Global Pandemic Forces Auto Dealers into Selling Cars 100% Online

Global Pandemic and Automotive Computer Chip Shortage:

The global pandemic which has resulted a chip shortage has caused problems in the U.S. auto industry. The shortage of computer chips has substantially reduced the inventories of dealerships and the global pandemic forced dealerships to resort to unheard sells tactics to sell cars and stock inventories. Gone are the days where everyone had to come into the dealership and get steamrolled by a crafty sales person that low balled your trade and kept you at the dealership for what seemed like an eternity. Their strategy was simple but effective, hoping to wear you down until you accepted their terms. The global pandemic has caused disruptions in the manufacturing of computer chips, decreasing the production of new vehicles and COVID-19 related restrictions has reduced the number of customers visiting dealerships. A double whammy that has made every customer a top priority for each dealership like never before in automotive history. Thereby forcing dealerships to start embracing third-party services and technology that makes purchasing an automobile more convenient or gives the customer an experience.

Starbucks Curbside Pick-up:

A very popular technology that dealers are using is very similar to what is currently popular at places such as Starbucks Coffee Chick Fila and McDonalds. These places allow you to use their mobile Apps to place your order, then come pick it up using their “Curbside Service.”  They even have designated parking spots and pick up entrances for these customers. Customers like the service because there is no more waiting in line. The customer just gets their coffee and go! Similar to these curbside services, automotive dealerships have started to partner with strategic partners who provide a similar service. Now a customer can order a vehicle online, including all the necessary paperwork and pick-up the vehicle at the dealership, just like a cup of coffee. According to J.D. Power, the average customer spends more than four hours in a dealership purchasing a vehicle. That same study stated that customers believe that four hours is too long to wait and would rather spend no more than two hours at a dealership. Along with the time spent at the dealership, a recent study corelated the time spent at the dealership to the positive or negative reviews a customer gives the dealership online. Those customers that spent less than 75 minutes were more likely to give a dealership a favorable review. Using these third-party technology services have made car buying more convenient for customers and made it more likely that the dealership will increase customer traffic and revenues with more favorable online customer reviews, mitigating the affects of the global pandemic by meeting customers where they are with the third-party software.

VIP Auto Services:

Since the global pandemic, online dealerships such as Carvana and Vroom have increased in their popularity because of their ability to complete the entire purchase of a vehicle 100% online. This is a no brainer in the middle of a pandemic and if you’re a tech-savvy Millennia or Gen-Z  who doesn’t need much help navigating a 17, 000 vehicle database. According to a Digital Commerce 360 Online Vehicle Shopper 2019 Survey, 51 percent of auto consumers or 1.7 million consumers are not tech-savvy. Dealerships have picked up on this fact and are now offering third-party services similar to the online car retailers these services allow the less savvy tech people to also purchase a vehicle 100% online. The only requirement is that the customer is ready to purchase within days of using the service. These services are designed to make the car purchase more of an experience then just purchasing from an online portal. The services allow the customer to complete the purchase process 100% online including home delivery.  Some dealership’s third-party services go as far as to provide a dedicated assistant that will search for the vehicle and directs the customer step by step through the online purchasing process. The customer is treated like a VIP, after the customer show a digital offer-sheet to the dealership. The customer is escorted to a special VIP room while their vehicle is washed, waxed and detailed. These services also allow the customer to make digital offers to multiple dealers and negotiate anonymously from a third-party App. The service includes free local home delivery of the vehicle and guarantees that the customer will receive the best value using their App. All of these services are changing the way consumers are purchasing vehicles, making it convenient and more of an experience, it’s just too bad it took a global pandemic and a resulting computer chip shortage to create a better purchasing experience for the automotive consumer.

By Kasper E. Mingo

CEO and Co-founder of MarketSpace, USA, MarketSpace is a third-party digital App that allows customers to purchase vehicles 100% online.

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