COVID-era car buying habits here to stay

Vehicle trade-ins and financing are arguably two of the most complicated components of the car-buying process that in the past have prevented a simple "add to cart" and "check out" option. Now, getting a trade-in estimate is as easy as inputting your vehicle information and clicking a button for an instant offer. Financing can also be done quickly and easily through online calculators that break down costs. Interestingly, financing also is going mainstream in e-commerce with services that allow consumers to make monthly payments on products rather than completing an entire transaction at once, demonstrating there's a market for e-commerce financing beyond the auto industry. As consumers get more accustomed to financing with a click of their iPhone, they are beginning to not only get comfortable with doing the same for a larger transaction such as a vehicle, but they expect the same speed and convenience that most online finance and insurance options can't yet provide.

We're also seeing more successful e-commerce programs borrowing the trade-in model, whether for fashion or laptops, opening the floodgates for more usage and even a preference for the sophisticated digital vehicle trade-in process available today. Trading in a car is by no means as simple as trading in clothes, but with development in auto retail technology, it's making significant advancements.

Dealers putting stock into digital retailing solutions such as the ones mentioned above will continue to see the benefits as time goes on and more consumers seek a virtual car-buying experience, especially with more than 60 percent of shoppers wanting to do more of the purchase steps online compared with the last time they bought a vehicle.

The results of having these tools are staggering. For example, independent dealers who have digital retailing solutions saw 73 percent of their customers completing steps of the car-buying process online, whereas independent dealers who don't have digital retailing solutions only saw 17 percent of their customers doing the same.

Now that customers have a taste of how seamless and at their fingertips the car-buying process can be via digital tools, it's not likely we'll see a major shift back to pre-COVID-19 shopping. Consumers are accustomed to on-demand shopping, no matter the product, and they likely will not give up that convenience in a post-COVID-19 world. If enough dealerships are offering digital tools, then shoppers will continue to have the options they are expecting after the pandemic. And while the auto retail industry was somewhat of a laggard, much of the technology in use today is at the forefront of e-commerce innovation.

The pieces were in place before the pandemic, but the situation created an opportunity for dealers and customers to embrace a digital-forward future for auto retail.

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SHOPSMART AUTOS   CUSTOMER INFORMATION - DECEMBER 10, 2020

COVID-era car buying habits here to stay

When we think of shopping in 2020, there isn't a clear distinction between doing it online or in person. While e-commerce has slowly evolved over time, stay-at-home orders as a result of COVID-19 have expedited the process for many long-established bricks-and-mortar businesses to provide complete end-to-end online experiences. Transactions that might have sounded cumbersome to do online just a few years ago, such as adopting a pet or picking out an engagement ring, are standard online experiences today  and the auto industry is no exception.

Human-to-human interactions have been integral to car buying because of the significance of the transaction and the size of the merchandise. People like to try before they buy, especially when it's one of the biggest purchases a person can make. Now shoppers have access to things such as at-home test drives you can schedule online, and we're seeing the traditional showroom experience become less of the go-to.

These combined factors  evolving consumer preferences, innovation by the auto retail industry and a need for contactless transactions  have created an inflection point where, from this point on, auto retail will be largely online. This is further confirmed by COVID-19-specific research fielded by Cox Automotive that found two-thirds of new-car shoppers are comfortable completing the entire car-buying process online. The relationship-driven nature of the industry is not changing  with new online solutions, dealers and shoppers can form relationships even earlier in the process.

Typically, the first step in purchasing a vehicle is browsing for options, and new tools such as online video chat, to bring a customer closer to the dealer, are helping to move this step completely digital. We see this in other industries as well. Skin care companies provide online quizzes that match customers with products to fit their needs or allow them to upload photos to see what the product would look like on.

In addition to helping consumers find that right option, digital solutions can also help dealers identify potential buyers. Social media targeting is a great example of how multiple industries are generating quality leads during this first step of the process while remaining within the tight budgets this difficult time requires.

Once the consumer has found options that work, a test drive is almost always essential before purchasing a vehicle. We know people need to feel the car and kick the tires, and while this part of the process is impossible to move completely online, being able to schedule test drives online is a great start. At-home test drives are increasingly becoming an option in the auto industry, reflecting the trend of companies offering a free first month of their products for potential buyers. In the same vein, video walk-arounds are gaining momentum to eliminate the amount of time spent at the dealership.

