New study offers areas of focus for dealers

A recent study from Kijiji Autos offers guidance to dealers on how they can reach more customers digitally.

The study was created in collaboration with BrandSpark International and aims to help dealers increase sales, and connect with three distinct buyer segments: consumers considering dealer and private seller options, younger shoppers considering both new and used options, and high-end buyers considering new vehicles worth $45,000 or more.

Some things to consider

For consumers that are considering dealer and private seller options, 70% bought a used vehicle from a dealership, 20% only ever considered a private seller, and 10% considered buying from a dealership—but ultimately bought privately. According to Kijiji Autos, this represents a huge opportunity for dealers.

Consumers in this group considering both the dealership and a private seller are relatively even across the age board (37% aged 18-25, 34% aged 35-54, and 29% aged 55 and more). They are also more likely than used car buyers overall to consider a variety of makes and models (73% versus 49%). Overall, 85% will consider a vehicle from a dealership during their car-buying journey.

For the second group, the percentage of younger buyers considering both new and used vehicles is much greater than those considering only used vehicles (31% for both in 2021, versus 12% for used only in 2021). Fifty-seven per cent are considering buying a new vehicle.

This group is also much younger than the used-only consumers—which is a key focus for dealers due to their potentially high lifetime value. Thirty-five per cent of 18-24 year-olds are focused on buying new and used, versus 33% of consumers aged 35-54 and 33% of consumers 55 and over.

Furthermore, younger consumers are more likely to consider buying online-only: 65% versus 54% of 35-54 year-olds, and 30% of 55 and over. At the same time, they value the services provided to them by the dealership more than older buyers (59% vs. 47% vs. 53%).

For the high-end buyers, the segment is evenly distributed among age groups (30% aged 18-34 vs. 36% aged 35-54 vs. 34% aged 55 and more), but leans more male than female (61% male vs. 39% female).

This group also believes they are more knowledgeable about the vehicle before looking into buying or leasing one (67%), and they enjoy the vehicle shopping experience more than other consumer groups—68% for high-end buyers vs. 52% for new overall buyers,  35% for used and new vehicle buyers, and 18% for used car buyers only.

This is the group that wants a great dealership experience.

What they all have in common

In looking for common ground, Kijiji Autos said that “the quality of the online dealership experience plays a critical role in driving sales” for all three segments: consumers considering both the dealership and a private seller option, younger buyers, and high-end buyers.

“Canadians are continuing to shop online, for both everyday needs and high-priced items like cars, with no signs of this trend slowing down,” said Leanne Kripp, Head of Autos at Kijiji. “This study shows the importance of dealers adapting to digital retailing so that they can meet their customers online and stay relevant.”

Based on Kijiji Autos, approximately 67% of consumers considering both dealer and private seller options start their online journey at a vehicle marketplace. In comparison, 66% of 18 to 34 year-old consumers launch their vehicle search at an online vehicle marketplace or through a search engine.

How to appeal to these buyers

Overall, dealers should invest more time in online marketing when it comes to the first group of shoppers, because they start their journey online and they pay more attention to digital ads than other vehicle shoppers. They are particularly on the lookout for messaging around fuel efficiency and safety, and they like the option of an online-only experience. Forty per cent of these buyers would consider purchasing a vehicle online without stepping into a dealership.

For younger buyers, pay attention to the virtual shopping experience—it is paramount, according to the report. Two-thirds of this group will start their vehicle search through an online marketplace or by searching on Google. Most of them want their quotes virtually, but will negotiate the final price in-person. For new-vehicle buyers in this category, the online-only option is even more important. For used vehicle buyers, the focus is on added features.

As for the last group, strengthening the car-buying experience is critical for high-end buyers, because this segment is more likely to bypass the dealership completely (32% of consumers will not bother going to the dealership simply because of the website experience). This group is interested in one-on-one digital walk-arounds and video chats (more so than other groups).

Kijiji Autos said Canadian consumers “want and expect the vehicle-buying experience to reflect how they shop online for other goods and services.”

In its report, it adds that for so many “potential buyers in these segments interested in the idea of an online-only vehicle buying experience, digital retailing can only become that much more important in the coming years.”

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