Buying A Car At Home: Manufacturers, Dealers Ramp Up E-Commerce Tools

By Alex Kwanten

Consumers are used to the convenience of app-based services like OpenTable or Uber, and they’re expecting that easy experience when buying or servicing cars. As a result of the impact of Covid-19 on car buying, they’re starting to get it.

That’s according to Dan Mohnke, Vice President of e-commerce for Nissan, who is leading the company’s efforts toward serving customers who want modern sales and ownership experiences.

In the decade prior to Covid-19, as people started banking online and shopping on Amazon, automakers and tech companies fought to bring digital convenience to car buying. They often faced technological and legal hurdles as well as resistance from dealers, who balked at the tech investment and disruption to traditional processes. (Even if automakers helped underwrite the investment dollars.)

Customers, for their part, were interested. A 2018 study by consulting firm Deloitte found that 60% of U.S. car buyers were interested in buying online from a manufacturer.

That’s due in part to modern consumer expectations and also the historical dislike of the dealership process. Customers want test drives and product help, but they hate long waits, tension over financing and surprise extras, running a gauntlet of multiple staffers, and the perceived lack of transparency.

The dam finally broke when coronavirus shut down physical showrooms, leaving dealers dependent on e-commerce to keep the lights on.

“It really fast-forwarded the industry,” says Mohnke, condensing what might have been five years into just a few months. Those tools bring new functionality and eliminate the aspects of car buying that customers like least.

One of the newest tools is Nissan@Home, announced by the automaker in December. The platform allows customers to conduct 100% of their purchases online, including test drives, financial arrangements, secure document exchange, and home delivery.

Nissan is the latest automaker to debut an end-to-end eCommerce solution, which allows customers to buy their vehicles online and take delivery at home. Nissan

If they’d rather not buy purely online, customers can resume their purchase at the dealership or get guidance from sales staff in real-time.

The system will soon add accessory sales capability and the ability to schedule pick-up and drop-off service as well as a variety of other ownership extras, Mohnke says.  “The goal is to have an ownership portal where you can access services the same way you do through Google.”

“Some of our dealers were already working toward this with aftermarket tools, but we wanted to create a really uniform, functional experience,” Mohnke says, noting that it wasn’t easy to integrate real financing offers and dealers’ disparate back-end systems. While all dealers’ systems can communicate with their manufacturer’s headquarters, many use different platforms for inventory and finance management and often have relationships with local or regional banks.

Nissan@Home will roll out nationwide by summer.

Banister Nissan of Chesapeake and Banister Nissan of Norfolk, both in Virginia, were part of the pilot program. As an organization, Banister was already ahead of the game. “I’d already tried lots of e-commerce tools and this is a true A-to-Z solution,” owner Dan Banister told Forbes Wheels.

In many older systems, Banister says, customers would enter all of their information online and then transition over to the physical store–only to have to start all over again. Second, the deals they put together online were often only generalized quotes, not reflective of consumers’ real credit.

The new system resolves some of the consumer complaints about dealers’ e-commerce tools while making the buying process faster and, importantly, “much more transparent,” says Banister.

Dan Banister, Banister Nissan
Dan Banister, owners of Banister Nissan of Chesapeake and Banister Nissan of Norfolk.

“When digital tools don’t give the customer accurate information, they feel we haven’t presented things fairly,” Banister says. That’s bad for both parties, he says. “We want to give them the information they need to make an educated and informed decision.”

The customer is now in the driver’s seat to structure and complete their deal. “They can get their actual interest rate, payment options from multiple lenders, and a guaranteed trade-in value,” Banister says. “They know what they’re getting and what it’s going to cost.”

Customers can go at their own pace and communicate directly with dealership staff to answer questions. “Completing most of the steps remotely can shave two hours off of a traditional dealership visit,” Banister says.

Buyers are also guided through the entire transaction by a single point person, so there’s more of a relationship and more consistency in communication.

About 30% of Banister’s customers are using the system, but only a few buy entirely online. The self-serve nature of the tool means staff spends more time answering substantive questions about vehicles and ownership, making them product specialists and sales consultants.

The first wave of Covid-19 saw big sales drops and declines in dealership staffing levels. Last summer, Adam Robinson, CEO of automotive staffing firm Hireology, told Automotive News that lower staffing levels may be permanent, suggesting that digital buying tools could help fill the gap.

“Dealers, by and large, have permanently re-architected the way they sell cars,” Robinson added.

Chrysler E-Shop
Chrysler E-Shop is FCA’s latest eCommerce tool, initially rolled out in April at the height of the first wave shutdowns but updated in October of 2020. FCA

What Other Automakers Are Offering

Nissan is only the latest manufacturer to offer a robust e-commerce platform or an array of “home services,” with home delivery becoming nearly ubiquitous among premium brands.

Individual dealerships and the larger dealer chains sometimes offer their own platforms, but many manufacturers are trying to build functionality for their entire network.

Fiat Chrysler Automobiles launched its Digital Buying Experience in April 2020 and rebranded it as E-Shop months later in October. The system is an end-to-end online buying platform for Alfa-Romeo, Chrysler, Dodge, Fiat, Jeep, and Ram dealers, allowing shoppers to book home test drives, secure their own financing, securely exchange documents, and take home delivery.

General Motors launched its Shop.Click.Drive program in 2013 and has given it periodic tech updates over the years. The system allows Buick, Cadillac, Chevrolet, and GMC customers to shop for vehicles online, review financing options, and take home delivery. The percentage of customers who completed buying processes online nearly tripled after Covid-19 and that the company expects sustained heightened use, according to a GM spokesperson.

Honda offers its own Shop Simple and the Acura Precision Purchase programs as well as Honda Service Valet. The online buying tools are end-to-end solutions that the company says allow buyers to go at their own pace. About 15% of the company’s dealers are already using the systems, with availability expected to grow to more than half of its network in 2021.

Hyundai launched its Shopper Assurance program that features transparent pricing, flexible test-drive options, and a streamlined purchase process in 2017. In April 2020, the automaker debuted “Click to Buy,” an end-to-end digital buying tool with home delivery. About 10% of customers buy entirely online using the tool, which is available at the vast majority of Hyundai’s 820 dealers, a spokesperson for Hyundai told Forbes Wheels.

Lincoln Effortless Sales
Lincoln began offering a suite of “at home” services in 2016 that started with pick-up and drop-off service and is evolving into e-commerce and virtual showroom technology. Lincoln’s investment in improving purchasing technology may have been a factor in its recent top ranking in JD Power’s 2020 Sales Satisfaction Index study. Lincoln

Lincoln began offering pick-up and drop-off vehicle service in 2016 and soon added a suite of home-buying tools, including Effortless Sales, an end-to-end guided shopping tool with home delivery. More than 80% of Lincoln Dealers offer the platform. In 2020, the brand also added Lincoln Showcase, which gives buyers virtual tours of vehicles and their features with live product specialists. Parent company Ford Motor Co. also offers robust online buying tools and home delivery options using the same technology, developed with software partner AutoFi.

Toyota Motor Corp. is currently expanding the use of SmartPath, an array of online buying functions including securing financing. Though the number of dealers offering the service is still small, the automaker expects to expand the system throughout 2021.

Source: Buying A Car At Home: Manufacturers, Dealers Ramp Up E-Commerce Tools