The Increased Importance of Dealer Sites in New-Vehicle Shopping
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1 The Increased Importance of Dealer Sites in New-Vehicle Shopping The importance of dealership websites for new-vehicle shopping skyrocketed over the past 15 years, with the biggest jump occurring over the last year. In aggregate, changes in consumer behavior are the leading reason why dealership websites have grown in importance. However, dealers responding with superior merchandising, advanced website solutions, and well executed digital marketing are obtaining far more than their fair share of this explosive increase. New car shoppers today are more than 3.5 times as likely to visit a dealer s website compared to 15 years ago. The growth in dealer site popularity among consumers far exceeds that of independent sites or manufacturer sites. The biggest leap occurred just recently when the percentage of Automotive Internet Users (AIUs) visiting a dealer s site shot up from 73% in 2012 to 83% in Last year was the first time U.S. new-car buyers were more likely to visit dealer sites than independent sites (e.g. Edmunds.com, kbb.com, Cars.com, Yahoo Autos, and AutoTrader.com). These independent sites remain important, and continue to be visited by 80% of AIUs. Nonetheless, the growing emphasis going forward will be dealership websites and their integration with manufacturer sites. Shifts in consumer shopping caused by the rapid adoption of mobile devices are not the only source stimulating the importance of dealer sites. Advances in digital marketing offer new, more efficient methods of driving traffic directly to the Vehicle Detail Pages (VDPs) of dealer sites. Dealers with the best VDPs enjoy a growing competitive advantage. Contents Methodology... 2 Influence of Dealer Sites and Independent Sites on Actual New-Vehicle Buyers... 3 The Relationship between Manufacturers and Dealer Sites... 4 Content and Navigation on Dealership Websites... 5 Mobile Driving Traffic to the Dealership Site Summary About Dealer e-process About the Author A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
2 Methodology Secondary data was used for this study. The primary source was 15 consecutive years of the J.D. Power and Associates New AutoShopper.com Study. When looking at trending, it is important to keep the methodology as consistent as possible. Although the J.D. Power studies have always been recognized as conservative measures of internet use in the shopping process, they were the leading, trusted measure in the early years of automotive internet and remain an unbiased source. The sample size used in the 1999 New AutoShopper.com Study included surveys from over 3,000 new-vehicle buyers. By 2001, that sample increased to over 26,400 and has remained robust ever since. Over the years, some variation to the study occurred. However, no other study matched this sample size or level of consistency over the 15 year period. Inflection points in the trending match expectations based on changing events, including the most recent spike in the use of dealer sites. The leading criticism of the studies was the conservative nature of the Automotive Internet Use rate (AIU rate). Although this controversy has no bearing on the finding regarding the rise in dealership site visitation among AIUs, a detailed explanation is offered in order to provide maximum transparency. Information was obtained from official J.D. Power and Associates press releases and published articles interviewing J.D. Power officials responsible for the studies. It should be noted that the author of this report ran the Automotive Internet division of J.D. Power and Associates from and was the lead person responsible for the New AutoShopper.com studies for each of those four years. All screen shots are from actual dealer sites provided by Dealer e-process. AIU Rate Controversy The J.D. Power studies produced an AIU rate that was always considered conservative. Older shoppers who purchase new vehicles are more likely to answer surveys than are younger new-vehicle buyers. Since older shoppers are less likely to use the internet in the automotive shopping process and the sample size was tilted somewhat toward older shoppers, the outcome slightly understates the true importance of the internet. However, this impact has been fairly constant over the years, making the trending reliable. It should also be noted that many in the industry have a misperception that virtually everyone uses the internet in their automotive shopping process. A leading influence on internet use rate is the number of vehicles shopped. In 2007, it was discovered that shoppers only considering one vehicle in their shopping process are considerably less likely to use the internet than those considering two or more vehicles. Over half of non-aius fall into this category of single-vehicle shoppers. This fact supports the importance of the internet to dealers and manufacturers, as the target consists of those shoppers who can be influenced. It was long thought that among the small minority of shoppers not using the internet, many are set in their purchase decision. This line of thinking suggested shoppers using the internet are far more capable of being influenced and represent the prime target retailers and manufacturers seek. The New Autoshopper studies tend to support this notion. The actual number of shoppers not using the internet in their shopping process is surely less than the 21% reported in the most recent J.D. Power study, but greater than the near 0% so frequently claimed by internet enthusiasts. 2 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
