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March 17, 2008 |
 Forget glossy brochures and slick salespeople with their “What do I need to do to get you into this car today?” come-ons. Car shopping is all about the Web, and tomorrow we may not need dealerships at all
By Hailey Eisen
It was time for a new car, Lori Greenspoon decided. Her van had served its purpose and she now needed a newer, smaller car, something reliable that her 16-year-old son could drive safely. Her last vehicle purchase had begun with a dealership tour. This time she started online.
Greenspoon spent a few weeks researching cars on manufacturer Web sites. After weighing her options, conducting online brand comparisons and gathering price information, she decided on a 2008 Toyota Camry XLE. Armed with an approximate price, Greenspoon and her husband visited two dealerships to determine which would offer the best trade-in on the van, and then conducted the rest of the transaction via e-mail. Greenspoon picked up her new vehicle a week later.
A Toronto-based social worker, Greenspoon said she prefers doing research online in the comfort of her own home, rather than driving to multiple dealerships and dealing with a phalanx of car salespeople. According to a recent study administered by Media-Screen and Google, Greenspoon’s car-buying preference is shared by a growing number of Canadians.
John Clarke, head of business development for Google’s Automotive Industry division, said in the pre-Internet days it was challenging for consumers to gather objective information about automobiles and other big-ticket items. Today, the research-and-compare phase of car shopping has largely moved online. Empowered consumers need only spend a short time online to compile a list of preferred vehicles, options and price estimates.
“By the time they are ready to visit a dealer,” Clarke said, “often all they need to do is test drive the car and negotiate a final price.”
 Google’s study, which surveyed 1,000 Canadian adults who had researched or purchased a new or certified pre-owned automobile in the past 12 months, revealed that 73 per cent of participants used the Internet to support their research efforts, 41 per cent said manufacturer Web sites influenced their final purchase decision and 85 per cent said they learned something new about brands they weren’t aware of while searching online.
Those findings justify the investment for car manufacturers that have pumped money into their Web sites, and may spark activity at companies whose online marketing efforts are languishing.
Less face time
Unlike other consumer goods that are commonly purchased online, such as books, clothing and electronics, Google said the online car-buying process is largely restricted to research; the actual purchase still occurs in person. Online automotive research typically begins at the manufacturer’s site. After reviewing various models and options, a consumer may choose to explore dealership sites before making a purchase decision.
Some amount of personal contact is, according to industry analysts, something most consumers aren’t willing to give up. However, changes in that relationship are beginning to take shape, according to Thilo Koslowski, a research vice-president with Gartner in San Jose, Calif. “Dealers now realize that many customers are actually more prepared than they themselves are. They’ve had to adjust their role in order to respond to this empowered customer.”
When it comes to pre-owned car sales, the Internet has become an invaluable tool for dealers. “Through digital technology we can now post information and a multitude of colour photos online, making it possible for a customer from Thunder Bay to look at a car in Toronto and travel here with confidence, knowing what he’s going to get,” said Paul Shaw of Ken Shaw Lexus Toyota in Toronto. “But the (personal) service component is still something people consider when they’re making a purchase, and this plays into the importance of buying a car from a dealer rather than online.”
Better sites coming
 But if the online experience is beneficial now, just wait five to 10 years, said Joe Barkai, a practice director with Manufacturing Insight, an IDC division based in Framingham, Mass. “Business intelligence information is still being missed by the Original Equipment Manufacturers (OEMs),” Barkai said. “While consumers conduct all of their research online, the OEMs have no way of tracking what the customer really wanted in a car versus what they ended up buying.” Subaru of America, Barkai said, is in the process of addressing this by implementing new Customer Relationship Management software that will help it better understand and service customers.
According to Barkai, in a society where people are constantly seeking new and innovative ways to express themselves through clothing, electronics, social networking Web sites and the like, customizable and personalized cars that could be built to order would be a big consumer draw. In the near future, he said, consumers will be able to configure their cars online to meet personal preferences, and then hit a button to send the order directly to the plant. A short time later the customer would pick up the car from a dealership, which would then be responsible for accessorizing and servicing it.
While this would require a major shift in the way dealers and OEMs work together and would present manufacturing challenges, “it would result in higher customer satisfaction and a huge reduction in inventory,” Barkai said. “It’s really only a matter of time before this becomes a reality. The newer assembly plants like Toyota and Honda will be able to do it much faster than GM’s older, less flexible plants.”
When asked if she would feel comfortable configuring and purchasing her next car online directly from a manufacturer, Greenspoon’s response was an unequivocal yes. That means as e-commerce becomes safer and more reliable, and as manufacturers roll out better Web sites, Greenspoon and other Canadian consumers may one day relegate car dealerships to simple pick-up facilities where they claim their keys and new cars.
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