Cars and E-commerce: here we go
Consultants have expected the disruptive power of e-commerce to spread to vehicles since the dot-com boom more than 20 years ago. For all its focus on speedy products, the car industry is a slow-moving beast: the only significant change to the vehicle retail structure has come from Tesla, which distributes through independent dealerships rather than controlled showrooms.
Now, more than ever people might buy their next car online.
The relationship between Coronavirus and online car sales
Could Coronavirus be the detonator for this ticking time-bomb?
- A lot of customers have been experiencing, during Covid outbreak, how online sales give them the option to avoid haggling and paperwork traditionally involved in buying processes.
- Financial constraints in the medium term will led to higher price sensitivity. Internet provides tools like Idealo or Trovaprezzi to compare options, prevents common add-ons selling by dealers and allows direct sale.
- The coronavirus crisis will certainly push more online vehicle sales. Yet dealerships are still an embedded part of the industry, particularly in Italy, so we will probably observe a slow adoption rather than a rapid change.
It’s also important to note that manufacturers neither will stand unarmed nor will abandon their partners: Fiat Chrysler, for example, recently talked up e-commerce tools that will guide dealers through the sales process.
Car sales: online competition
What future for dealers?
- Those that hadn’t previously embraced digital tools will suffer to get back on schedule: even as lockdowns lift, consumers might look to minimize personal contact in the purchase process.
- Those that, on the other hand, embraced digital tools will play on not digitalized weaknesses.
- In addition, rivals like Subito, Autoscout24 or Quattroruote (companies that trade secondhand cars online) are emerging stronger than ever.
Competion will be fierce, given the declining market they face.
How can a dealer survive?
Unfortunately, there is no easy recipe. But we can name some basic requirements: adapt and innovate.
- Adapting must be the main priority in the short term. It requires both accuracy and speed; better start seeking help, that’s a war they cannot afford to win alone.
- Innovating as a dealer is no joke: they cannot change the product. But they can change how they sell it.
We offer augmented reality solutions that will change the customer experience; just picture it: the customer can have an idea of every possible customized car while the dealer bears no cost. Seems like a dream? That’s nothing but the future.