How can digital commerce enhance the car buying experience?

For many consumers, today’s journey of buying a car begins online rather than in a showroom. Like most sectors, the COVID-19 pandemic put many auto dealerships on the back foot, and they had to find new ways to reach customers. Both dealers and customers wanted the showroom experience maintained, but in the comfort and safety of their homes, so relying more on technology was a logical step. And the greater reliance on digital experiences has had a lasting impact on purchasing behaviours.

In fact,  according to Google research, nine in ten (92%) car buyers say they now research online before committing to a purchase. They are also showing growing interest in video meetings with sales people (37%), visiting showrooms virtually (35%) and more access to online purchasing options (32%). So, good digital purchasing experiences are clearly paramount to customers, and can be the difference between a dealer or brand making a sale versus competitors.

Digitising the purchasing experience

All automotive businesses are exploring digital commerce platforms to make it easier for them to run their operations and enhance the experience for both consumers and fleet customers. Consumers are now well used to using digital commerce sites for smaller ticket items such as clothing and furniture, but fewer would have used them to purchase a car. AI technologies have unlocked opportunities for the industry to offer customers the ability to visit a showroom virtually and browse cars from home.

Technology is allowing customers to make comparisons at the click of a button, eliminating the need for showroom visits, saving time, enhancing convenience and reducing cost for customers. There are benefits for dealers too, but many of the physical experience opportunities that would traditionally have enabled them to differentiate themselves are becoming less important.

Good digital purchasing experiences are clearly paramount to customers, and can be the difference between a dealer or brand making a sale versus competitors

But it’s not just consumers that are recognising the benefits of digital enabled buying experiences; business buyers are also increasingly turning to them. In fact, VTEX recently surveyed 250 UK business buyers from a range of sectors and found that six in ten (56%) are already making at least 40% of their purchases online. Interestingly, business buyers are not just using digital commerce sites for small-ticket purchases: more than a quarter (26%) are willing to spend up to £50,000 (US$57,000) in a single transaction and 8% are happy to spend over £500,000. Despite an increasing appetite for purchasing products online, over half (52%) of the business buyers surveyed said that the digital commerce capabilities of B2B brands are lagging behind that of consumer brands, clearly demonstrating that there is an opportunity for auto dealers and OEMs to capitalise on this experience gap.

Digital automotive buying platforms can also help streamline elements of the sales process and provide greater customer insights. This equips sales teams with the knowledge they need to facilitate quicker sales and maintain the stock that meets customer demands.

 Benefits in motion—Mazda UK

One automotive company that has been responding to these shifts in automotive buying trends is Mazda Motor Europe. The Japanese manufacturer is transforming its digital commerce operations to make it easier for consumers to search their vehicle stock and has recently introduced new technology across all its UK dealerships which has proved really effective.

Working with the team at VTEX over the past year, Mazda Motor Europe has developed a digital commerce platform to support its UK dealership network that has seen its conversion rate from reservation to sales grow up to more than 75%.  First hand feedback from UK Mazda dealers shows they are benefiting from better qualified leads and their sales are more efficient.

Partly due to COVID-19, many more Mazda customers are using digital channels to inform their buying decisions. In response, Mazda UK recognised there was a missing piece in its customer journey when it came to checking the availability of stock and used technology to solve this problem. It now offers a complete buying experience for new cars that satisfies customer and dealer needs.

The initial step in transforming its buying experience has generated some great feedback from Mazda dealers and customers.  About 60% of customers are coming via dealer websites to the stock locator and sales conversion rates are around 85% for these customers. Dealer feedback has also been very positive, and they are now eager to extend the functionality available within the online customer journey.

Yet, Mazda recognises the use of digital commerce does not spell the end to physical showrooms. It acknowledges showroom experiences will still play an important role in purchases, but as people now engage in a higher level of research before entering the dealerships, the online capabilities enable them to get more done online before arriving in-person.

The digital commerce opportunity for automotive businesses is driving unprecedented change within the sector. We are seeing those OEMs and dealership groups successfully embracing more personalised commerce experiences growing their customer base and strengthening loyalty, even in challenging market conditions.

As well as allowing businesses to expand their reach online, digital buying platforms can help sales teams access a new wealth of data  and unlock new opportunities to offer customers more personalised offers and experiences. With both consumers and fleet customers increasingly demanding more choice, sellers need flexibility within their technology strategies and partnerships that will allow them to keep up with the pace of change and continuously look to remove friction in their processes. This is critical to driving enhanced car buying experiences through digital commerce.

About the author: Khalid Khan is  Head of Sales, UK, at VTEX