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SHOPSMART AUTOS   CUSTOMER INFORMATION - DECEMBER 9, 2020

There's still time to get a deal if a used car is on your Christmas wish list.
According to vehicle pricing and analysis site iSeeCars.com, Christmas Eve is one of the best holidays for buying a used car. The company analyzed more than 48 million used car sales from 2013 to 2016, comparing months of the year and holidays to determine which times of the year offered more deals than consumers would find on the average day -- with a "deal" defined as savings of at least 5%.
Cars are one of the most expensive purchases families make, and savings of even five percent can mean $950 off the average used car price of $18,992<a name="_GoBack"></a>.
Christmas Eve produced seven times the average -- 35.6% more deals than the average day, trailing only Veterans Day (43.2%) and Black Friday (37.5%) for used-car bargains.
And don't overlook New Year's Eve, there are 30.2% more deals on used cars than an average day.
Shoppers looking for a bargain should consider heading to the dealership the last week of the month, whether they're looking for a new or used cars,Dealerships looking to hit a unit goal usually start to ramp up deals in the last week of every month, and December is no different.
There's been a lull in prices since Hurricane Harvey in Texas and Hurricane Irma in Florida destroyed countless vehicles and left their owners seeking replacements quickly. According to Cox Automotive estimates, used car sales spiked in September and October, with vehicles selling at a seasonally-adjusted rate of more than 41 million. Used vehicle prices also grew by more than 3% during that period, with the Manheim Used Vehicle Value Index -- a measure of wholesale prices adjusted for mix, mileage and season -- hitting a record high for the sixth-consecutive month in October.
Manheim now predicts that used-car prices will continue to plummet through December to make up for inflated September and October demand.
At Christmas, prices for the year tend to be lower when compared to other seasons, says Lisa Rosenberg, data analyst for used-car pricing and analysis site CarGurus. Used-car prices typically begin to rise in mid-February, she notes, as a build up to the busy spring shopping season, when taxpayers begin receiving their refund checks.
There are 38.2% more deals on average in December, but just 19.9% more in January and a scant 4.8% in February. From there, buyers start to pay a premium for shopping with more cash in nicer weather. In fact, there are 25% to 28% fewer used-car deals deals in April, May in June than there are at any other point on the calendar. That gives buyers some much needed leverage.
Dealers are trying to meet their annual goals in November and December, and are more likely to lower their profit margins in order to do so.
Fortunately, those who miss the main holiday shopping rush get additional opportunities to take advantage of sales surrounding New Year's Day [13% more deals than average] and on Martin Luther King Day [23.4% more].
What you gain in value, you'll lose in convenience. Dealers are under pressure to make sales goals, but they're also working on the same clock as everyone else. There's a reason they're so eager to make sales during winter holidays, for the same reason that car buyers may not be so inclined to head out to the lots.
In regards to Christmas and New Year's Eve, the only advice I could offer is if you plan to shop either of those days, get to the dealership early, The folks working there are just like us and are eager to get out of there and be with family and friends, and lots of dealers will have shortened hours both days.
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SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 8, 2020

2021 insurance outlookAccelerating recovery from the pandemic while pivoting to thrive

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WHAT a difference a year makes. Or even a few months. The COVID-19 pandemic and resulting economic fallout radically shifted consumer and employee needs, habits, and expectations, while compelling virtualization of insurer operations practically overnight. But while most of those in the industry adapted quickly, insurers are still likely facing lingering obstacles to growth and profitability in the year ahead.

A global outlook survey by Financial Services found that many insurers know they still have their work cut out for them, even after spending most of 2020 adapting to the outbreaks impact.

Pandemic losses hurt the property-casualty bottom line

The pandemic and other catastrophe losses hit many insurers hard in first-half 2020, especially those writing events cancellation and workers compensation. To illustrate, North American property-casualty insurers saw first-half annualized GAAP operating return-on-average equity fall to 2.8% from 8.3% the year before, in large part due to US$6.8 billion in incurred losses related to COVID-19 and concurrent drops in premium volume for key lines.<a href="https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html#endnote-1">1</a> Overall, the year-to-date total return of S&amp;Ps Insurance Industry Index lagged the broader S&amp;P 500 by 24.6% as of September 30, 2020.

