Premium brand dealerships, known for their tony showrooms and VIP service, are breaking new ground for online purchasing and servicing tools as customers slowly shift to buying vehicles with minimal or even no face-to-face contact.
The Brampton, Ont.-based Policaro Group, which sells Acura, BMW, Lexus and Porsche, launched Policaro Access, a program that had been in development before the outbreak. But last April, it was ramped up as COVID-19 restricted customer access to dealerships.
“At least we had options for our customers, and we could quickly pivot at the height of the pandemic,” said Francesco Policaro, group CEO. The pandemic “really forced us to take a look at our business and how to deal with restrictions.”
COVID-19 has taught dealers across all segments that they have to offer consumers at least a hybrid purchase option as a “hedging bet against any disaster,” said Robert Karwel, senior manager of the automotive practice at J.D. Power Canada.
“It’s incumbent upon luxury dealers to lead the way in giving a luxury-level experience online.”
Policaro said his customers are now doing most of their research online and don’t need to go through the initial discovery phase at the dealership with sales staff.
Policaro Access sells vehicles three different ways: the traditional way at the dealership; a hybrid involving shopping online and then interacting with dealership employees; and an entirely contact-free approach.
The latter includes a digital consultation, live vehicle walkaround, self-service test drive — the customer can drive the vehicle without a consultant present — digital paperwork completion and home delivery that allows the vehicle to be tracked in real time.
The program offers a 24-hour service kiosk that lets customers book their appointment, drop off their vehicle and keys, book a loaner vehicle, track their service and pay for it without going into the dealership.
Customers can also use a valet service: the vehicle is picked up, serviced and sanitized, and dropped off at customer-designated location.
Customers also are encouraged to book road tests online.
Policaro Access has generated 300 home deliveries of new vehicles, almost double what had been projected, Policaro said.
“And on the after-sales side, we’ve realized efficiencies and cost-savings.”
ONLINE FUTURE
While digital-only transactions make up a small sliver of luxury-vehicle sales, dealers said they expect the trend will grow because online buyers tend to be younger and more tech savvy. “I’d be hard-pressed to find a client who hasn’t used some part of the online tools,” said Jay McKeen, dealer principal at Carter Cadillac, the luxury arm of the Jack Carter Auto Group in Calgary. When COVID-19 hit in early 2020, Carter team members discussed how they could build on General Motors’ Cadillac Live online platform, McKeen said.
“We wanted to create Carter Live, where people could reach us from a remote location at any hour of the day,” he said. Adapting the tool to the dealership’s needs “didn’t take a lot of new tech.”
Cadillac Live provides an immersive online experience with the brand’s vehicles. Potential buyers can connect with an on-screen agent, who delivers a personalized walkaround of the vehicle and answers questions.
The tool can also be used as an exclusive perk for Cadillac owners, McKeen said. For example, the dealership recently invited those who had prepurchased a 2021 Escalade to attend an online closeup look at the vehicle.
“The customer got to see it and experience it,” McKeen said. “That really went over well with our client base.”
Carter Live Connect goes beyond the GM tool, enabling buyers to complete the entire transaction online, arrange financing and take delivery without setting foot in the dealership.
IN-PERSON ‘SPECIAL’
Yet the dealership found that only about eight per cent of buyers were willing to do everything online.
“That one surprised us,” McKeen said. “When you’re buying a luxury vehicle, people still want that special treatment.”
Buyers who want to go entirely touchless tend to be in their mid-30s to mid-40s and have researched a vehicle so thoroughly online that they often don’t ask for a test drive, McKeen said.
Despite the pandemic, Carter Cadillac managed to sell about 400 new vehicles in 2020 — a relief for the dealership, which opened in February 2019.
“I had grave doubts in April [2020] about the ($16 million) investment we made” in a standalone store, McKeen said. Online retailing has helped boost sales, he said, adding that 2020 sales “came in at 90 per cent of” projections made in 2019.
The pandemic sped up the trend to online that had been developing for years, said John Bardwell, an automotive product specialist with Bond Brand Loyalty in Toronto.
“It was not the consumers who were dragging their heels, it was the dealers,” he said. “But COVID made dealers realize that this [online transaction] is actually better for them.”
Instead of being in the “sweatbox” of a showroom, Bardwell said, customers can complete their transaction in the comfort of their own home.
“They’re actually dropping more money because it’s calm. They don’t feel the need to haggle.”
