Cars.com Inc., a leading digital automotive marketplace and solutions provider, recently shared a large amount of consumer data and research that they’ve been tracking since the pandemic hit in March, 2020. Based on this data, the company has identified several recent trends, some of which may indicate a new way of doing business for dealerships:
- Digital purchases
Cars.com notes that before the pandemic, only 54% of dealers in America offered digital retailing tools and, with many physical showrooms forced to close, “Cars.com-owned Dealer Inspire saw a 250% increase in dealer inquiries for its digital retailing solution Online Shopper.” As dealerships source digital solutions, it’s likely that these retail tools will remain a permanent fixture in the car buying landscape.
- AI-powered chatbots
The company has noted a spike in chat tools like Dealer Inspire’s Conversations. The tool uses artificial intelligence to answer basic customer questions like dealership hours. “Month-over-month, online chat conversations between shoppers and dealers increased 23% in April and 38% in May,” Cars.com reported.
- Urban consumers turn to personal vehicles over public transportation
The company’s data has revealed that in urban areas, nearly 20% of American consumers who did not own a car are now considering purchasing one as concern about public transit and ride-sharing services increase.
- Dealership concierge services have increased
Nearly a third of American car shoppers would like dealers to deliver their newly purchased vehicle to their home and would like dealerships to offer at-home test driving. Cars.com’s data reveals that many dealerships are already providing these services, with 67% offering home delivery this past April.
- Rebounds to the used-car market
With OEM incentives during the first few months of the pandemic, new-vehicle searches overshadowed used-vehicle searches on the Cars.com website. High incentives, coupled with a pause in production led to new inventory shortages at many dealerships. However, as the market rebounds, “searches for new vehicles decreased three percentage points while used-vehicle searches increased 4.5 percentage points,” the company notes, suggesting that more shoppers are turning to used vehicles. This shift means that “shoppers should also anticipate potential price increases on used vehicles as demand increases and inventory shrinks.”
- Consumers are looking for low monthly payments
With new-car prices reaching all-time highs over the past several years, six and seven-year car loans have become the new normal. Research by Cars.com has shown that “60% of Gen Xers and millennials are more concerned about a low monthly payment and therefore more likely to purchase a new car with longer loan terms compared to their older counterparts.”
Alex Vetter, president and CEO of Cars.com Inc. noted that while the long-term impacts of the pandemic on the industry are unknown, “our data and research indicate reasons for optimism. Despite the pandemic, our site traffic has grown for 11 consecutive weeks dating back to the start of May, and leads from shoppers to dealers have increased for 14 consecutive weeks. There is significant activity taking place and in the midst of all this, our industry is changing for the better.”
