Automobile dealers need to get better at aligning the online and in-person purchasing experiences for customers as digital retailing rapidly gains traction in Canada, industry experts said during an Automotive News Canada Congress online panel discussion.
Digital retailing has reached a “tipping point” in Canada, putting the onus on dealers to let go of traditional models of selling vehicles, Chace Estes, Google Canada’s head of industry, auto, told the June 1 panel.
The industry has reached the moment that “the majority of sales within the organization is coming through digital resources,” said Estes.
Six per cent of Canadians bought their vehicles online in the past 12 months, a sixfold increase from the rate in 2019 before the COVID-19 pandemic. And 13 per cent of used-car buyers are doing so online, he said.
To thrive in the digital environment, manufacturers and dealerships must build and refine their omnichannel selling strategy, Estes said. That will ensure that a customer who starts a vehicle search online has a consistent experience when interacting with the dealership.
Dealerships must provide “that frictionless purchase process the same way [other] retailers do,” Estes said.
‘BEST OF BOTH’
Andria Zanchin, principal and executive vice-president of the Zanchin Automotive Group, said she was surprised to see how quickly digital sales have grown in two years. But she believes omnichannel purchasing will dominate because “it gives the consumers the best of both the digital and the comfort of knowing they can still walk into a dealership should they need assistance.”
A culture shift must occur at the dealership level, which can be difficult for long-term staff, said Zanchin, whose Toronto-area company has 33 dealerships. “A lot of them are not adept at changing,” she said. “They are comfortable with the old ways.”
Pierre Boutin, president of Volkswagen Group Canada, said that although data and new technology are “the new way of doing business,” manufacturers and dealers must also stay focused on personal customer interaction.
“Maybe I’m old-fashioned, but I think it’s really, really important,” Boutin said. “People want to be treated with respect, and the technology is not going to make it happen for us. … The human factor remains key in this overall retail experience.”
VALUE A VIRUE
The interaction comes down to the perception of customers that they are receiving value, said John Currado, president of taq Automotive Intelligence of Markham, Ont. While a few buyers may buy a vehicle with no personal contact, Currado said, “for the vast majority of consumers, they still want to feel that the value is being delivered by someone.”
Dealerships have a “long way to go” in using data, Zanchin said. “Customers do provide us with a lot of data, and I don’t know that we necessarily know what to do with it,” she said.
The growth of data will enable manufacturers and dealerships to tailor messages to each customer and move away from scattergun promotions through “thousands of emails and SMSes [text messages] to our customers, Boutin said. “People have had enough of this.”
If the messages are not relevant and personalized, Zanchin said, customers will disengage.
Panelists at the Congress session also agreed that it is vital to continually update customer data, get better at segmenting buyer types and comply with both regulations and customer expectations on protecting their privacy.
“Dealers and OEMs are sitting on data-rich environments,” Currado said. “The trouble is, what are you doing to maintain it, and what are you doing to ensure that it’s staying fresh?”
Keeping data current is critical to ensuring a seamless transition from the online experience to the experience when the customer walks into the dealership, he said.
USE DATA WITH CARE
Boutin emphasized the need to be “extremely careful” with the data collected. “The legislative environment is rapidly changing, and rightly so,” he said. “We have responsibilities — all of us — in this business.
“We have to be a lot better at asking the customers about what we can and cannot do with the data, so there are no surprises for the customer.”
Zanchin said her auto group has a dedicated compliance person and robust procedures for managing data. “It’s a bit of a nuisance,” she said, “but unfortunately, it’s the world we live in. “If they don’t want to be contacted, if they want to opt out, you have to opt them out.”
Boutin emphasized the need for manufacturers and dealerships to learn how to gather and mine the data.
“It’s not about being perfect, right?” he said. “You’re trying different things, and you’re learning from it.”