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Given the pandemics impact on employment, business activity, and trade, global nonlife premiums are expected to be flat for full-year 2020, including a 1% decline in advanced markets.  The pandemic and its aftermath are expected to continue hitting some property-casualty lines harder than others. Workers compensation insurance sales, for example, were undermined by massive job losses,<a href="https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html#endnote-5">5</a> and Deloittes US premium projection suggests volume may not return to prepandemic levels until after the fourth quarter of 2022. In addition, small business premiums, battered by shutdowns and bankruptcies, may also be slow to recover if many more retailers, restaurants, and personal services outlets close down.

On the other hand, while many US auto insurers saw a significant loss in premiums after providing policyholders with rebates and rate cuts to reflect less driving during the pandemic, carriers may see improved profitability with an expected drop in accident frequency.

Growth and profitability in both annuities and many nonterm life insurance products will likely be impacted through 2021 and beyond by persistently low interest rates. The German 10-year yield, for one, is expected to remain negative, while the US Federal Reserve has indicated it will likely leave rates near zero at least through 2023. This could pose challenges, particularly for insurers with increased exposure to lower-rated, less-liquid investment-grade securities. The same goes for annuities, as lower interest rates historically prompt a reduction in benefits offered, which could make them a harder sell this coming year.

At the same time, life insurers may see 50% more losses on mortgage loans than what they experienced during the Great Recession.

While it was hoped the pandemic might at least raise consumer awareness about the value of mortality products, a J.D. Power study found that not necessarily to be the case. Despite COVID-19 fatalities exceeding 200,000 in the United States at the time of the study, consumers surveyed did not seem any more motivated to buy life insurance, due to a combination of infrequent client communications and a pervasive perception of high cost and transaction complexity. This indicates the industry likely has more fundamental issues to address to expand consumer awareness and market penetration.

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SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 7, 2020

The Key to a Happy Customer

1) When I first started thinking about buying a car, I scrolled through hundreds of pages of new and used cars on car dealership websites. I was eager to find a car in my price range that was the right size and shape for me. I enjoyed the feeling of going to the dealerships in person and seeing the cars from the website come to life! I enjoyed being able to take the cars for test drives with my family to local parking lots so I could try it out. I was happy that a worker did not ride with us so that we could speak freely about what we really thought about the car. I enjoy the feeling of sitting in a new car and seeing what it has to offer. Once I purchased the car I found more and more fun features that I didnt even know about. I was delighted to find out I could change the color of the floor lights and the lights in the cup holders! How fun!

2) The most frustrating part of car purchasing was overbearing car salesmen, dirty car inside and out (We will clean it for you before you drive it out of the lot), and locked doors. I wish there was a way to freely wander around the cars, open doors, check out different compartments, feel the seats and how it feels to sit in them, etc. These things are useful when purchasing a car, but are often tedious. At one lot I visited, we needed to ask the salesman to unlock a specific car, he then needed to walk all the way to the main office, find the key, walk all the way back out, and he then stood over us while my family and I examined the car. I felt like I couldnt speak my mind about the car because he hovered over us. Then once we were finished and wanted to look in a new car, tons of time was wasted while he walked back to the main building trade keys and come back. Overall it was frustrating how much time was spent there and how little freedom I had. We left that lot without purchasing.

3) A car buying experience with lots of freedom and exploring would make the car buying experience more enjoyable. Perhaps if a system was placed where each customer borrowed a tablet or iPad with all the car information, it would make the experience more pleasant. The tablet would have car information, price estimates, inside views, 3D tours of the car and a button on top that would call over a salesman if needed. This way they wouldnt hover until you had a real question. You could also request a key to a car to check inside, or request a test drive through the tablet. Customers could put their personal information into the tablet (In order to be approved a test drive) while the salesman came out with the correct key. A similar system which allowed customers more freedom and less hovering salesmen would be ideal so customers feel free enough to speak to family members about the cars without the annoying pressure of an overbearing salesman.

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SHOPSMART AUTOS  CONSUMER INFORMATION  DECEMBER 6, 2020

Why You Should Buy Yourself a Car for Christmas

If youre in the market for a new vehicle, get serious about shopping now. December tends to deliver the deepest discounts of the year, with buyers receiving an average 7.7% off MSRP, TrueCar.com findsvs. 6.8% in January, for instance. For an average buyer, thats more than $300 in savings.

