A read-through of the findings in Cox Automotive’s just-released 2019 Car Buyer Journey study made me think of a conversation with a dealer about two years ago.
The dealer wasn’t doing well in used vehicles, and I was there to help him, and his team, discuss a better way forward.
A fundamental problem, it seemed to me, was the dealer’s desire to price every used vehicle to make an $1,800 front-end gross profit. As a result, the dealer had a lot of aged units and an overall Price to Market average for his inventory near 100 percent.
I suggested that more market-transparent pricing might help get customers interested in his cars.
The dealer responded that he didn’t think shoppers in his market really used the Internet all that much and, if they did, they weren’t all that savvy and sophisticated as they sussed out vehicles and potential purchase prices.
I specifically remember a comment the dealer shared: “There just aren’t that many sharpshooters out there to worry about.”
I begged to differ back then, and the Cox Automotive survey data suggests the comment’s even more off base today.
Consider the following take-aways from the Car Buyer Journey study:
Consumers spend significantly less total time researching and shopping for their next vehicle (about 14 hours today versus 14.5 in 2017). The report notes car buyers are now in the market for an average of 96 days, a drop of more than 20 days from two years ago. Between used- and new-vehicle buyers, used buyers spend more time in the hunt than new buyers (about 14 hours compared to 13 hours, respectively). Overall, the portion of research/shopping time spent online has slightly increased over the past two years.
Car buyers visit fewer dealerships in total (2.3 today compared to 2.7 in 2017). The report notes a slight difference between new- and used-vehicle buyers. The former will visit 2.5 stores, the latter, 2.2. Both figures, though, are down from two years ago.
Car buyers consider the specifics of a vehicle as a final purchase influencer more so than other factors, such as the make of the vehicle, the deal, or the dealership experience. This point affirms the axiom that, when all is said and done, the car is usually the star.
None of these data points offers a “wow” factor if you’ve been paying attention to changing consumer buying expectations and habits.
But, together, they do paint a portrait of online vehicle buyers who are getting better, and smarter, at finding exactly what they want in their next new- or used-vehicle purchase—and bypassing dealers who don’t fulfill their needs and wants.
In hindsight, I should have asked the dealer who made the sharpshooter comment to better define what he meant. In my book, if more buyers are coming to your dealership with a specific vehicle and price in mind, which I believe to be true, they’re shooting a lot sharper than in the past.
The Car Buyer Journey study also notes that, despite the best efforts of many dealers who are working hard to provide a more satisfying car-buying experience, 61 percent of vehicle shoppers say their most recent purchase experience was the same or worse than the last one.
This last finding suggests dealers have a significant opportunity—if they choose to do the work of meeting buyer expectations and providing the experience they expect, even as both continue to evolve.
I can suggest two ways dealers can get started.
First, dealers probably still need to give more consideration to what new- and used-vehicle buyers really want to know as they research and shop online, and more credit to how much they already know when they contact you about a car.
Second, instead of focusing most on how many new/used cars you sell every month, dealers should give equal, if not more, attention to whether those deals truly represent the acquisition of a new customer you can call your own, and not just another transaction.