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'Bricks & Mortar' to 'Brick & Click' – Your New Car Purchase Maybe Online Online Retail Taking The Car Business by Storm

By Madhukar Manpuria

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Imagine shopping for your new car online. The difficulty to search for your next car, compare, schedule test drive, get the best quotes, instant finance, car exchange and buying your new car. Have you ever thought this could be possible and save you all problems by just a single click?

If you see the trend, car-buying behaviour is changing rapidly, disrupting the automotive retail. The digital savvy millennials are researching, shortlisting and buying cars with different expectations based on their digital buying experience of other products and services. According to J.D. Power New Autoshopper study, among automotive internet shoppers, 22per cent uses a social media site as a source while shopping for their new vehicle, which has gone up by 6per cent as compared to 16per cent in 2015. The most popular social media sites used by auto internet shoppers during the shopping process are YouTube (13per cent ), DealerRater (7per cent ) and Facebook (5per cent ). However, more than 49per cent of the people have already decided on the car model before even visiting a showroom.

The Auto retail is fast evolving from "Bricks & Mortar" retail to a "Brick & Click" omnichannel retail. The focus is shifting from just digital product awareness to digital car sales with the advent of automotive E-commerce platforms.

Why is This Shift Happening?

  1. Price - It is cheaper to buy a vehicle online as compared to the expenses of a 3S (Sales, Service, Spare) of a car dealership. The savings can be passed on to car buyers. It also replaces the stressful process of price haggling with the middlemen, which leads to transparent pricing, based on market dynamics.

  2. Convenience - It allows car buyers to compare car brands, look at the availability, pricing, test drive cars and buy it at a single click from the comfort of their home.

  3. Informed Decision Making - According to research from Facebook, US vehicle shoppers not only use mobile devices as they research new cars, they even prefer them for booking a test drive and the car itself. Most vehicle shoppers said mobile was a better way to ask friends and family about auto options, and about two in five preferred to book a test drive from a mobile device. A major percentage of people who use YouTube as part of their car buying process gets influenced by what they watch on YouTube. Millennials have taken a digital approach as they are increasingly critical of sales executives as they do not want to engage with the ones who are pushing a sales agenda rather than helping them to solve their problem. Millennials have started to make an informed decision based on the experience of their peers and expert reviews online.

Perhaps we can argue that by 2020, millennials will make comprise the majority of car buyers with 70per cent of auto sales to be digitally influenced. With this shift to "Brick & Click" car buying process, it is important to provide a seamless customer experience across the digital platforms as well as offline touchpoints (e.g. Test Drive, Dealership Visit, Delivery).

For now, most of the online platforms are working mainly with dealer networks and car manufacturers to provide a hassle-free end to end digital car buying experience.

With increasing adoption of digital technologies such as virtual car configurator and seamless integration of services offered by stakeholders across the automotive retail ecosystem, the shift to online car buying will be accelerated.

For dealers, this provides an opportunity to streamline their business by shedding non-value adding activities and infrastructure.

So, Do We Need Car Dealers in Future?

In-spite of the digital shift car dealers will continue to exist with their role changing towards brand experience centre and services providers - delivery and after-sales services.

But then with the electrification of vehicles along with the launch of self-driving vehicles, our new cars may just drive themselves to our homes after purchase!

Madhukar Manpuria

Founder and CEO, MYNEWCAR

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