Why December? Dealers and manufacturers are looking to meet their annual sales goals, so many offer rich incentives, says TrueCar senior analyst Cari Crane. Meanwhile, prices are slashed on 2016 vehicles as next years models move onto the lot, says Brian Moody, executive editor at Autotrader.com. Follow these steps to drive down the price of your new vehicle.

Hone your haggling

To do even better than the average December deal, shop when temperatures plunge. Cold, snowy days draw fewer buyers, giving you a further advantage, says Moody. End-of-day shopping can yield better prices, too, if a weary salesperson wants to go home. Also, because dealers and manufacturers have monthly as well as annual goals, you can save by waiting till the end of the month, suggests Cranealthough you risk a more limited selection, particularly on 2016 models.

To set an upper limit, use Kelley Blue Books Price Advisor to identify a vehicles fair purchase price: what youd realistically expect to pay. Then get bids from three or more dealers. If you do it online to save time andavoid in-person sales pressure, specify the options you want so that you get true comparisons. (If youre looking for specific features on 2016 models, you may need to cast a wider net, says Cars.com executive editor Joe Wiesenfelder.) Say upfront that you wont pay fees for marketing, administrative, or dealer prep (often just car washing)all of which are negotiable. And haggle on price, not monthly cost, says Jack Nerad, Kelleys executive editorial director: You dont want the dealer to lower payments just by extending the loan term.

Finally, ask for extra discounts. Many automakers give rebates to students, seniors, and military, for example. These incentives are typically not promoted but can range from $300 to $1,500, says Nerad.

Cut borrowing costs

To trim the cost of your loan, if youre not paying cash, get a baseline quote from your bank or credit union and compare it to automaker financing. The latter is likely to be the <a href="https://wallethub.com/edu/auto-financing-report/10131/">better deal</a>. Because car manufacturers want to be a one-stop shop, they offer aggressive interest rates, says WalletHub analyst Jill Gonzalez.

In September, for instance, the average rate on 36-month new-car loans from manufacturers was 1.45%, vs. 2.2% at credit unions and 4% at regional banks, WalletHub says. Gonzalez predicts automakers will trim rates even further by year-end, trying to lure buyers.

Aim for resale

If you dont plan to drive your new vehicle into the ground, look for a car with higher-than-average resale value. Start with the right model: Both Edmunds.com and Kelley Blue Book track those that hold their value.

Make It A Champion Day!

Retailers race to adapt, go digital

To captivate consumers' attention, retailers will need to rely on AI-enabled capabilities. For example, to drive customers back to their storefronts, physical retailers can start with tapping into digitally-enabled touchpoints like contactless payments and buy online and pickup in-store (BOPIS) to accommodate consumers' need for convenience and safety. While online, the use of self-service capabilities like AI-enabled chatbots will be vital for helping customers to find products or track a package with ease.

As summer comes to a close and holiday promotions gear up, companies will need to be more proactive and agile in addressing customer expectations and needs via online channels. Pre-holiday is the time for brands  big or small to invest in data, technology, and systems that enable exceptional shopping experiences on-and-offline.

A pandemic christmas: What to expect

Social distancing has become part of the new norm, and customers will demand that retailers rethink and readjust the in-store shopping experience accordingly. For brick-and-mortar retailers, omnichannel capabilities like curbside pickup and BOPIS will be essential avenues to explore for the holiday season. Particularly for last-minute shoppers  where two-day shipping isn't fast enough or is otherwise impacted by shipping delays with the pandemic  who will seek out the convenience of ordering online or via mobile and picking up inside or outside a physical store within a matter of hours. Retailers should also look to implement contactless technology like mobile payments or self-checkout kiosks to make consumers more comfortable returning to in-store shopping.

On the online side of the spectrum, because consumers are now online for extended periods, winning mind share, and wallets will be more of a digital race than ever before. One way to ensure shoppers enjoy a streamlined digital shopping experience is by providing fast online checkouts accompanied by free or expedited shipping options. With just 29 days between Thanksgiving and Christmas this year, consumers will flock to the retailers that offer the best last-minute deals and shipping options at the click of a button.

AI saves the day

With the volume of online orders expected to surge this holiday season, last-minute delivery has a whole new meaning for retailers. Now is the time for retailers to troubleshoot logistic and inventory issues to ensure their operations are running like well-oiled machines. The ability to deliver packages on time will make or break retailers as they run the risk of disappointing customers and losing their business.

