How the pandemic has changed car buying forever
The ramifications of the pandemic have changed all industries, with some transformed forever by the acceleration of ever more digital retail experience for consumers. This is particularly evident in the automotive sector, where the entire process – from consuming content through to test drives and the actual sales experience – has been revolutionized in the past year.
With visitors to physical dealer showrooms restricted severely in so many markets, the shift to digital consideration has been e
This was the take-out from a panel discussion at The Drum’s Digital Transformation Festival, in which we looked at the digital disruption of the automotive sector. The session featured leading marketers from Cadillac, Nissan and co-host carwow and explored subjects ranging from the future role of showrooms and dealer networks through how automotive content is consumed and the potential for EVs (electric vehicles) to further disrupt a relatively ‘archaic’ sector over the next 12 months.
With visitors to physical dealer showrooms restricted severely in so many markets, the shift to digital consideration has been exacerbated. It has led to a variety of alternative strategies from different manufacturers and a tangible shift in the consumer’s taste for content.
Sepi Arani, media and commercial director at carwow, noted that there used to be an average of eight visits to a dealership before a purchase, with that “now down to 1.6”. However, the number of digital touchpoints involved has risen to 24. carwow, Europe's largest new car marketplace with up to 80m views a month, reports a massive shift in users seeking third-party reviews rather than manufacturers’ branded content.
Allyson Witherspoon, US chief marketer for Nissan, said: “The car buying process is now solely in the hands of consumers. Consumers will not just be engaging with content on our own channels, but all these different touchpoints. How do we connect these touchpoints? And how do we do that in an ever-changing regulatory environment regarding privacy?”
Arani noted that what may seem to be innovation in the conservative automotive sector may not actually be the case for the consumer, who is used to so many new freedoms in other sectors: “If I’ve been able to order my goods online or even pay my council tax in the UK on an online portal, but I can’t pay for my deposit my car online yet… then this doesn’t connect with innovation from a consumer perspective.”
Both noted the legacy value issue of national and regional dealer networks as a conundrum for the industry: “In that context, Tesla is not that innovative, if being able to buy your car online is suddenly completely normal to a consumer,” continued Arani. “It’s just because it’s not tethered down or anchored by huge legacy systems, processes, people, resource. I think the industry is holding on to that for as long as possible. But this year really does feel like the year that things had to change.”
So, what of the future role of dealers? Is there one? Marcie Perez, associate director for media and performance marketing at Cadillac, is clear that they will continue to matter – largely because the process of buying a car is so much more personal and customizable than with other products. And, of course, this is such a big purchase.
Cadillac launched Cadillac Live just before the pandemic hit. “It’s a website where you can talk live with a product ambassador about any one of our products. We have our future vehicles there as well in the showroom. And it allows you to talk one-on-one – you can see the ambassador, get a walk through the vehicle and they can talk about your specific questions. It’s not a pre-taped video, not a canned speech.”
Averaging six-to-10 minutes of engagement with consumers, the ambassador cannot see the prospective buyer, so there is greater privacy. “It has bridged that empty space the pandemic has created,” Perez added. So if it’s 9 o’clock at night and dealerships are closed and you can’t get ahold of anybody, you can jump online and actually talk to a human again.”
Witherspoon noted regulatory difficulties involved in selling cars direct-to-consumers in the US. She said Nissan has worked with its 1,100 US dealers on setting up a Facebook Live network involving one-to-one digital appointments. “Now, we’re meeting consumers where they are. So, if it’s in social media, that’s more on their terms, versus just blasting out a one size fits all message.”
Looking at the next 12 months, the trio agreed that the jury was still out on ‘social selling’. Although brands were ploughing a lot of resource into testing the waters, the complexity and customization of the purchase made this a challenge – it isn’t quite the same as buying a Burberry coat over WhatsApp.
The same ambivalence applied to the issue of ‘subscription’, where manufacturers had still to find the right price point to make the service economically beneficial to both parties. However, there was agreement on the need for dealers to reset their relationship with consumers to become less transactional, to build relationships, and that the ‘human-to-human’ factor would always have a role in a world where consumers are increasingly frustrated by call waiting and email chains.
All agreed that the consumer taste for third-party, more objective content was an irreversible trend. Rather than trying to directly influence this content, the challenge was to find the right ambassadors and influencers with whom to work to help reach consumers. This situation has only become more complex because of the arrival of EVs in the marketplace, along with so much disinformation about them.
Perez believes educating consumers about EV would be Cadillac’s major focus over the next year. Sepi believes that the EV explosion would be the major trend of the next 12 months – that it allows a newly level playing field for established and new brands alike. “Consumers are buying a new technology and brand loyalties are reset to zero, providing a fantastic opportunity, so I think we are going to see a lot of brands we have never heard of take significant market share,” he concluded.
Watch the full session Sepi Arani, media & commercial director, carwow, Allyson Witherspoon, US CMO, Nissan, Marcie Perez, Associate Director for media and performance marketing, Cadillac talking to Lynn Lester, managing director, events, The Drum here.
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