The way we buy and sell cars has changed forever. But there’s still a place for the showroom
The idea that no-one will ever buy a car without seeing it first is no longer valid.
Like so many industries, automotive retail took a huge hit during the pandemic and was forced into a series of rapid changes, altering forever the way cars are bought and sold. There’s also been a significant shift in how customers and audiences interact with car brands, away from the showroom and onto their devices.
For car makers and dealers, the showroom has been an integral part of the car-buying experience since the first one opened in 1987. And for a dealership group like Lookers, which represents 30 car makers and has 140 sites, it was the only way to sell: Lookers had sold every vehicle in its inventory via its showrooms since it was founded in 1908.
In 2019 it sold 340,000 cars, then in March 2020 came the first lockdown and everything stopped. With all its showrooms closed, the business had to find a way to keep selling: it had 14,600 vehicles in stock, worth £300m, and it couldn’t sell one of them.
The move to digital sales
Selling cars online is not a new idea. Ford trialled online sales in 2010, although it by no means replaced the dealer network. Hyundai started in 2018. But for a dealer group the size of Lookers to go, as quickly as possible, from no digital commerce capability to selling entirely online was a big transformation.
BMW, on the other hand, didn’t need to switch its entire retail operation online. But it did want to improve how it sold cars, shifting more of the traditional showroom experience to a digital equivalent. That, too, was a change in mindset, away from the idea that to want a car, customers had to see it. Just as the dealer showroom concept changed the way cars were sold in 1897, this switch represents another major change.
For BMW this meant analytics: how to make better use of the vast quantities of customer data it gathered. The process had another outcome: it’s changed how the company and its employees regard data. “The perception of data and its value at BMW Group has increased significantly since working with Adobe,” says Dr Uwe Steinlein, BMW Group’s head of web and commerce analytics. “It means we can now map all campaigns and decisions to tangible outcomes and business success, rather than relying solely on gut feel."
Six months work in six weeks
Lookers had a more immediate problem to solve, and with Adobe’s help built a digital commerce platform in six weeks – a job that normally would have taken six months. Within a week of launch, it had delivered 8000 vehicles to their new owners, all processed through the new platform. And the efficiencies the new system created were revelatory.
One of the most time and resource consuming elements of buying and selling a car is the paperwork. “Where a typical sales process previously required 80 sheets of paper and as many as 17 wet signatures, our customers can now handle the entire experience on their computers or mobiles, with no need to visit a dealership,” says Lee Wheatley, business relationship manager at Lookers.
Signing agreements digitally not only relieves both customer and employees of the admin burden, but also makes the entire concept of selling cars remotely possible. Before, you’d have to go to a showroom to sign the paperwork. Now, you can do it all on your phone.
The showroom is not dead
Neither Lookers nor BMW are predicting the end of the physical showroom. In fact, BMW uncovered ways to help dealerships. Through its analytics work BMW found dealers were struggling to deal with the sheer volume of customer interest coming via the digital platform. Improving the site with better filters, navigation and information meant when the dealers received the customer contact, they were able to process it much faster.
Lookers is aiming for 25% of its business to be online. It wants to offer customers the choice of how they buy, and for every option to be equally easy. ““That’s the real aim,” says Andy Garret, Lookers’ CIO; “to align our real-world and digital offering so that people have full control over how and where they buy their vehicles.
The challenges facing automotive retail are sizeable. Research by PWC suggests that a majority of customers would rather buy direct from the manufacturer, and for those under 30 car sharing is a genuine alternative to owning a vehicle. And while sales are increasing (next year they’re forecast to close in on pre-pandemic levels), continuing to attract new customers will require constant innovation from retailers and manufacturers. The next decade will continue to be one of change and evolution.