On the following script, even Tarantino never thought: Hundreds of thousands of citizens around the world are sitting at home due to the Chinese virus and ordering their dream car, with a click. Buying clothes online? A trip to the Maldives with a tap? No longer exciting. Ordering a car online is the global hit that is breaking the internet. Although car dealerships have not disappeared from the world and the physical car-buying experience still gets the adrenaline pumping, there is no doubt that car with a click is the surprise of the year.

You don’t need to understand Chinese to know that COVID-19 has created a new reality for all of us: car dealerships closed their doors, buyers isolated in their homes, and online orders skyrocketed. Car manufacturers discovered that cars should also be sold online, and more importantly, that many consumers are expecting it. Even at Signature-IT, we put the pedal to the metal and developed advanced e-commerce systems for Champion Motors, the importer of Audi, Volkswagen, Seat, and Skoda, when the cherry on top is bringing the physical showroom into the digital space and providing the customer with a tailored shopping experience at another level.

We took the wheel in our hands

Instead of building a separate system for each of Champion Motors’ manufacturers (Volkswagen, Seat, Skoda, and Audi), we developed a unified system to manage all brands in a one-stop shop and integrate with Champion’s internal systems. The use of Magento with the advanced front-end technology, view.js, allowed us to provide the customer with a unique shopping experience. On the e-commerce sites we developed, you can select the model and view it in 360 degrees, choose color and finish, upgrade with options of your choice, and finally, order the car online.

The forecast: 6 million cars with a click

According to Frost & Sullivan’s research data, in 2019, around 825,000 vehicles were sold online worldwide. They estimate that by 2025, approximately 6 million vehicles will be sold online worldwide. In the United States, General Motors reports that since the pandemic broke out, 750 of their car dealerships have joined the company’s e-commerce website system, and over 85% of their dealerships now use the system.

The good, the bad, and the challenging – cars online, lines to their likeness

The dramatic shift from sales based on physical dealerships to online car sales presents several challenges along the way:

Personal service beats price

Price is a factor, but not only. The European company Carwow, which began the personalization process and providing personalized responses to online customers, reports that more than 75% of the company’s customers close a car purchase deal at an average of $850 higher than the price of the car purchased at physical dealerships.

Upgrade your car

Did you know? One of the factors for the success of online car sales is the availability of accessories to upgrade the car. It is estimated that for every 100,000 inquiries for price comparison online, about 5% of the respondents will register as customers, and 0.5% will also proceed to receive online financing. Additionally, the credit for replaced components with upgraded accessories is 2-3% higher than their actual price, encouraging customers to continue with the purchase process. What’s the consumer psychology behind this? 2-3% is not really a loss—it makes the customer trust the online platform, buy an upgraded car, and recommend the process to friends as fair.

How much does it cost us?

It depends who you ask—the manufacturers boast about discounts and incentives and present an attractive price for the car, customers haggle with the physical dealership and manage to lower the price. In the online purchase process, some car manufacturers do not allow dealerships to display the final car price on digital platforms, claiming that this maintains the brand’s value. It turns out that the price displayed on the website is significantly higher than what the consumer will pay, making the sales process more challenging.

Close to home, close to the pocket

Are you sitting? Hyundai in the UK discovered that 95% of customers who purchased a car through the digital platform lived within a 16-kilometer drive of the physical dealership!

And the customers?

Some are happy about the time savings—because “why spend hours at a dealership closing the deal”? Others are still afraid of making a big purchase online and prefer “to see the car in person” and take it for a test drive.

Shifting gears to the future

Open the cards, read the coffee, look into the crystal ball—all future scenarios lead to a combination of a physical dealership and a digital platform. According to Volkswagen’s vision, the physical dealership will still be an experiential space where you can take the car for a test drive and the place where customers will pick up their cars purchased online, buy parts, and receive service.

What Champion Motors understood, other car importers are now understanding – investing in systems for online car purchases is a must! The system needs to be dynamic, one that offers personalization value to the customer, a friendly experience, personal service, and a wide range of spare parts and accessories for car upgrades.

Signature-IT is a leader in implementing solutions for e-commerce B2B and B2C, knowledge management, and digital services, partnering on the path to digital transformation for leading organizations and companies in Israel and worldwide.

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