■What still causes online car purchases to fail?
By Dr. Martin Achter, kfz-Betrieb https://www.linkedin.com/in/martin-8er/
Translation AutoNews24
■ Is the car available? How does the contract work? What is the process for vehicle handover? According to a study, customers' questions indicate that online car purchases are not yet standard. However, various strategies can increase the likelihood of success in this area.
■ Manufacturers and dealers now have a variety of factors they can use to either facilitate or hinder complete online car purchases through the Internet (e-commerce). This insight comes from a management and IT consultancy MHP study, which is exclusively available to "kfz-betrieb" under "Online Car Sales Benchmark Analysis 2024."
■ The study identifies several key factors, known as conversion drivers, that enhance the online purchasing process. These include a transparent process flow, clear explanations of purchase and financing terms, and interactive booking systems for test drives. Conversely, the study highlights several breaking points in the customer journey that can negatively impact online sales. These include insufficient information about available inventory for online purchases, unclear details regarding vehicle handover, and inadequate options for customer contact.
■ Overall, MHP consultants identified ten clusters of factors that support online purchases of new cars and seven clusters that impede them. The study examined and compared 21 online purchasing routes from various providers throughout 2024, including manufacturers from both the volume and premium segments, new electric vehicle manufacturers, and third-party platforms such as vehicle exchanges and dealers.
■ MHP focused on evaluating the leading providers of online vehicle sales. Using a points system, MHP experts assessed the online sales processes of various providers throughout different phases of the purchasing journey: information, advice, test drive, decision, purchase, and handover. Additionally, the consulting company surveyed online sales experts from vehicle manufacturers. MHP compared the insights from these experts with the sales drivers and challenges identified by the study authors.
■ The study highlighted ten factors that effectively support conversions, meaning actual online vehicle sales:
1. Clear and Structured Menu: A website with a well-organized menu enables users to navigate easily. Customers can quickly determine if a vehicle is available for online purchase if they can book a test drive, and what financing options are provided.
2. High Information Content: Customers should receive comprehensive information about the vehicles, kept separate from the sales process. This allows customers to understand where they are in the purchasing journey.
3. Purchase and Financing Offers: These are essential for facilitating the transaction.
4. Product and Financing Explanations: Offering clear information about the vehicle and financing options, even without requiring a login, helps create customer transparency.
5. Advice: Features like online video consultations and chatbots provide prospective buyers with quick answers to their questions, thereby supporting conversions.
6. Test Drive Calendar with Online Booking: The test drive remains a crucial step in the purchasing process. Direct booking options that include confirmation increase the likelihood of completing a purchase.
7. 3D Configurators: These tools help create a realistic impression of the vehicle. Premium manufacturers often utilise features that authentically represent the desired vehicle. If the configurators integrate smoothly into the sales process, the chances of closing the deal improve.
8. High-Quality Advertisements: Consistently high-quality information about available vehicles, primarily through videos and images, is a strong conversion driver.
9. Frequently Asked Questions (FAQs): A well-structured breakdown of common customer questions by topic promotes sales.
10. Delivery Options: Providing customers with the choice between home delivery and collection and transparent information about any associated costs can be significant.
MHP identified seven factors that may act as "breaking points" in the customer journey, which can hinder an online vehicle purchase:
1. Unclear Vehicle Availability: Confusion about the availability of vehicles alongside potential purchase and usage options (e.g., financing, leasing, or subscription) can be a significant issue.
2. Poor Quality of Configurators: Issues such as incorrect information, programming errors, failures, or lack of interactivity (where selected features are not displayed live) can hinder conversions.
3. Low Conversion Suitability of Configurators: If configurators only serve informational purposes and do not guide customers toward a purchase path, they are ineffective.
4. Intransparent Processes: Customers may not clearly understand their position in the financing process or vehicle handover conditions.
5. Inadequate Online Contact Options: A lack of effective online contact methods (such as video or telephone options) and non-functional chatbots can be detrimental.
6. Non-Interactive Test Drive Booking: If test drives can only be booked via email forms rather than interactively, it can lead to frustration.
7. Unstructured FAQs: Poorly organised FAQs can create confusion for customers.
In light of these findings, how do car dealers perform regarding the purchasing routes on their websites? The answer is that they perform relatively well, as the study results indicate.
MHP examined the websites of various retailers alongside those of vehicle exchange platforms. These websites typically focus on selling vehicles rather than supporting potential buyers in their information-gathering efforts. A previous MHP study (Online Car Sales 2023) found that buyers visiting dealer websites and third-party platforms primarily seek vehicle information as a secondary concern.
Study authors Maurice Tennekes and Clemens Kohlsaat noted that the "dealer/platform" category performs well due to having more experience in direct sales processes. "Customers often arrive at the dealership well-informed, ready to view vehicles, take test drives, or finalise purchases. This leads to a stronger digital conversion power."
■ Online car sales
Why e-commerce has not yet taken off
Prospective buyers can quickly search for vehicles at dealers and immediately start the sales process with available cars. There is also the option of rapidly contacting the dealer via various communication channels (telephone, email, live chat, etc.) to eliminate hurdles in the purchasing process. In addition, the offers from dealers and platforms alike are usually particularly transparent regarding price, equipment and provider. In addition, the processes are generally kept simple.
MHP identified the following aspects as weaknesses at dealers (and platforms):
limited options for digital trade-ins
disconnections between online and offline customer experience
online car purchases are often not yet a complete process
often poor quality of advertisements
inflexible and not very transparent financing offers
low budgets for technical development
The bottom line is that dealer websites, like third-party platforms for online car sales, have their strengths in customer advice regarding the purchase process or the terms of purchase, as well as in the areas of completion and vehicle handover. Premium manufacturers are weak in the information phase but score points above all in advice, test drives and decision-making. Thanks to their dense dealer networks, volume manufacturers are powerful in terms of test drives and vehicle handover. And new e-car manufacturers are unbeatable regarding information, test drive opportunities and purchase completion. All other supplier categories can learn a thing or two from this.
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