The latest Kijiji Autos Driving Change report offers some interesting insights that not only shine a light on important areas dealers need to focus on — it also reveals some surprises.
We already know that consumers are doing their homework before entering the dealership. It’s part of the new norm of car shopping in Canada. But one of the most significant findings in the report is the fact that consumers are now more knowledgeable than ever before ever setting foot in a dealership, according to Leanne Kripp, Director, Head of Autos at Kijiji.
“I think our dealers are getting very accustomed to the fact that consumers are walking in very educated; they are highly informed. And because of that, they are visiting fewer dealerships,” said Kripp in an interview with Canadian auto dealer. “Of the 2,000 consumers that were interviewed for the report, 40 per cent are only visiting one dealership — and that’s the lowest number I have ever seen in any research that’s been published across the automotive industry.”
Leanne Kripp, Director, Head of Autos at Kijiji
In a world where consumers now value information quality over vehicle variety, Kripp said they have little interest in price negotiation. Only 29 per cent of consumers still value the ability to negotiate the price of a car in the dealership — down 8 per cent from 2017. It’s also a point that speaks to the need for greater transparency, as 39 per cent of consumers are considering buying a car online — up 12 per cent from 2017’s findings.
So what can dealers do? They can offer transparent pricing with no haggling (when possible), improve the way they promote incentives for consumers (free winter tires or service appointments, for example), and they can focus on the test-drive. Dealers may be underestimating the importance of the test-drive and how critical it is to the purchase process.
“In order to stay competitive in the dealership, they need to provide that very welcoming and hospitable atmosphere with product experts or product geniuses offering total price transparency,” said Kripp. “And really from online to offline, (they need to offer) a really seamless experience.”
This means ensuring the look and feel of the website and the in-store dealership experience make sense to the consumer; they should not be in conflict with one another.
Dealers also need to ensure their website is SEO-friendly, that it features quality VDP vehicle descriptions with relevant keywords, optimize site meta tags, and ensure all online properties (such as the dealership website and social media) are fully optimized and are user-friendly across all devices — including mobile.
Furthermore, dealers should review their social media strategy. One interesting finding that surfaced from the report is the fall of Twitter. It was once considered the platform to invest in or be left behind, and that prediction has proven untrue today.
For mobile, 72 per cent of dealers have actually increased their usage, which is anticipated to have a positive impact on their businesses over the next two-to-three years. And 56 per cent of dealers plan to spend more money on mobile advertising within the following year.
However, the report clearly indicates that digital spending is down: while 84 per cent of consumers spend more than half their time researching online, only 49 per cent of dealers allocate more than half their budget to digital/online — down 6 per cent from 2017. Asked why digital has declined for some dealers, Kripp said that several years ago they were less tech-savvy in this area, but this is no longer the case today.
“Dealers have done a great job over the last couple of years in making advancements in terms of understanding digital media, the return on investment, how to efficiently spend, where they should and shouldn’t spend,” said Kripp. “It’s not that they don’t believe in digital, it’s that they’re spending their dollars more efficiently.”
In fact, 74 per cent of dealers plan to spend more on digital advertising in two years rather than today.
Overall, Kripp said a key takeaway from the entire report would be for dealers to remember that 40 per cent of online car shoppers visited only one dealership.
“If I only have one chance to get that consumer into my dealership, what does the dealer need to do? And that’s why it’s so essential that they have their online information up-to-date in order to take care of that traffic in their showroom,” said Kripp.
This means dealers must regularly ensure their website is current and accurate, and that it includes the best photos, good descriptions, offers transparency, accurate pricing information, and that it can answer consumer questions as they consider the vehicle they want to buy.
