Will Digital Auto Retailing’s Current Popularity Wane?

TrueCar.com CEO Michael Darrow hopes auto retailing “doesn’t fall back on the adage that cars are too complicated to sell online.”

That was a common claim when the Internet was picking up steam in the retail space.

However, Darrow (pictured below, left) and others in the car business are pretty sure digital auto retailing is here to stay and won’t fade in consumer popularity.  

It particularly gained traction last year during the COVID-19 pandemic when many virus-conscious consumers opted to car shop online at home, rather than in person at a dealership. 

“COVID really accelerated (online auto retailing),” says Marcus Casey, who is in charge of e-commerce at BMW. To maintain the momentum, he says, “We have to put in more building blocks to help customers along the (buying) journey.”

He foresees most customers opting for a hybrid model. That means they will do some or even most of their shopping online, then go to the dealership to take a test drive, ask some questions in person and ultimately seal the deal.  

The in-store part could take only minutes, say Casey, Darrow and other panelists participating in Automotive Retail 2021, a virtual conference hosted by Reuters. The panel discussion is at a session entitled “The Digitalization of the Car Buying Process.”

Some consumers rely on the Internet more than others, says Steve Wittman, chief digital officer for dealership chain Sonic Automotive.

mike-darrow-truecar RESIZED

Something to avoid like poison ivy is expecting customers who have done their homework online to restart the process when they visit the dealership. “You can’t redo steps,” Wittman says. “You have to keep moving forward.”

Tracy Cassidy, executive vice president at Penske Automotive Group, agrees. Some customers may do 50% of the car-buying process online, others may do 75%, she says. “Either way, you want to make sure everything is all set when they arrive at the dealership. That way, their time there can take only 30 minutes.”

A step-by-step online process that allows Internet users to, among other things, check out inventory, negotiate a price and finance a purchase “is the way consumers have wanted to buy cars for a long time,” Darrow says.

Car-buying websites now feature chat tools and artificial intelligence, notes Cassidy, although she’s ambivalent about those additions. “Chat and AI don’t seem warm and fuzzy, yet they’ve come a long way.”

Digital auto retailing allows consumers to “shop and research at their own pace,” Darrow says. “Customers want to be helped, not managed online. There is great AI technology that can answer inventory questions and things like that when someone is shopping for a car at midnight.”

He contends a good digital process reduces price negotiating. “If a dealer sets a fair price and gets consumers through the digital process easily, then the customer will be happy.”

Noting differences among consumers, BMW’s Casey says some people are content to do virtually everything online because they know what they want. “Others may change their minds when they get to the store.”  

Wittman says: “Each customer is unique and chooses their own path to buy a car.”

Steve Finlay is a retired WardsAuto senior editor. He can be reached at [email protected].