An intense debate is growing among dealers over whether the human touch is becoming irrelevant as auto retailing evolves toward online sales.
Although some dealers and marketing experts underscore the value of personal contact in the sales experience, some argue that the in person interaction between customer and dealership staff is outdated.
“The human touch is way overrated,” said Greg Carrasco, vice-president of operations for Oakville Nissan and Oakville Infiniti, located just outside Toronto. “Ask Jeff Bezos [CEO of Amazon] what he thinks of the human touch. The human touch is an illusion.
“The reality is this: Consumer buying patterns have leapfrogged dealerships.”
Perry Itzcovitch, dealer principal of MercedesBenz Downtown Calgary and former chairman of the Canadian Automobile Dealers Association (CADA), disagrees. He said 90 per cent of his customers want to test drive a car before they commit to a purchase.
“You’re not buying a pair of shorts from Lululemon where you already know your size,” Itzcovitch said. “A car is something you’re going to buy and live with for a long time. You’re going to want to make the right decision.”
PEOPLE, NOT MACHINES
Mike Norris, dealer principal of Volvo of Edmonton, said his dealership remains No. 1 in volume for the brand across Canada entirely because of human relationships. His dealership does “almost nothing” online.
“That’s the big reason for our success,” Norris said. “I guess some big, soulless organizations can have success [with online sales]. But for us, it’s all about the relationships and the customers. You can’t have a relationship with a machine.”
Most of Norris’s eight sales staff have been with the dealership since he bought it 12 years ago and they know both their customers and products well. Arriving customers are greeted by a concierge and offered fresh muffins.
“Our concept is to be in the hospitality business,” Norris said. “It’s counterintuitive what we do, but it seems to work.”
Carrasco, who has 27 years in the automotive industry, said he has used an online sales platform provided by Toronto-based Motoinsight to deliver 65 to 75 per cent of the annual sales at his Oakville dealership. Online sales in Canada vary widely by dealership, with some dealers saying they have none at all.
With a policy that Carrasco calls “radical transparency,” his dealership offers a no-negotiation best price upfront.
“What people want is efficiency, honesty and transparency. That’s it.”
Carrasco, who has a national radio show and podcast, said the Nissan and Infiniti dealerships have increased their market share in Oakville to 13 per cent from three per cent in the past year and are selling 700 new and 700 used cars per year in total, with a target of 1,000 each by the end of 2020.
The increase was achieved with just five sales staff members in the Nissan showroom and three on the Infiniti side. “I don’t like car salespeople,” Carrasco said.
John Kot, owner of the Kot Auto Group in interior British Columbia, said he has robust online platforms at his six dealerships, but only about 10 to 15 per cent of buyers want to do the full transaction online.
“Most people want to touch and feel the vehicle, and they want the human touch.”
HOW ABOUT BOTH?
Research supports a hybrid digital-human sales experience. A 2018 survey by U.S consulting firm McKinsey & Co., concluded that, “What customers most desire is great digital interactions and the human touch.” While consumers want to do their own research, the report found, they also desire input from “a highly skilled sales force.”
A hybrid online/in-person process used by most dealerships reflects consumers’ current buying preferences, said Robert Karwel, senior manager of J.D. Power’s automotive practice in Canada. Online tools are useful to help buyers sort out inventory, features and financing details, he said.
“The reason you do that online is so that when you come in, you can get a great experience,” Karwel said. “You’re going to want to take a test drive; you’re going to want to kick the tires.”
The after-sales experience is also vital, Karwel said. “Customers still want to know if there’s a problem, there’s a physical place you can go for it. You can’t have your car repaired online.”
Customer experience is a key factor, said Dominic Sigouin, the Quebec-based president of Noahvik Consultants. Online-only sales work for certain buyers, Sigouin said. But “if digital retailing was the solution, everyone would have gone with it 15 years ago” when it first appeared.
Sigouin, who said he has consulted for hundreds of dealerships in Quebec, thinks the “fun” factor is critical in car buying. For that reason, he said, the role of the sales staff will shift to helping buyers with decisions they’ve already made.
“It’s not like you’re doing business with robots,” Sigouin said.
Kot, the B.C. dealer, doubts faceless sales tactics will ever dominate.
“It’s still a people business and always will be.”