In 1897, William Metziger built the world’s first automotive showroom in Detroit. Since this time, automotive showrooms have played a major role in the car buying process. Inside showrooms, consumers were given the opportunity to connect with automotive brands, explore different vehicles, and learn about the latest and greatest automotive technologies. Automotive consumers typically used the information they acquired inside a showroom to make informed purchase decisions.
In other words, visiting a dealer’s showroom was an irreplaceable part of the car buying process in the past. But that’s all changed thanks to recent technological advances. Here’s what you should know about the evolving car dealer showroom experience:
How Has the Car Buying Process Changed?
Consumers routinely buy beauty products, clothing, books, electronics, and other items online. But until recently, the automotive industry was largely unaffected by the shift to online shopping. Over the last several years, though, the car buying process has shifted online.
Some consumers have started to complete the entire car buying process online. In 2018, only about 1% of car buyers purchased their vehicle online. But just several years later, about one in 10 car buyers are purchasing vehicles online.
Others, however, have simply shifted certain aspects of the car buying process online, even though they complete the actual transaction in-person at a dealership.
For example, researching different vehicles is an important step in the consumer car buying journey. In the past, automotive consumers conducted this research by visiting an average of five dealerships before making a purchase.
However, the vast majority of automotive consumers now conduct this research online rather than at a dealer. Today’s automotive consumer spends about 13 to 14 hours conducting research online before deciding which vehicle to purchase. As a result, automotive consumers now only visit one to two dealerships before making a purchase decision.
How the Shift to Digital Impacted the Car Dealer Showroom Experience
The shift to digital has impacted nearly every aspect of the car buying process, including the traditional car dealer showroom visit. Here are some of the many ways in which it has impacted the car dealer showroom experience:
- Car Buying Process No Longer Begins In A Showroom
- Videos Drive Foot Traffic
- Virtual Showrooms
- Consumers Spend Less Time At Dealerships
- At-Home Test Drives
Car Buying Process No Longer Begins In A Showroom
A consumer’s car buying journey used to begin inside a car dealer’s showroom. The consumer would visit the showroom to consult with a sales representative, learn about different vehicles, compare their options, and make a purchase decision. But the car buying journey now rarely begins inside a dealership–it starts online.
Today’s automotive consumers start the car buying process by visiting websites to research their options. About 78% of automotive consumers visit at least two websites, and 56% of these consumers start on third-party websites. Kelley Blue Book and Autotrader are two of the most popular third-party sites that consumers visit during the car buying journey.
Only 17% of automotive consumers visit a dealership website at the start of their car buying journey. However, one-third of consumers say that a dealership website is the last website they visit prior to making a purchase decision. This means that consumers who visit dealer websites are most likely at the end of the sales cycle, which means they are in the final stages of making a purchase decision. All of this occurs before the consumer ever steps foot inside an auto dealer’s showroom.
Consumers Spend Less Time At Dealerships
In the past, sales representatives were given ample time to sell to consumers who walked into their showroom. These sales representatives played an active role in helping the consumer decide which vehicle to purchase. However, the shift to digital has impacted the role of the showroom sales representative.
Because consumers are completing many of the car buying steps online, the amount of time that automotive consumers spend at dealerships has declined over the last several years. In 2020, it hit an all-time low of two hours and thirty-five minutes. This may seem like a lot of time, but most of it is not spent inside the showroom. It’s estimated that about 90 minutes of this time is spent discussing financing options and completing paperwork. Roughly 25 minutes is spent finalizing the terms of a trade-in deal.
This leaves very little time for a showroom sales representative to actually sell to the consumer. Sales representatives often aren’t even given an opportunity to sell to consumers who visit their showrooms. This is because many of today’s automotive consumers don’t visit a dealership in-person until they have concluded their online research and decided which vehicle they want to buy. They show up at the dealership ready to complete the transaction, so sales representatives don’t have a chance to do their sales pitch.
Videos Drive Foot Traffic
Because the car buying process no longer begins in a showroom, dealers must invest heavily in marketing efforts designed to drive foot traffic. There are many different automotive marketing strategies, but research shows that video marketing might be one of the most effective ways to drive foot traffic to car dealer showrooms.
Online videos may strongly influence an automotive consumer during their car buying journey. Three-fourths of auto consumers say that watching online videos has influenced their shopping habits or purchase decisions. Furthermore, 40% of car shoppers who watched online videos to research their options said these videos introduced them to cars they otherwise weren’t aware of or considering.
However, video does more than just help automotive consumers discover new vehicles and narrow down their options. It also drives traffic to showrooms. About 60% of car shoppers who watched online videos said they visited a dealer or dealer’s website as a result of the videos they watched.
Fiat Chrysler recently used video marketing to promote its annual sale, the Jeep Celebration. The company tracked foot traffic at over 300 dealers to measure the impact of its video marketing campaign. The results revealed that the video marketing campaign attracted more than 50,000 customers to showrooms in a six-week period.
The results of this campaign clearly indicate that dealers can successfully drive more traffic to their showrooms by focusing on video marketing efforts.
The car dealer showroom experience may have changed, but this doesn’t mean it’s going away any time soon. Many automotive companies have responded to the shift to shopping online by launching virtual car dealer showrooms. A virtual showroom is an automotive showroom powered by augmented or virtual reality.
Auto consumers can typically enter a virtual showroom using their computer, tablet, or smartphone. Once inside, they can explore vehicles just like they would if they were actually in a car dealer’s showroom. They can rotate a vehicle to see it from every angle, enlarge the vehicle to get a closer look at it, adjust the settings to see the vehicle in different colors, and even step inside to examine the interior.
A virtual showroom allows consumers to get the same car dealer showroom experience from the comfort of their home. It also helps them complete another step of the car buying journey from home rather than inside a dealership. This will appeal to consumers who want to complete as much of the car buying journey online as possible. In fact, two-thirds of consumers say they are comfortable touring vehicles entirely or partially online before making a purchase decision.
At-Home Test Drives
Automotive consumers used to visit showrooms not only to explore different vehicles, but also to test drive them. However, car dealers are now giving consumers the opportunity to test drive vehicles without visiting their showroom.
Some car dealers allow consumers to schedule “test drive deliveries.” If a consumer chooses this option, the car dealer will arrange to drop off the vehicle at the consumer’s house and pick it up once their test drive is over. This is far more convenient than traveling to a dealership for a test drive, which is why it is so popular among consumers.
Automotive consumers also have the option of taking a virtual test drive using their smartphone, tablet, or computer. A virtual test drive allows them to see what it’s like to sit behind the wheel of a vehicle without ever seeing the vehicle in person. These test drives are powered by virtual reality, so the consumer will feel as if they are really driving down the road in the car of their choice.
Now that these options are available, it’s not as necessary for consumers to visit showrooms in person.
The Future of the Car Dealer Showroom Experience
The shift to online car shopping was accelerated by the COVID-19 pandemic, but this doesn’t mean that things will go back to normal once the pandemic is over. Research shows that the shift to digital has made the car buying process more convenient and efficient.
Satisfaction levels have also increased among consumers who shop for cars online. Buyers who completed half or more of the car buying steps online were far more satisfied with their overall experience than buyers who completed 20% or less of the process online. Because of this, it’s safe to say that the shift to digital and the impact it has had on the showroom experience is here to stay.