E-Commerce: How Car Dealerships Can Survive the Mass Closures

Alarming figures according to a study by the consulting firm PricewaterhouseCoopers (PWC). The reasons for this include generally lower sales figures and changing buyer behavior, driven by the growth of online capabilities in the automotive market. However, Rainer Hofmann, head of the E-Commerce Competence Group at Eco – Association of the German Internet Industry e. V., also sees online retail as an opportunity for car dealers: «Information about the cars for sale, their features, and their prices must be available online. As online offerings become increasingly important in the market, dealers should also take advantage of the wide range of possibilities—from immediate purchase in their own online store and nationwide delivery service to augmented reality and the expansion of services. To truly succeed, however, local dealers must first and foremost continue to rely on a trusting relationship with their customers.»

Online Store and Online Customer Communication as the Core of a Company’s Digital Strategy

Hofmann is convinced that Internet-based online functions have permeated nearly all areas of retail and related services—«E-commerce is everywhere!» Not least for this reason, the e-commerce expert calls on manufacturers to take responsibility for protecting their authorized dealers from low-cost online competition through appropriate contracts and regulations. This has become necessary due to much greater market transparency resulting from the vast amount of information available online. This complicates pricing: All consumers know the lowest global price for a given product—retailers must also lower their prices to stay in business.

But the pressure from e-commerce also presents major opportunities for car dealers: «Car dealers need to rediscover their traditional strengths—such as experience and quality—which customers also rely on. Combining these with a smart digital strategy sets the stage for a successful future.» This is how car dealerships, such as the Mercedes dealer Beresa, create another source of revenue with their own online store. A «Buy Now» feature and a nationwide delivery service also provide competitive advantages. According to Hofmann, the traditional test drive is also a major added value: “To ensure that the customer doesn’t get lost again in the vastness of the internet afterward, specialty retailers must seize their opportunities and demonstrate online why the customer will receive trustworthy advice and service here—and that will ultimately translate into sales.”

Connecting the Online and Offline Worlds

Another way to bridge the online and offline worlds is through auto parts. For example, drivers like to buy auto parts online, as the market research firm Puls recently reported. According to the representative survey, nearly a quarter of the drivers surveyed shop online but have the parts installed at a repair shop. «Car dealerships need to promote such offers to optimally link online and offline channels. This opens up further opportunities for them to continue bringing customers into their service shops in the future,» Hofmann explains, using this example.

Create added value and increase customer loyalty

Customer loyalty is becoming a compelling factor that sets a successful car dealer apart. This can be achieved through a special, quasi-«personal» approach and promotional campaigns, as was recently seen with the Mini car brand. For example, after a visit to the repair shop or customer service, owners of the compact car found that a little surprise in her car. «I missed you,» read a steering wheel cover attached to the wheel. According to Hofmann, digital innovations can also be used to provide added value for customers. For example, automakers such as Opel Augmented Reality for Marketing. Audi is actually already one step further: Customers at Audi dealerships will soon be able to use virtual reality headsets to configure their dream car in a way that is almost as realistic and lifelike as the real thing.