Retailers across multiple categories are feeling the economic blow of the pandemic. As we get closer to the holiday season, more retailers will file for bankruptcy, while others will make great strides in regaining their footing.

More than ever, retailers will need technology to enable every touchpoint of the buying experience. Refining BOPIS operations and deploying contactless technologies will provide convenience and ease for in-store holiday shoppers. As for the online holiday shopper, they will gravitate towards the retailers that offer a seamless experience from start to finish and deliver with speed. Last year's holiday playbook is irrelevant, and retailers must plan accordingly and invest in the right technologies to ensure they're providing customers with the holiday joy they seek.

Make It A Champion Day!

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SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 5, 2020 - 2

The impact of COVID-19 on consumer buying behavior has been extensive and quick. Spending across most industries has decreased, purchases have shifted from in-store to digital channels, and public safety has become the priority for brands and consumers alike.

As retailers prepare for the long haul of what we now call the "new normal," the desire to win the upcoming holiday season is higher than ever before. To succeed, retailers must focus their efforts and investments on understanding and catering to consumers' demands and behaviors. Come November, those who are still testing technology or channels will fall behind the pack. To set themselves apart, retailers need to roll with changing consumer behavior and, with in-store shopping making up a smaller portion of holiday shopping, enhance every digital touchpoint.

Before we delve into the current customer and retail landscape, let's take a trip down the memory lane and examine the challenges and triumphs retailers endured last season.

2019 holiday shopping: Healthy, despite recession threat

Despite a late Thanksgiving and concerns about tariffs, consumers did not shy away from shopping during the 2019 holiday season. The U.S. economy's strong employment numbers, high wages, and steady household incomes all lead to a healthy holiday season. In fact, according to the NRF, during 2019, holiday sales increased by 4.1% over the same period in 2018 to $730.2 billion.

Although customers were doing their part to keep the economy moving, rumors in 2019 of a potential global recession prompted some to express caution when shopping. Yet, once January rolled around, the retail industry saw a nice bump in sales overall. This momentum was short-lived as the pandemic hit and caused a global recession. As a result, the average American consumer felt the strains of unemployment and economic uncertainty and became frugal with spending.

2020 looks different: COVID pushes shoppers online

Heightened fears of the pandemic, along with social distancing and continued lockdowns, have shifted shoppers' preferences and pushed them online. In fact, at the onset of COVID-19, the products and categories consumers gravitated to drastically changed. A newly released buying behavior report noted that amid the pandemic, 1 in 3 customers reduced their spending on fashion, electronics, and home decor.

Even as stores begin to reopen, the report data suggests 82% of shoppers plan to continue shopping online. The global health crisis has pushed unconventional social norms to the forefront and birthed an entirely new segment of first-time online shoppers, forcing them to adapt and assimilate new methods of shopping. To capitalize on the digital traction channels will receive this holiday season, retailers need to begin planning earlier than before. And, with 26% of respondents in the same report indicating that they plan to make substantial cuts this holiday season when shopping for gifts, the race to win consumers' dollars has higher stakes than ever.

SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 5, 2020 - 1

Do people really buy cars as holiday gifts?

Its that time of the year when youre bombarded with TV advertisements making you feel like a bad person if you dont buy your partner a brand new car as a gift. And, of course, present it with a giant red bow on top.

The tradition of commercials that tug at heartstrings, rather than the more shouty Buy Now! Massive Discount! style of car ads, goes back to Lexus. That brands December to Remember holiday ads <a href="https://www.prnewswire.com/news-releases/lexus-december-to-remember-campaign-returns-for-its-20th-year-300949572.html">have been running for 20 years</a>.

The idea was to essentially to get people to think that maybe a car purchase during Christmas was the perfect gift, said Karl Brauer of Kelley Blue Book.

A Lexus sedan starts at $38,000, so its a pretty nice present. The company says the ads work. In 1998, December was Lexus 10th best-selling month. By 2000, it was top.

Consumer psychologists say auto companies and dealers recognize that people indulge each other  and themselves  during the holidays. Spending is in the air, and theyre primed to buy.

Self-gifting and treating is really much higher during December than any other time of the year, said Kit Yarrow, author of Decoding the New Consumer Mind.

The figures show people are buying cars. Over the last six years, sales of luxury vehicles have spiked at the end of the year, according to research from Cox Automotives mobility group.

So it makes complete sense that theyre the ones offering these year-end sales events, because theyre wanting to trigger an even higher consumer demand for purchases before year end, said Rachelle Petusky, senior manager of research.