3 Influence of Dealer Sites and Independent Sites on Actual New-Vehicle Buyers Since the early days of automotive internet, independent websites played a significant role in newvehicle shopping. As early as 2001, 60% of shoppers used the internet in their automotive shopping process and 83% of those AIUs visited one or more independent sites. Today, the AIU rate is at 79% and 80% of those AIUs visit one or more independent sites. In other words, the growth in internet usage accounts for 118% of the increase in independent site visitation by new-vehicle shoppers. That isn t to say visitation on independent sites has not grown over the years, but very little of that growth came from people who actually buy new vehicles. Strange as it seems today, Cars.com was strictly a used car sites back in Still, many new car buyers visited the site during their shopping process. Some went to value their trade, but many were crossshopping new and used vehicles. The fact that these visitors can now obtain information on new vehicles suggests the site must be more influential than before among the new-vehicle shoppers they attract. However, auto dealers looking to sell new vehicles don t benefit from the number of site visitors searching new-vehicle inventory. They benefit from the number of buyers searching through inventory in their market. By comparison, the growth in visitation by new-vehicle buyers to dealer sites has been explosive. In 1999, a scant 31% of AIUs visited even one dealer site in their shopping process. Indeed, many dealer sites offered little or no new information that could not have already been found on a manufacturer or independent site. That rate shot up to 46% by 2001, then grew steadily to 73% in Just a year later, the rate leaped to 83%. Rarely in social science does a participation rate already as high as 73% rise 10 percentage points in a single year, but that s exactly what happened. Much of the dramatic spike in visitation to dealer sites can be attributed to the rising importance of mobile devices among new vehicle buyers. Over half of all adults own a smart phone (internet enabled). However, there is a high correlation between income and smart phone ownership, and new-vehicle buyers tend to be more affluent. Among new-vehicle buyers, smart phone ownership is estimated to be roughly 66%. Smart phones dramatically changed the use of the internet in the shopping process. Previously, shoppers used the internet until they were ready to go to the store, and then shoppers were on their own. Today, the majority of shoppers are walking into the store with the internet in their pocket or purse. The importance of the internet as a whole has grown considerably. However, it stands to reason the most official source of information within the store is the information on the store s website. Information on the dealer s site is undeniably the claim of the dealership and must be honored by the dealership. Little wonder why visitation to dealer sites increased when the consumer s internet access jumped the curb and entered the store itself. 3 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
4 The Relationship between Manufacturers and Dealer Sites Fully 98% of AIUs visit at least one manufacturer site before buying a new vehicle. Manufacturer sites are essential to brand managers and the retail networks they support. The content on dealer sites must complement the manufacturer s information while providing even more information about the vehicle and the store. There is no reason why franchised retailers should have less vehicle content on their sites than manufacturers do on theirs. After all, it will be the retailer who sells the car and the retailer who maintains it. Factory personnel remain nameless and faceless to the vast majority of shoppers buying their vehicles. The focus is on getting shoppers to the dealership and/or the dealership s website with a preference for the make and/or model. The dealership site is the primary information available to dealership personnel handling phone calls, s, chats, and texts. Whether the store uses a Business Development Center (BDC) or not, it can better handle inquiries and set appointments when the front-line personnel are armed with relevant information. Many of the consumers they are responding to have already heard the line, just come in and we ll answer your questions. This tactic generally does not work. The next competing website is just 1 or 2 clicks away. Many shoppers have experienced one or more salespeople who know less about the products they sell than the shopper themselves. A website with more product information puts power and credibility in the hands of the sales team on the floor. They can quickly get answers and demonstrate where they came from. Automotive retail giant, Sonic Automotive, is in the process of putting tablet computers in the hands of every frontline salesperson. Tablet computers are a sharable size and invite the shopper to allow the salesperson to go online for them and obtain the answers directly. Shoppers often arrive at a dealer site after spending time on the manufacturer s site. Through vehicle configuration tools (also known as Build Your Own tools) the shopper may acquire a preference for a particular marketing package. The dealership website should provide an integrated experience, making it easy for the shopper to recognize whether or not the vehicle they are looking at contains the desired package. 4 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
5 Content and Navigation on Dealership Websites Of course, more relevant content helps bring more shoppers in contact with the store, as well as improving performance within the store. Leading dealer sites include downloadable brochures and owner s manuals. Most vehicles are not purchased by an individual. They are purchased by more than one decision maker or a decision maker working with one or more influencers. Before the shoppers come to the store, they must agree they are ready to take the step and agree on which store to approach. Brochures and 5 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
