Online Car Shopping in the Time of Coronavirus
April 6, 2020
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As the coronavirus pandemic has grown in the United States, virtually everything about our daily lives has temporarily shifted. Social distancing has become a necessary way of life for most Americans. 30 of our 50 states have issued stay-at-home orders, as per CNN. Millions of employees are working from home, and many nonessential businesses are currently closed. This public health crisis has also affected the automotive industry, which typically involves in-person test drives and deals.

A silver lining of this situation, however, is that many dealerships are embracing automotive online shopping like they never have before – and like they should have years ago. Dealerships that go digital will reap the rewards of this decision long after this outbreak passes and we can return to business as usual. Carzato has long been a proponent of digital retailing in the automotive space. Read on to learn more about how creating an online shopping experience for your prospective customers can help you thrive through Coronavirus and beyond.

Making Sense of Social Distancing

Social distancing is a strategy to help prevent the spread of coronavirus (specifically, the novel coronavirus, SARS-CoV-2, which causes the illness called COVID-19). Essentially, if people stay apart from each other, they can avoid sharing germs that might make themselves or others sick. One of the reasons this virus is so problematic is because it is very contagious. By slowing down how quickly it spreads from one person to another, we can make sure that as few people fall ill as possible and hospitals have enough room to treat everyone. As an article from John Hopkins Medicine explains, “social distancing is deliberately increasing the physical space between people to avoid spreading illness. Staying at least six feet away from other people lessens your chances of catching COVID-19.”

This preventive practice makes taking customers around a showroom or jumping in a car for a test drive impossible. Furthermore, as we mentioned above, many states have issued legal orders that require employees to work from home and nonessential businesses to close for a matter of weeks or months. Depending on the state you live in, your dealership may or may not be open for sales during this time. As the outbreak evolves and states make decisions about how to deal with it, you’ll want to stay up to date on the latest ordinances and be sure to follow them.

Going Virtual During the Virus

While social distancing may be good for public health, it can make car sales much more challenging. As Reuters recently reported, “U.S. new vehicle sales will be hit hard by the pandemic. Demand dropped by 13 percent in the first 19 days of March, according to research firm J.D. Power. In especially hard-hit markets like Seattle, San Francisco, Los Angeles, and Chicago, where the virus has spread quickly, demand slumped as much as 22 percent.”

This is a difficult time for dealerships, but you don’t have to succumb to the slump. Even as car sales are trending downward, interest in automotive digital retailing is up. That’s because dealerships understand that in order to keep their businesses running in a turbulent time, they need to take their sales online. After all, consumers are buying groceries, medications, and even toilet paper online, so why wouldn’t they also take their car shopping to the Internet?

According to a recent Automotive News survey, approximately 90% of dealers who participated were “likely to increase their use of digital tools to reach customers wary of visiting showrooms amid the social distancing guidelines designed to limit the spread of the COVID-19 virus.” Similarly, another Automotive News piece reports that a Toyota dealership in Florida has begun offering remote vehicle delivery to all its customers. While this dealership’s “showroom traffic was off by 38 percent through March 24,” its “phone leads were flat, and chat leads have more than doubled.” Prospective customers weren’t walking into the dealership, but they were certainly reaching out from afar.

Understanding that their customer base was likely social distancing and would be much more likely to engage with them remotely on the Internet, this dealership harnessed the power of digital retailing to its advantage. Automotive News notes: “as the outbreak escalated, managers took to using virtual tools to close deals…Finance managers have started to use the Zoom video-conferencing app to connect with customers; they can text a link to a virtual finance-and-insurance menu to a customer so they can discuss the information on the call.” In this pivotal time period, dealerships must understand how to pivot their services so that customers can comfortably, easily access them.

Why Digital Car Retailing is Always in Style

Social distancing is a temporary measure, but online car shopping likely won’t be. Even before the coronavirus came about, many of your prospective customers were on the Internet rather than walking into your offices. A 2018 Cox Automotive study found that “car buyers spend 60 percent of their time online.” Similarly, a report from Facebook for Business explains that “63 percent [of prospective buyers] discover new automobiles online” and “53 percent [of car shoppers] decide on new automobiles online.” Many customers already preferred to conduct research and choose cars online. Automotive News asserts that “the shift [toward online automotive shopping] has been underway for years, but dealerships have adopted varying elements at different speeds.” Now that the coronavirus has made that a necessity, your prospective buyers probably won’t want to go back to the old-fashioned car shopping experience once the pandemic is over.

The general manager for the Florida Toyota dealership suspects that the transition to digital retailing may become permanent: “Now that customers have seen the digital options, Kramer said, after the crisis wanes, ‘I don’t know that [customers are] going to want to spend three hours’” at the dealership poring over paperwork, rather than doing it via videoconference. He also commented, “‘We’re working on building our whole business model around this’” new technology. The answer to social distancing and the coronavirus is also the general solution for dealerships that want to keep up with the pace of twenty-first-century technology and business.

As Automotive News reported, “Jack Kare, digital performance manager” at a Michigan Ford dealership summed up the situation best: “‘it’s going to be tough. It’s going to be an adjustment for a lot of your average salespeople, your average dealerships,’” but “‘how we do business in this next 90 days… is going to shape the future of our business. So if we can just accept this, adapt it now, your store is going to be fine.” Rather than worrying about the present and future of your business, your dealership can shift to a digital retailing model that will sustain you through the coronavirus and for years to come.

Carzato is Here with Insights for this Critical Time

In the midst of this pandemic and the social distancing that comes along with it, we understand how demanding it can be to run a dealership. Thankfully, digital retailing technology exists and customers appear eager for an online car shopping experience. Carzato offers cutting-edge insights on this industry. Follow us on LinkedInlike us on Facebook, and subscribe to our channel on YouTube to learn more.