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UNDERSTANDING THE SIGNIFICANCE OF SOCIAL MEDIA ON PRESENT AND FUTURE AUTO RETAILING

RICHARD CHART

Social media has certainly had a big impact on the retail world, influencing consumer choices, buying patterns and behaviour. The true impact on auto retailing, I believe, has yet to be felt, held somewhat in check by the traditional franchise model we follow and the more complex nature of the transaction. Even so, consumers are embracing social media rapidly and dealerships will feel the change with increasing effect even in the short to medium term.

While most of us have a good sense of how social networks are being adopted by the population, it’s a good time to look at some hard numbers that will help you determine what to plan for in your dealership. The general trends are clear:

The Internet is now an “everyday” medium and the world has moved to an environment of more socially driven communication and information technologies. These are rapidly changing the landscape from the traditional mass-media model with its one-way communication, to a model where there is a much more engaged audience that wants to be (and is) part of the action. The rapid growth of social media networks is clear evidence of this;

Consumers are becoming more “platform agnostic” — accessing online information and social media networks on a variety of different platforms (computer, smartphone, tablet, feature phone). Companies or businesses using social media need to take this into account;

Canadians are among the highest consumers of online video content in the world (both in terms of hours per viewer and number of videos per viewer);

Access to mobile technology continues to grow rapidly, with the number of mobile subscribers increasing by 10 per cent from December 2011 to December 2012. While those aged 35-54 are most likely to be subscribers (35 per cent), 28 per cent of those aged 55 per cent are also subscribers.

With over 25 million visitors accessing the Internet in Canada in 2012, more and more Canadians from all walks of life are now also accessing and using social network sites (Source: ComScore Inc.: Canada Digital Future in Focus, 2013)

Let’s see some of the specific numbers in the social media context.

richard chart 2

The strength of Facebook is clear, but both Twitter and LinkedIn are growing — LinkedIn particularly among professionals and business people.

THE MEDIUM IS THE MESSAGE
Equally important is how users of social networking sites access their information and reach out to their networks. Once again, this underlines the importance of having a social networking strategy that is geared towards your audience, using relevant platforms and content. Note the stark differences among younger consumers and their preference for using mobile platforms.

This is the portrait of the future and it underlines the prescient statement made so many years ago by Marshall McLuhan: “The medium is the message”

SOCIAL MEDIA IMPACTS ALL THE PARTS OF THE PURCHASE DECISION PROCESS
One thing social media is clearly doing in many retail environments, is changing the bottom of the traditional “purchase funnel” (the process that consumers usually go through when looking at their options and then making their final purchase decision).

Life used to be fairly simple — with consumers going through the process predictably, ending up choosing between two or three alternatives. Not only does social media allow a marketer or advertiser to “amplify” messages at all points in this process through the users, but the incremental amount of information available through traditional online media and now social media, means there is a greater likelihood for customers who are on the verge of making a purchase decision, to switch to an option that they had not considered before.

The days of the single authoritative source (manufacturer or dealership) are limited. The new willingness to “share” with friends and family is the primary driver of the growth of social media. The purchase of a new vehicle or a good or bad service experience are events that can trigger this sharing quickly, as we have seen in so many cases where information and experiences “go viral.”

WHAT DOES ALL THIS MEAN TO A DEALERSHIP?
The argument that social networking is only popular among teens and younger adults (not the bulk of new car buyers) clearly no longer holds up. Not only are those in older age groups adopting these new technologies, but the customers of the future who will come into your dealership will be comfortable with this new mindset and with the expectation that you will be ready for them. It’s important that you are.

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