Survey Says: Car Buyers Want A Hybrid Of Online And Offline Shopping Experiences

Consumer expectations are forcing dealers to morph the traditional car-buying process into a hybrid of online and offline interactions.

That’s the finding of a recent consumer survey by consulting firm Deloitte and a Harris Poll conducted on behalf of auto retailing giant Sonic Automotive.

Consulting firm Deloitte’s 2021 Global Automotive Consumer Study found that 71% of American consumers still want to buy in person. The Harris Poll similarly observed that 64% aren’t comfortable buying entirely online. Both studies, however, discovered there are many parts of the process that customers prefer to do online, especially when they streamline the process, making it easier, more transparent, and giving customers more control.

Car buyers want to complete most or all of their research and paperwork online as well as guide their own financing process. They also want to evaluate extras like extended warranties in a more transparent way and at their own pace. But in-person test drives and close-up evaluations of vehicles are must-haves for many people—and barriers to online shopping. But how long are most people interested in spending at a physical dealership? One hour, max.

Still Value in the Test Drive

When asked by Deloitte why they’d prefer an in-person experience, 75% of consumers surveyed want to see a vehicle before they buy and 64% require a test drive. After that, however, the “requirement” for in-person shopping drops off sharply. Only 38% cite face-to-face negotiation as an important reason to visit the dealership.

Only 54% of consumers aged 18 to 35 still want in-person transactions, says Ryan Robinson, automotive research leader at Deloitte. On top of this changing demographic is the reality that while you can’t digitally test drive cars, online tools can replace many parts of the process customers have historically loathed: long waits, tension over financing, dealing with lots of people, and paperwork.

“The main reasons consumers want more of a virtual process are convenience and speed,” Robinson told Forbes Wheels. “A virtual experience tends to alleviate a lot of the consumer pain points that we’ve been hearing about for, frankly, decades.”

“We’re moving into a very interesting time for vehicle retailing,” says Robinson, noting that digital tools will generally empower customers and consumer expectations may change how dealers do business.

Those changes are already underway, and consumers have definitive ideas about where they should lead.

Time and Test Drives are Top Priorities

“Most of the pain points in the customer journey come down to time,” says Jeff Dyke, president, and director of North Carolina-based Sonic Automotive. One of the nation’s 10 biggest auto retail chains, Sonic operates 84 dealerships in 13 states as well as 16 EchoPark used-vehicle stores.

“In our Harris Poll and again and again, we’ve learned that the consumer does want to go to the store to look at the car or truck they’re buying, drive it and compare it to a few other vehicles on hand,” Dyke told Forbes Wheels. “But that’s about it.”

Indeed, the poll, conducted in September 2020 that sampled more than 2,000 recent car buyers revealed exactly what parts of the process they’d most like to do online instead of in-person:

  • Search for a car (80%)
  • Determine the final price (78%)
  • Schedule an appointment to receive/take possession of the car (76%)
  • Value their trade-in vehicle (75%)
  • Conducting credit checks and financing (74%)
  • Review and purchase insurance or extended warranty products (73%)

Giving buyers the tools they need to complete these steps on their own online saves both the customer and the dealership lots of time, Dyke says, shortening transaction times by as much as 75%. They also eliminate traditional complaints.

“I love selling cars and I love going into a store and actually doing a delivery,” Dyke says, “But it’s not fun if the customer spends all day Saturday waiting around in lounges for the finance office or because you only have two people to appraise trade-ins.”

The Road to the Sale

In addition to long anxious waits, customers also dislike having to interact with many different people at the dealership or go through what salespeople traditionally refer to as the “road to the sale.”

“Consumers don’t want to do that,” Dyke says, adding that online tools allow them to go at their own pace in an environment of their choosing. This ideally results in interacting only with one staffer if they choose to come to a store.

Sonic launched a set of digital buying tools in 2017 and heavily upgraded them in 2020 so customers could transact end-to-end online. Only about 5% of Sonic customers actually go that far, but more than half do their trade appraisal and financing via digital interactions, according to Dyke. The goal was to add consumer convenience and reducing in-store purchase times to less than one hour.

This was the ideal amount of time that customers indicated they wanted to spend in-store when Sonic was designing the user experience for its EchoPark stores, Dyke says.

Deloitte found similar sentiments among consumers in many past surveys and research initiatives. “When customers walk into a dealership, they have a clear expectation of how long it should take to close a transaction, and it’s about an hour,” says Jody Stidham, managing director at the consulting firm.

Removing The Finance Office

The trip to the finance office is probably what most consumers like least about the in-person experience.

One area of particular contention for many customers, and for dealers, is the set of extra finance and insurance products traditionally offered near the end of the purchase (the “F&I menu”).

The menu includes staples like extended warranties and gap insurance, but also window glass etching, paint and upholstery sealants, clear-film stone chip protectors, and nitrogen-filled tires. They can add thousands of dollars to purchase and most customers eye them warily, unsure of their real value, and worn down from hours of car buying.

Similarly, many dealers resisted digital retailing in the past for fear of not being able to sell or properly present items from the menu.

“I was trained early on that you present 100% of the products 100% of the time,” says Dyke, noting that at some stores if there are 12 products, all 12 will be presented. “That’s not a good use of time; the consumer isn’t going to buy all of them and not every finance manager feels comfortable selling all of them.”

It’s better for dealerships to focus only on a small set of products that provide real value, Dyke says. Online tools can do exactly that. In a one-stop experience, Sonic’s online tools allow customers to arrange their own financing and they present a range of warranty and service products.

When given the opportunity to evaluate and research these products on their own time, many buyers still choose to take them. “We’ve seen no fall-off in terms of what people buy online versus in-store,” Dyke says, “And extended warranties are a big part of our revenue.”

There are still some challenges to pushing all of the financing processes online, however. Though several states still require physical signatures on documents, customers are more willing to come in a sign if they’ve done most of the transaction online, Dyke says.

Taking Advantage of the Tools

Surprisingly, Deloitte has found that online finance tools are also somewhat underutilized.

“We know that the finance process is among the most anxiety-inducing parts of buying a car,” says Deloitte’s Ryan Robinson. “But in our survey, we found that 32% of customers did no research at all on their financing options.” Counting people who did less than one hour of finance research boosts that number to 52%.

For these customers, presenting finance online is likely a way to boost their satisfaction, but only if they take they take the initiative. Even if car buyers don’t intend to secure their own financing, Robinson says they should take advantage of the many online finance calculating tools manufacturers and dealers offer. “It’ll reduce the shock and the anxiety.”

Stidham agrees and says that the proliferation of online retail tools because of Covid-19 has, to an extent, put consumers in the driver’s seat when reshaping the traditional car-buying experience.

“The pandemic forced dealers to adopt and engage on digital channels,” Stidham says, and getting positive responses from consumers will only further spread the adoption of the tools that make the process easier.

“Now dealers are open to communicating through new channels and offering new tools; they’ve progressed much further in this space recently than they have in years past,” Stidham says.

“Consumers should take advantage of that,” she says.

Source: Car Buyers Want A Hybrid Of Online And Offline Shopping Experiences, Surveys Say