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The pandemic catalyzed a transformation in the automotive industry—the rise of online car shopping. This shift has not only impacted how cars are bought and sold but also created opportunities for dealers to expand their reach, improve the customer experience, and drive growth.
How people shop for new and used cars hasn’t just shifted, it’s been revolutionized. For the past several decades, the retail model has been basically the same. Now that consumers are demanding a new way of car shopping companies are innovating like crazy.
A study by Urban Science reveals that U.S. auto dealerships are thriving in the recent post-pandemic digital landscape.
In 2023, the number of physical dealerships increased by 90 to 18,347, while the number of brands offered by those dealerships decreased by 3.3%. This represents stability as the fluctuations are relatively minor and consistent with historical cycles.
As e-commerce accelerates, Progressive reports that online car buyers are 20% more likely to be highly satisfied with their experience than in-person buyers. This is a clear indicator that online car buying is a new normal that’s here to stay.
Key advantages of digital automotive retailing
In the robust digital world, car dealerships have unique advantages. By viewing the new landscape as an opportunity, rather than an obstacle, dealerships have the opportunity to prosper.
Advantage #1: Your local market is now nearly boundless
More people than ever are buying new and used cars online, virtually expanding your target market, especially if you provide home delivery services. As reported by Forbes, global online car sales are forecasted to reach an impressive 7.3 million units in 2024.
Online car sales are on an upward trajectory, echoing the broader trend of digital transformation. As dealers start providing shipping estimates and home delivery options on their websites, they essentially expand their consumer base from a local radius to a nationwide audience.
The future of the car industry is moving in a direction where completely digital experiences and transactions play a major role in total new car sales. Current research predicts that the online car market will reach $563.8 billion in 2028 at a CAGR (2023-2028) of 11.1%.
Advantage #2: Showroom sales acumen transfers to social platforms
Your sales team already knows how to engage customers in person, social media is simply another environment. Being active on platforms like Facebook, Instagram, YouTube, Google, and Yelp gives your team the chance to share updates, promote deals, showcase your inventory, and connect with your target markets. These interactions help build brand loyalty and keep your dealership top-of-mind when customers are ready to make a purchase.
Nearly 1 in 3 social media-savvy car buyers proudly share their new ride online. Encourage your customers to hashtag your dealership, tag your profile, or leave a review to expand your organic reach and build brand advocacy. This type of social proof instills trust and can significantly impact a potential buyer’s decision.
Customer reviews and ratings should be a key component of a dealership’s online reputation management strategy. Industry data shows that most prospective car buyers read at least 10 reviews about a specific dealership during their research phase. A positive review can motivate potential customers and boost your traffic, while negative reviews can give you valuable feedback for improving service.
Satisfied customers can end up becoming ambassadors for your dealership. This makes it essential to focus on delivering excellent customer service to generate positive reviews and enhance online sentiment.
Advantage #3: Reverse auto logistics is already in place
Fewer consumers in physical storefronts mean fewer trade-ins and lower inventories of used cars to sell. According to data from S&P Global Mobility, the average age of a passenger vehicle on the road hit a record 12.5 years in 2023.
With fluctuating used car inventories and steady consumer demand, retailers are finding new ways to source vehicles. Auctions are an obvious choice, but some dealers are now buying inventory directly from consumers.
Reverse auto logistics is being used for trade-ins, returns, and even vehicle acquisitions to help stabilize used car inventory. Dealers are buying from consumers and picking up vehicles right in their driveways.
As the leader in single-unit vehicle moves, Montway is an ideal partner for reverse logistics. Montway can arrange to pick up cars and trucks anywhere in all 50 states and have them delivered to the dealership, auction or anywhere they need to go.
Advantage #4 Your website can do the heavy lifting
When looking to potentially purchase a vehicle online, many consumers will start their shopping journey by conducting research, customizing vehicle options, and then finishing their purchase in a physical dealership. But now, many want a seamless car buying experience completely online, requiring dealerships to transport vehicles to consumer homes or other designated locations.
Dealers should think about how to integrate the online and in-person environments to give consumers a consistent and personalized experience. For strictly online buyers, providing door-to-door shipping estimates, vehicle delivery, and trade-in pickup are essential.
Is a virtual showroom an option for your dealership? Leverage advanced visualizations and detailed descriptions to showcase your vehicles, encouraging shoppers to explore and purchase. Virtual test drives can be an exciting feature for your online storefront. This feature enhances the customer experience and builds trust and confidence in their purchase decision.
An optimized search engine strategy is also crucial for improving your online visibility and attracting more customers. This involves using relevant keywords in your website content, optimizing your site’s speed and mobile-friendliness, and creating high-quality, engaging content that answers your customers’ questions.
Advantage #5: You’ll be ready for the next disruption
Dealerships have done an impressive job of accelerating their digital strategies. As we look towards the future, it’s clear that the automotive industry will continue to evolve. With the rise of electric vehicles, autonomous driving technology, and car-sharing platforms, dealerships must stay dynamic and adaptable. Continued investment in digital transformation strategies and embracing emerging technologies will be the key to resiliency.
How else can dealerships be prepared for just about anything? Get the right logistics partner in your corner and keep them there. Pick one with the resources, technology, and innovative acumen to bring you the solutions and services you need when you need them.
Efficiencies, opportunities, and options abound for auto retailers
Consumers want a more convenient and efficient experience that includes buying online. Dealerships are taking notice by embracing digitalization. They are updating their websites, renovating their showrooms, getting resourceful with inventory management, and providing home delivery.
Vehicle home delivery is an essential part of a successful digital auto retail program. Consumers are demanding it and they’ll get it from one retailer or another. Offer your consumers a more pleasant and streamlined car shopping and buying experience that includes home delivery and trade-in pickups.
As a tech-forward company, Montway is constantly innovating to help dealerships meet changing consumer demand and buying behavior. Our flagship solution, the Montway Automation Portal, is a game changer. It offers the clarity and insights necessary for efficient inventory management. By utilizing our platform, dealerships have the opportunity to expand their local markets, gain transparency during transit, and reduce the time spent transporting units by one-third.
The Montway Automation Portal (M.A.P.) provides significant benefits to dealer groups. By offering a view of critical metrics, M.A.P. helps CFOs and fixed operations managers identify ways to lower the rate-per-mile and reduce cycle times, thereby improving profit margins and enhancing operational efficiency. Possessing these benchmarks also ensures that vendors adhere to service levels and encourages continuous performance improvement.
As the industry navigates this digital era, dealerships must stay ahead of the curve, anticipate customer needs, and continue to innovate in their digital strategies. Those who understand key automotive metrics and focus on streamlining operations and enhancing financial resiliency will be well-positioned to thrive in this new landscape.
Montway Auto Transport can help you identify opportunities for increased efficiencies, closing the gaps where needed to save you time, frustration, and resources—all while pushing you closer to the front of the digital automotive pack. Learn more about Montway Auto Transport’s business solutions at Montway.com/logistics or call 888-997-8993.