We’re not ready to buy new cars entirely online the same way we buy so many other things, and many of us may never be, according to a recent study, "Innovating Automotive Retail" from
The study, based in part on responses from a total of 4,500 customers in the United States, Europe and China, put some statistical weight behind some of the newer realities in auto retailing.
For instance, it’s old news that U.S. customers are doing more and more of their legwork online before visiting a dealership. But the study confirms that the average number of dealership visits per customer before buying a car has dropped from as many as five to as few as only one, depending on the brand and the location.
The good news for U.S. dealerships is that the customer who walks in the door nowadays is probably more ready to buy than ever. The downside is, many dealerships have just one chance to get everything right – the average customer probably won’t be back.
The McKinsey study also noted that more than one-third of the respondents said they would consider buying a car online.
That’s easier said than done. As the study notes, “the U.S. automotive retail market is dependent on franchise laws that restrict free market competition and are not expected to be liberalized in the near future. Online sales therefore need to be arranged within the context of franchise laws.”
That is, even if all the arrangements are made online and the car gets delivered to your door, at some point every new-car sale needs to pass through the hands of a franchised, new-car dealer. State franchise laws are as ironclad on this point as dealers and their allies can make them. Tesla CEO Elon Musk has found that out by pushing for factory-owned stores. The entrenched franchise system has pushed back in state legislatures.
For sure, traditional dealerships need to get better at juggling multiple customer “touch points” especially as mobile devices become universal, the McKinsey study said.
That’s not to say there’s no role for physical dealerships. The McKinsey study found that customers rely on dealerships for test drives, for product expertise, and after the sale for service.
McKinsey said, “Dealerships will therefore remain a crucial touch point in the customer decision journey.”