6 owner s manuals provide credible information consumers can use to persuade one another. Here are a few examples: Uncle Frank, I m sure I can afford to own the vehicle. I ve gone through the owner s manual and looked through the maintenance schedule. I m prepared to take care of this vehicle. I just need you to come with me as a co-signer. Jack, sit down on the couch with me. Here is the brochure on the vehicle and this is the configuration I want on page 10. It includes the cold weather package and four wheel drive, just like we talked about. Vehicle content includes the awards won by the vehicle and all the vehicle features and options. This kind of information enhances preferences for the vehicle and makes it easier for one decision maker or influencer to persuade another. Improved navigation allows shoppers to more quickly and easily find the vehicle information they are looking for. Below is an example of a good menu approach to providing information about vehicle 6 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
7 features. A simple data dump with virtually no navigation aids can no longer be considered sufficient. The same information must be available to shoppers on mobile devices, where menu navigation is even more critical. One of the great advancements executed by online retail giants like Amazon and Walmart.com is the ability to search with text as well as menus. Shoppers are already familiar with this type of search; they simply are not used to finding it on a dealer s website. When searching for a vehicle, the site search turns whatever page the shopper is on into a consideration set of vehicles with a drop down menu of the most relevant results. The more detail the shopper types into the search bar, the more relevant the results become. Searching for parts, service, financing, or other specific information brings up a list of the most relevant pages for that search as well. 7 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
8 Dealership websites should enhance preference for the store as well as preference for the vehicle. Providing information from credible third-party sources enhances the credibility of the dealership. Crash test ratings from NHTSA and environmental scores from the EPA back dealership and manufacturer claims with credible information directly from third parties. Today, this information is being automatically fed onto the VDPs of dealer sites. 8 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
9 9 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
10 As seen in the above examples, testimonials also enhance credibility for the store. They can be delivered in text and/or video. Testimonials relevant to the vehicle enhance preference for the store. It is also important to introduce the shopper to other vehicles within the store that might meet their needs. This demonstration of selection also enhances preference for the store. Naturally, the traditional rules apply regarding photos, videos, and text descriptions provided by the dealership. The vehicle should be professionally merchandised as quickly as possible. There has been a great deal of research demonstrating the value of actual photos of new vehicles. There is a cost, but it can be well worth it, particularly if the store doubles down by turning those still photos into a stitched video. This work is done automatically and added to the merchandising feed that fulfills the website and third-party listings. 10 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
11 Video is the only way to meet the information needs of the 25% of shoppers who are primarily auditory learners. They need to hear it with their ears, not just with their inner voice as they read. Video allows them to do this. Virtually everyone learns better when they can hear the message and see what is being talked about at the same time, but auditory learners are particularly grateful. 11 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
12 Mobile All of the content on the desktop site must be available on the mobile site as well. Credibility is lost when one version of the site displays content not found from a different device. Imagine a customer shopping from the home or office, then finding some of the content absent when showing their spouse over their mobile phone at a coffee shop or the salesperson in the store. Fully 37% of new-vehicle buyers shop on multiple devices before coming to the store (from the study Mobile Device Use at the Dealership by Cars.com and Placed, January 2014). Just as damaging, search engines are penalizing sites without an exact database serving the same content to every device. The solution is a site operating on a single database with appearance and navigation that responds to the device. There are but two responsive solutions, Adaptive Web Design (AWD) and Responsive Web Design (RWD). Of the two, only AWD allows the dealer to properly display third-party plugins and utilize different tracking numbers for different devices. Many RWD solutions are malfunctioning on dealer sites, resulting in greater problems than they were designed to solve. AWD has emerged as the leading alternative for automotive retail. Below are screen shots from a single VDP. The menu titles and icons are identical to the site from any other device. Every bit of content available from any other device can also be found here under the same headings. The rising use of mobile is the driving force behind the increased visitation and importance of dealer sites. Google estimates the majority of traffic to dealer sites will be from a mobile device by the end of It stands to reason; dealers should invest in the best mobile site possible. 12 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
