May 2020 – Time to transition to online sales?

Time to transition to online sales

My Grandfather was addicted to tea. Every day he would have multiple cups, it was his thing. One day my Grandmother asked him, “what would you do if you were told you couldn’t drink tea anymore?”. My Grandfather was a no-nonsense man and he simply said, “well I will stop drinking tea won’t I”.

That conversation hits a cord for me and where we as a society, and as an industry find ourselves presently, following the last few months of the Coronavirus pandemic.

The last few months have seen our regular everyday activities, our abilities and our beliefs suddenly changed, or at least dramatically altered. Employment, the stock market, super funds, tenancy rates, have all been massively impacted. Whilst there is a light at the end of the tunnel for Australia and a return to normalcy will be forthcoming for us and the economy, we don’t know precisely when it will happen, or how long it will take. History shows us that ebbs and flows are to be expected, but what about consumer behaviour?

A key tenant of any successful business is the ability to adapt to changes in the market, so with the nation finding itself in lockdown, and the NBN seeing data demand peaking by 80%, are we about to see a dramatic shift towards higher online activity in the automotive sector, and a decrease in person to person interactions? Or will it be something of an each-way bet?

Some notable shifts in customer interactions have seen:

  • In the US, Ford’s performance division is planning what could be the country’s first live, virtual car show.
  • Safety considerations have obviously become front and centre, from how many people occupy a space, to sanitizing common areas. Now almost wherever we go, we see additional screens in place at service stations, bank tellers and the like. Bunnings no longer hand you a receipt and they are disinfecting their self-service consoles after each use. The sanitizing of used vehicles will likely step to a higher level, with a much greater emphasis placed on surface disinfection and air conditioning systems. New cars in showrooms are not being left unlocked and instead being opened on an as-needed basis, and are being disinfected after each viewing.
  • Store to door services may become the new norm, as dealerships offer pickup and drop off services to maintain service RO’s. Mobile servicing is on the rise, with dealerships also offering tyre and battery fitment, and car valuations. One DP in the US believes that “by the end of this year, you’re going to see 80%-90% of U.S. new car dealers with full e-commerce capability in their shops” to handle everything online but the test drive and – maybe – the final signature. Online sales have reportedly doubled in some sites, which is not all that surprising.
    Globally, consumers are shifting their online time as well, with forecasted increases in live news, video content, social media and online messaging. Decreases are expected in print media. Digital adoption of online streaming, grocery delivery, restaurant drive-through, curbside pickup, video conferencing and online fitness are all expected to dramatically increase. Consumers are actively taking up new ways of learning, procuring goods and services, and replacing traditional in-person activities.
  • Consumer behaviour post-Covid-19 is expected to drop for domestic travel, as well as physically shopping. Whilst this does not mean that dealerships won’t see a return of foot traffic to pre Covid-19 levels, it may indicate that consumers will have conducted more research into their prospective vehicle purchase, before visiting or reaching out to the dealership.
  • In the US, 93% of Ford’s 3,100 dealers are doing some or all aspects of sales online, from virtual tours to financing and home delivery. “This has just turbo-charged the adoption of those processes by both customers and the dealers,” Mark LaNeve (Ford US Sales Chief) said. “To be honest, I think a big chunk of that stays with us even when we’re through the crisis.”

When we see the lifting of local/domestic travel and social interaction restrictions, those who were previously interested in buying a vehicle and are still in a position to do so, including fleet customers, will hopefully prompt the return of enquiries. Given the record low-interest rates on offer, now is a fantastic time to purchase a new car, particularly if people are not going to be spending money on travel…

If the above trends hold true, dealerships will need to invest in strengthening their online presence and capabilities. Not only that, but they will need to also coach and mentor their staff, particularly in sales, on how to perfect the ideal sales presentation in an online world.

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