This is a pretty great time to have a car dealership in the US – customers bought 16.5 million autos last year and the used car market totaled 41 million cars and trucks.
Though both figures are expected to be on the rise this year as well, dealers have numerous woes – including the challenge to bring the customers into the showrooms. That’s because a growing number of consumers shop and even choose their next vehicle online, especially on mobile devices. According to a study conducted last year by global consulting firm McKinsey, buyers are now physically visiting on average just 1.6 dealerships before buying a vehicle – which is down from five just ten years ago. Additionally, four in five prospective buyers compare prices and cars from an average of 10 dealerships using third-party sites such as TrueCar, AutoTrader.com, Edmunds.com, eBay Motors and Dealer.com.
When it comes to millennials, or people born after 1980, about 50 percent of them that purchased a new vehicle in 2014 used a phone or a tablet. The increasingly digital retail environment poses now a real challenge – dealers need to convert the virtual online lookers into real buyers. For example, in December, TrueCar started offering an collecting data application that supports automakers in targeting customers by profile, activity and location – and it can even forecast who is going to purchase a new car, what they may get, from where and when. Dealers also have easy access to an array of personal data – such as customer credit history, income, insurance history and an array of other bits of information. Industry experts believe that automakers, dealers and lenders would move soon to personalize incentives based on the data already available on the buyer.