Vehicles sales <a href="https://www.autonews.com/sales/us-sales-rise-22-dec-saar-hits-2018-high">ticked up 2.2% in December</a> last year. Some of the year-end increase is because dealers do give good deals as they look to meet targets and move old model-year cars.

A word of caution though if you think buying a car as a gift is going to make someone really happy. It might not work out that way.

Every holiday season, I interview consumers about whats the best gift and whats the worst gift youve ever been given, Yarrow said. Ive had two people say they got a car for Christmas, and it was the worst gift theyve ever been given.

She said typically people like to be involved in the choice and purchase of cars. Plus, if its the family car, its not so much a gift as something that will have to be paid for, every month, for the next few years.

And if you do decide to make it a surprise, dont forget the bow  sometimes dealers run out.

Eric Lyman, chief industry analyst at ALG, a TrueCar subsidiary, says his brother-in-law bought a car for his wife and was told there were no bows left.

He was pretty disappointed, Lyman said. The car was a white car, so it was the ultimate Christmas gift, this big snowy white vehicle  without the red bow.

So if you do want the full fantasy car-gifting experience this year, make sure youve got the red ribbon all tied up, too.

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Make It A Champion Day!

SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 4, 2020

SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 2, 2020

But creating a truly engaging online experience that compels people to visit a physical retail location can be harder than it looks. Many dealers complain that manufacturers exert too much control over their online presence by using standard website templates, while manufacturers are frustrated by the wide variety of dealer management systems (DMS) applications among dealers that ultimately waters down their vision for a seamless, integrated Web experience. Perhaps as a result, study results show that more than half of all auto shoppers find manufacturer and dealer websites to be merely meeting expectations.

The good news is that ample opportunity exists for brands and dealers to create a differentiated digital experience via their websites, potentially adapting useful ideas from sectors such as consumer electronics and online retailing. Building a strong bridge that facilitates a seamless move from online research to a physical shopping experience can be an especially important goal. For example, making sure any information and preferences people input online follow them into the dealership can significantly streamline the salespersons discovery process. Also, keeping critical information, such as vehicle pricing, consistent between the Web and the dealers showroom could enhance the buyers experience by improving his or her perception of dealer transparency and integrity.

A compelling argument also exists for digital investments that directly address customer pain points in the vehicle-buying process. Study results confirm the long-standing notion that people dislike excessive paperwork and the overall length of time it takes to buy a car. Digital tools that streamline these processes, such as used vehicle valuation algorithms and remote document e-signing capabilities,<a href="https://www2.deloitte.com/us/en/insights/industry/automotive/digital-technologies-transform-car-buying-experience.html#endnote-1">1</a> can elevate the overall shopping experience. They may even increase the likelihood of a sale by reducing the amount of time customers are exposed to anxiety-inducing aspects of the purchase process. And they can also provide the necessary conditions for effectively transitioning the customer into a long-term service relationship.

Companies should also recognize that many people shopping for their next vehicle have yet to fully embrace digital sales aids as the primary means of researching a purchase. Study findings show that vehicle shoppers across all generations prefer more low-tech information tools while they are in a dealer showroom. In fact, 80 percent of US vehicle buyers rate conversations with salespeople as the most useful information channel, followed by printed brochures and spec sheets (figure 2). This preference for traditional information tools could be attributed to a number of factors, including a consumer base that does not yet fully understand or appreciate the types and benefits of enhanced user experiences these technologies can create. This suggests that good customer handling fundamentals are still the foundation of a truly exceptional customer experience, which can then be enhanced by the judicious use of digital sales aids that increase convenience, transparency, and flexibility.

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SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 2, 2020

SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 1, 2020

Some of the best experiences people have in their lives are those that are customized and connected to them on a personal level. These days, people increasingly expect to have such experiences across all of their brand interactions, whether its paying for coffee, ordering groceries online, booking travel, or buying a car.

One way that companies are meeting this challenge is by integrating advanced digital technologies into the buying processand automotive companies are no exception. Many automotive manufacturers and dealers in the United States are making significant investments in a variety of consumer-focused digital technologies, ranging from tablet-based product guides to virtual reality (VR)-enabled applications with an eye to increasing customer engagement on the showroom floor. The intent is to update and improve a sales process that has not changed for the better part of a century. But which digital investments will yield the most significant returns?

