The global pandemic has disrupted nearly every single industry and the automotive industry is no exception. One of the most notable impacts of COVID-19 for automakers and dealerships has been on the car shopping experience as consumers are making the shift to online purchasing. Not only do over 90% of car buyers conduct online research before a transaction, but also more and more of the actual sales themselves are taking place 100% online.
Pre-Pandemic vs. Pandemic Online Car Sales
COVID-19 gave them just the opportunity they were looking for. According to ABC News, U.S. automotive dealers reported “record profits” in 2020 even in the midst of a national recession. And out of these new car sales, nearly 30% were completed online.
“This shift to digital retail is positive for dealers who embrace it,” Alan Haig, automotive retail consultant and president of Haig Partners, told ABC News. “For those that don’t, they will lose customers and be harmed by the trend.”
Millennials Become the Top Car Buyers
Another surprise for the automotive industry was the fact that among these consumers who bought a new car last year, millennials topped baby boomers for the first time, reports The New York Times.
“Millennials were presumed to dislike cars because — thanks to alternatives like Uber, Lyft and helicopter parents — they often delayed getting a driver’s license,” The Times said. “Financially strained with school loans, difficult job markets (the Great Recession and the just-now-fading pandemic set back careers) and an average new-vehicle cost of $38,000, they delayed car-buying even longer.”
Still, in 2020 millennials bought more new cars than any other age group — that’s 32 percent of total new-car sales — and they were nearly twice as likely as boomers to shop for and purchase their vehicle completely online.
ExplodingTopics.com reported that the online car retailer Carvana sold 244,111 cars in 2020, which was an increase of 37 percent over 2019. Additionally, Tesla decided to close all of its retail locations in 2019 and sell all of their new cars online.
The Future Is An Online Retail Experience
With these telling recent consumer trends, it’s important for OEMs and dealerships to take action now and invest in their digital shopping capabilities. With eCommerce only expected to grow across all industries, it’s time to make sure you can offer consumers the online retailing experience they’re starting to prefer.