience when they arrive at the dealership.

“So it’s important for someone who’s made an inquiry on a motor vehicle to understand if they have successfully made the journey from online to offline and have all the information available.

“People talk separately about online and offline and while omni-channel is a buzzword, it is the way the to interact.”

Mr Lapthorne said that the key was not having a disconnect between the offline and the online world.

“You need to have that totally integrated so that when people come in having been to the virtual showroom and having perhaps specified a car online, they don’t then enter the showroom and have to start again, or they don’t get nine tenths of the way down the process and have to go somewhere else to do a finance deal,” he said.

“So when you can combine those online and offline worlds together, we see more and more success.”

Mr Lapthorne said the move to buying online won’t happen overnight.

“It was eight years ago that Subaru started selling online,” he said.

“So we’re going to see gradual changes, we’re going to see brands and OEMs work together to perhaps work on selling particular models online, we’re going to see different parts of the country work in different ways.

“So metropolitan dealers might work one way, rural dealers might work another and there might be a more offline presence in rural deals.

“But the key is bringing them all together and having that work seamlessly as customers work through the purchase process.

“That’s where we see success around the world – when OEMs and dealers work together to connect all those elements. And then you don’t get the disconnect and you get happy customers.”

An example of the ability for OEMs in Australia to pick up on digital trends has been Volkswagen Group Australia’s recent launch of an online purchasing tool.

“We went live in January with a pre-order activity on one model as we wanted to build competency,” said Mr O’Donnell.

“You can’t just flick a switch and everything changes in the retail sector. Then this thing called COVID came along and what we thought we’re going to do in September, we decided to do it in 11 days, which meant that the whole organisation had to get on board.

“The online ordering process we now have is easy – it takes the customer three minutes.

“It has transparency, the price is there, if you want to get a refund, you can get a refund easily. So that all those things are there to make it a safe experience and an enjoyable experience for the customers.

Craig O’Donnell

“Alongside that, we have also launched a desktop tool this year, we launched training evaluations, we launched a number of tools on the site to complement that, to really reflect this idea that no matter where you are on the purchase spectrum, you can go online or walk into the dealership.”

Mr O’Donnell said his company had also seen local SEO leads from the OEM side increase by 100 per cent year over year.

“So that’s also a lot more customers and a sign that we’re being able to do a better job as an OEM to find the names and then when a customer calls on our website we can connect them to a dealer,” he said.

Mr Cornelius asked Mr O’Donnell where the huge 100 per cent growth in leads from the Volkswagen websites have come from.

“When we launched the site we just started engaging with people straight away,” he said.

“It was a click-frenzy event. We sold about $100,000 of service care plans which is the other side of the business, aftersales, which we can engage with customers online.

“Those service plans are a retention for the dealer for five years of the customer’s service business, which is obviously incredibly important.

“So we’re planning digital strategies around the proven and we’re also just experimenting in things that we never thought we would do.”

Mr Moyle said that dealerships need to adjust to being able to assist the customers more efficiently.

“I think, looking further ahead, that the online order and purchase process will look very different as I think it’ll evolve and change again,” he said.

“Ultimately, dealers and OEMs want to be in that online space to drive efficiency.

“I think that the digital offering right now is expensive so if you sort of bought all those bits and pieces to put it all together, you need to find some ways to bring down some costs. That can come through efficiencies and people.

“It’s becoming more important to help the customer visualise the car and the dealership and the service side of the business. So I think, VR and AR, being able to put a customer in a car virtually in your dealership and video in your car, in your driveway, will get the emotion for the customer.

“Then there’s the issue of privacy. It’s going to look very different in three to five years’ time with changes coming at us around data and online experience that will change how everybody tracks, follows, finds and engages with people.

“And I think the entire industry will have to adapt to that. I mean, it will be tough on the staff and others.”

Mr Cornelius said that delegates should be aware that “It’s not about jumping on the next new technology.”

“It’s about thinking about the customer experience. New technology represents an opportunity to drive the business more efficiency.

“But it needs to be done collaboratively. This is not something dealers will do in isolation but about people working together.”

By Neil Dowling

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