This question is the more difficult because manufacturers and dealers differ in the outcomes they need from digital transformation at the retail level. Generally, manufacturers are looking to large digital investments to drive overall mobility strategies aimed at reshaping the way consumers engage with their brand. On the other hand, dealers are typically pursuing much more immediate digital solutions to drive operational efficiencies, reduce overhead, empower sales staff, and increase transparency while reducing friction in the sales process. Whereas manufacturers are investing to create omnichannel customer experiences, dealers are more focused on tactical solutions that integrate disparate data systems to ease information flow across the dealership.

This lack of common ground often leads to disagreement between manufacturers and dealers on the best approach to digital implementation. However, our experience suggests that both parties could benefit from thinking more collectively about digital transformation, particularly in the upper-to-mid funnel where consumers are still researching a potential purchase online. Results from the 2018 Deloitte Global Automotive Consumer Study indicate that, out of all sources of information, brand and dealer websites have the greatest impact on new car-buying decisions (tied with input from family, friends, and coworkers; see figure 1). The importance of identifying, intercepting, and influencing potential buyers online is underscored by the fact that half of US auto buyers do not engage in any dealer cross-shopping after they first visit a showroom. Indeed, 30 percent buy a vehicle the very same day they step onto a dealers lot. Being top of mind when people first head out to kick some tires can thus significantly increase the odds of a sale.

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SHOPSMART AUTOS  CUSTOMER INFORMATION  DECEMBER 1, 2020

The automotive consumer journey is one of the most complex of all industries. Although customers still purchase their vehicles at dealerships, most of the decision-making and influential moments happen beforehand online.

According to Google, <a href="https://www.thinkwithgoogle.com/marketing-resources/auto-digital-retail-trends/">95%</a> of vehicle buyers use digital as a source of information and it takes <a href="https://www.iabuk.com/sites/default/files/research-docs/Weve%20Automotive%20Research%202017.pdf">65%</a> of buyers just 3 weeks to research online. In fact, twice as many start their research online versus at a dealer.

When car buyers start their research, 6 out of 10 are undecided and open to different model and vehicle options. However, by the time they actually make it to a dealership, they often already know the vehicle they want to purchase.

When it comes to what content they consume, video research is seen as the most popular and effective format for encouraging brand consideration. Views on YouTube of test drives, features, and options, and walk-throughs have doubled in the past year, with <a href="http://tubularinsights.com/70-percent-car-buyers-influenced-youtubeube-for-research-are-influenced-by-video/">70%</a> of people who used YouTube as part of their car buying process were influenced by what they watched.

When researching, consumers don't look for information on auto brand websites alone, they visit comparison sites to check prices and user reviews before even setting foot inside a dealership.

<a href="https://b2b.autotrader.com/oem/wp-content/uploads/2018/03/2018-Cox-Automotive-Car-Buyer-Journey-Brochure.pdf">56% of new </a><a href="https://b2b.autotrader.com/oem/wp-content/uploads/2018/03/2018-Cox-Automotive-Car-Buyer-Journey-Brochure.pdf">buyers</a> most commonly start at a third-party site and end up at a dealer website.

Year on year, traffic to automotive research sites has increased by <a href="https://www.slideshare.net/adobe/adi-2016-automotive-report">12%</a>, while dealerships have seen a 2% decrease to their websites. Websites such as <a href="https://www.truecar.com/">TrueCar</a> and Edmunds provide customers with relevant and timely information in a few simple clicks.

This rise in popularity of neutral information sources demonstrates the significant need for dealerships to provide the necessary information for customers in a seamless and accessible way online, so they dont have to fish in another pond.

Video is making the car buyers research process much easier while creating an experience that is much more relevant and personalized.

From virtual test drives, 360-degree views of the interior, or exterior walkarounds. <a href="https://www.thinkwithgoogle.com/advertising-channels/video/automotive-brand-loyalty/">56% of car buyers</a> said they could be convinced to buy a car from a 360-degree video without even having to drive the vehicle.

A perfect example of this is BMWs video campaign #BMWSTORIES. The idea behind this campaign was to showcase their customer's personal stories, and how the BMW brand helped them in through their emotional, real-life journeys.

With 33 videos in total, which have received anywhere from 7K to 14M views on each video. #BMWStories drives, on average, a 5x engagement rate compared to the average automotive brand.

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