The growing influence of the web in the car-buying journey is repositioning the definitive point of the customer journey, the final transaction. Already, 75% of automotive consumers would consider conducting the entire purchase online, including finance, negotiation, paperwork and delivery (Accenture). Such expression is driving momentum within automotive e-commerce, with online car sales predicted to be worth $4.5bn by 2025 (Financial Times).
Research suggests that the willingness to buy cars online stems from a dissatisfaction with current offerings available at dealerships. McKinsey explains that consumers are willing to buy online for the sake of convenience and the expectation of lower prices. Furthermore, they suggest consumers would opt for buying online to save them from the elements of the dealership they would rather avoid, such as negotiating with salespeople (McKinsey). Additionally, there are regional similarities in consumer preferences for online purchases. 55% of US, 54% of German and 62% of Chinese consumers would be tempted to buy a car online if it saved time and money (Accenture). Indeed, Chinese consumers bought 100,000 cars online during Singles' Day sales in November 2016 (Fortune). This is equivalent to the number of cars 1000 Chinese dealers would sell in a month (Fortune). It would seem that car buyers in multiple markets demand more convenience in the buying process globally, with the web fulfilling such a mandate.
The impact of the internet on the auto retail industry is well-documented. 97% of car-buyers conduct research online (Car Keys). If consumers are already using the internet to research and compare cars and prices, then the next logical step would be to complete the entire process online. Moreover, Deloitte highlights that consumers no longer view their retail journeys in an industry-specific vacuum (Deloitte). Therefore, as customers experience a more holistic approach to online and offline retail, expectations will fuel an increase in demand for full online car purchasing.
In terms of where the industry is currently in embracing the importance of engaging customers online, Audi AG has led the way. It was the first automotive manufacturer to commercially implement real-time 3D visualisation over the web using ZeroLight's Cloud solution. The result has been described as the best car configurator on the internet (Jalopnik), Audi is proving the value of delivering a more engaging customer experience. Over a 100-day trial of the cloud-powered 3D configurator, Audi.de saw a 66% rise in interactions with the car compared to the previous 2D version. As a result, customers configured cars with a higher basket value compared to when using the previous 2D configurator; and, customers consistently rated the 3D configurator higher vs 2D across a range of qualitative KPI's (ZeroLight).
Regarding sales, Tesla, has faced several legislative hurdles and legal battles for its efforts (Automotive News), whilst other brands are rumoured to be exploring the possibility of offering full online purchases. A number of car makers (OEMs) have already announced ways for customers to complete at least part of the purchasing process online, either on their own platforms or through third parties before being contacted by a dealer to finalise the purchase.
Ultimately, the automotive industry will have to seamlessly cater for both online and offline transactions, allowing customers to choose a digital or physical way to complete their purchase journey. To this end, OEMs and dealers will have to continue developing their digital retail models with a customer-centric, omnichannel approach.