13 Driving Traffic to the Dealership Site Fabulous developments are occurring in Search Engine Marketing (SEM) and retargeting. Using techniques that were popular just a few years ago can be less cost effective today because more dealers are competing for those same key words. However, new methods have emerged bringing shoppers directly to the right vehicle, or set of vehicles. These techniques are more efficient than anything before them. An increasing number of shoppers are conducting long-tail searches, or searches for specific vehicles. The Digital AMMP team at Dealer e-process developed a method of modifying the landing page based on the relevance between the dealer s inventory and the search. If the dealer has one vehicle matching the search, that vehicle s VDP becomes the landing page. If the dealer has multiple vehicles matching the search, those vehicles are displayed in a Search Results Page as the landing page. If the dealer does not have a matching vehicle in inventory the ad does not appear to that shopper. While sites like AutoTrader.com compete for generic terms, they are generally not going after long tail searches. When done properly, the competition for these terms is lower and the conversion rates are higher. There is little point in spending advertising dollars to drive traffic to a poor dealership site lacking in content. The site must be up to the task. Today, this is true even if the dealership does not use SEM or retargeting to drive traffic to the site. Increasing organic traffic can be a great approach, but it must be earned. Most of the traffic coming to dealer sites organically is from shoppers aware of the dealership and searching for it. To build on this core source of traffic the site must rank for relevant search terms. Generally speaking, there are three elements to achieving this: The right website site system with the proper URL structure and tagging A white-hat site link solution Content Obtaining the right system must be addressed with the selection of the website provider. No one can efficiently fix the problems created by a website design spitting out poorly structured URLs. Utilizing link farms will harm the site s ranking. If a vendor cannot demonstrate that their link strategy is above board and admit it will take time to develop results, then it is probably not worth taking the chance. Simple content generation tools can cause more harm than good. When other dealers have the exact same content, search engines quickly pick up on this fact and negatively respond with poorer results. Content must be relevant and sufficiently unique. Advanced content generation can produce tens of 13 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
14 thousands of unique pages within Google s Hummingbird guidelines. These guidelines will continue to change over time. The one failsafe method is 100% unique content built by hand. This is where the backend or dashboard tools of the website are so critical. It must be as easy to modify content or create totally new pages for the website as it would be to create them on a basic word processor, like Microsoft Word. Listings sites, like Cars.com and AutoTrader.com, traditionally linked from VDP pages on their site to the home page of the dealer s website. Services like Carfax and Lotlinx are now directing the shopper from the listings site to the appropriate VDP on the dealer s website. This is a fantastic advancement for dealers with a proper website. The expectation is that more and more listings services will direct traffic to the VDP of the dealer s site. This will cause another increase in relevant traffic and further increase the value of these services for dealers, but dealers must have all the right content and navigation on the Vehicle Details Pages of their website. 14 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
15 Summary The data is clear; dealer sites are growing in visitation and growing in importance. Mobile devices allow internet shoppers to jump the curb, bringing the internet with them into the store. The dealer s site is the supreme authority on each piece of inventory and every dealership policy. It must have the same content available on smart phones as it provides on desktop, laptop, and tablet computers. The increased traffic coming to dealer sites makes it more important than ever to have the right site. Having the right site can attract even more traffic through organic results. A superior site also allows the dealer to generate additional traffic with greater efficiency using modern SEM solutions. Consumers are relying on dealer sites in their online shopping more than ever before. Dealers must step up to the challenge or risk losing sales to those who do. About Dealer e-process Dealer e-process was the first website provider to offer dealers an Adaptive or Responsive Website Design. Today, hundreds of dealers benefit from our superior platform with the same website content in the right format regardless of the shopper s device. The ultimate test for any website provider is conversion, how well does it turn site visitors into leads. Toyota dealers using Dealer e-process websites convert unique visitors into leads at a rate 2.6 times as high as the average Toyota dealer. Operating across Canada, the United States, and Mexico, Dealer e-process offers an integrated suite of products with each product and service designed to be best in class. They need to be, because Dealer e- Process rejects the walled-garden approach and integrates with virtually every provider, partners and competitors. Products include everything from SEM and chat to specialty websites, an assisted service scheduler, and an assisted pre-approval system. Online presentations can be scheduled by calling (877) A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
16 About the Author Dennis Galbraith is the Chief Marketing Officer at Dealer e-process. He is the author of two books, Sales Integration and Online Vehicle Merchandising, and is working on a third to be released in January Dennis built and sold two companies serving auto dealers, ran the Automotive Internet division of J.D. Power, was a Vice President for Cars.com, and helped start internet 20 groups in the U.S. and Canada while the Head of Business Intelligence for Dealers at DrivingSales. He enjoys presenting to dealer groups and 20 groups across North America. Dennis is a former marketing instructor for NADA University and a former graduate level marketing instructor for Embry-Riddle Aeronautical University. Dennis can be reached at Dennis.Galbraith@DealereProcess.com. Special thanks to Betsey Lupole of Dealer e-process for her editing and contribution. 16 A Dealer e-process Paper by Dennis Galbraith (877) DealereProcess.com
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