This crazy year is bringing big disruptions to the automotive industry, from major changes that will move growth, revenue, and profits higher for automotive sales, to a flurry of vehicle launches and a big increase in online vehicle sales.
“This has been a year of changing and pivoting,” said Lisette Gole, head of automotive retail at Google and YouTube in a recent YouTube Livestream with Digital Air Strike, “Drive, Reach and Action with YouTube.” “The next four years we will see more vehicle options than we ever had. We’re at a moment of change. It comes to having to adapt and adjust.”
These major disruptions in the auto industry include, according to Google:
- A forecasted 400,000 decline in new vehicle sales by 2023, which is pre-COVID data. During the pandemic, many Americans are now rethinking vehicle ownership. There are 15.7 million people aged 25-54 who do not own a personal vehicle in the U.S., and 20% of these people are now considering buying a vehicle, according to Cars.com. The percentage of first-time buyers and additional car buying have increased as customers prefer personal vehicles over public transportation.
- At least 240 new vehicle launches expected in the next four years.
- By 2025, an estimated 1.5 million electric vehicles will be sold every year with a majority having some sort of autonomous features as well as options to reserve and buy online. This includes autonomous tech such as features to help you park your car.
- Nearly 10% of new vehicle sales in the first quarter of 2020 were online, which is up from just 1% in 2018.
“This means that innovation in the retail experience is helping us have a frictionless retail experience,” Gole said. “Auto buyers are driving this change.”
This virtual retail experience, which means the infrastructure allowing the purchase is mostly online, has only increased from customers doing more of their shopping and researching from home during the pandemic.
“We’ve been moving towards this online push for a while,” Gole said. “This year has pushed that further.”
Google’s “New Car Buyer Survey” from July 2020, shows:
- 73% are comfortable negotiating the purchase, lease or financing terms completely online or with a mix of online and offline.
- 66% are comfortable experiencing the vehicle (such as feature highlights, walkarounds) completely online or with a mix of online/offline.
- 52% are comfortable getting their vehicle delivered to their home without physically visiting a dealership.
According to Digital Air Strike’s 8th annual Automotive Digital Retailing Consumer Trends Study, 42% of car buyers and 35% of service customers say they’re ready to buy completely online. This is up from 39% in the prior survey. It’s important to recognize customers already prefer to handle the discovery, research and inquiry process online, so making the purchase online is not far off. Improve the online experience by giving customers instant information and excellent service.
With any new large change, it takes time to adopt from both sides. Recent new vehicle purchasers have their own opinions on the future of the vehicle purchase process, and most of that is with more online options, according to Google.
For example, 67% expect enhanced dealership communication online, while 65% expect to have more online options to purchase a vehicle.
“The strategies and the platforms dealers are using are also going through a disruption,” Gole said.
Shoppers are watching online video at every stage of the buying process, according to Google.
- 40%+ say video helped them discover a vehicle they weren’t aware of or considering.
- 55% used video to ‘learn more’ about vehicles they were considering.
- 60%+ visited a dealership or their website after watching a video.
“This allows them to take action, not only online, but offline as well,” Gole said. “People are taking action. This is moving them into dealers’ showrooms.”
Online videos are driving action in the consumer journey. For example, 66% of 2020 new vehicle purchasers watched online videos of vehicles they considered, and YouTube was the No. 1 place they watched them.
While consumers are searching for videos online, dealers can be more proactive by creating and sending videos of vehicles to customers. Videos can include vehicle walkarounds, outlining specific vehicle features and sanitization procedures for cars being serviced, as well as mask mandates and social distancing procedures at your dealership.
Eight in 10 people took an action after watching an auto-related video. This includes searching online for more information, visiting a dealer website, scheduling a test drive and pricing a vehicle.
When shooting video, reaching the right audience for your goal is key. For example, focus your videos on life events, showing off a bigger vehicle for people who are about to have a baby or getting a new dog. People are always searching for videos that relate to changes in their lives, Gole said.
“More shoppers are online so it’s becoming more important to have videos,” she said. “They have a lot of options. You want to make sure that your brand is at the forefront.”
Digital Air Strike’s Video Logix technology provides an easy way for businesses in every vertical market to record, send and track videos for customers. Learn five easy ways to add video to your business in this Digital Air Strike blog.