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Is E-Commerce Driving the Auto Industry?

Over the past decade or so, the automotive industry has been through some major changes. A large part of this change stems from the rise of the Internet and social media. In this Amazon Prime era, as an automotive dealership, you need to be leveraging everything that e-commerce can offer. Last years (2017) sales projections showed a slow and gradual decline, but a slight rise in the online marketplaces. Thus, forcing traditional sellers and carmakers to react towards e-commerce companies.

There were a fair few companies that started the disruptions to the brick and mortar dealerships. A few of the more notable ones were:

  • Vroom, Shift, and Carvana: These were the latest pioneers in purchasing and reselling used vehicles online.
  • TrueCar: A car shopping website that streamlined the loan process by joining JPMorgan with a financing agreement.
  • AutoNation: A new vehicle retailer that piloted kiosk offering and online sales with Wal-Mart and CarSaver.

Amazon, the e-commerce giant, also made headlines when it secured major contracts where it posed a threat to DIY choices, such as Advance Auto Parts, Genuine Parts, and AutoZone. In Italy, Amazon already sells its own vehicles, so this move just seemed like a move closer to Amazon starting to sell its own cars here.

It is predicted that by 2020, millennials will account for 40% of the automotive market. Their buying power will have more influence than that of other generations. They won’t just be buying cars, the will be dominating the car buyers. It will not be a surprise when we say that Facebook and other social media platforms have become essential tools to connect with the market. Millennials are taking advantage of all the resources available to them, especially Facebook, to help them decide their next purchasing design.

It is no longer just enough to have a website. Instead, you need to have an active presence on all the major social networking platforms. Notice, we said active. It is not enough for you to just have a page for your dealership or automotive company, you’ll have to engage with your audience. The number of personalization tools at your disposal today means that its necessary for you to customize your messages to connect with different market segments.

L2, a business research firm, states that aside from Tesla, the majority of the automotive brands are still struggling to meet their customers’ expectation. In fact, only three brands, aside from Tesla, are starting to provide online shopping tools. Those three brands are Hyundai, General Motors, and Ford. They are providing online tools to help them streamline the buying experience for the customers. Ford has the Ready.Shop.Go platform, GM has a Shop.Click.Drive platform, and Hyundai has a Shopper Assurance platform.

Google’s research shows that there are five moments during the car buying process when you have the ability to engage with the car buyer.

The first moment is “Which Car Is Best?”. With 60% of potential car buyers not knowing which vehicle to purchase when they first enter the market, they will look towards a number of resources to figure out an answer. Videos, regardless of what platform, are quite influential, with Facebook posts following at a close second. Word of mouth can also be very influential with new buyers.

The second moment is “Is It Right For Me?”. When the car buyer has an idea of what they’re looking for, they might stop and ask themselves whether the vehicle chosen is really the right choice for them. This is the step at which they’ll be doing practical research, such as the number of airbags and seats that vehicle has.

The third moment is “Can I Afford It?”. This is quite self-explanatory. Most buyers will consider the price tag attached to the car they’re looking at before deciding if they are able to afford it or not.

The fourth moment is “Where Should I Buy It?”. Millennials, more than any other generation, will choose to do most of their shopping online. But, in this case, they’re more likely the ones that actually want to visit the dealership. So, they’ll perform Google searches, such as ‘car dealerships near me’.

The fifth moment is “Am I Getting A Deal?”. Once they’ve reached your dealership and found the car, they’ll need reassurance and certainty that they’re getting a good deal before they’ll say yes.

There are a few things that your e-commerce platform should have. Those are:

  • Flexible Product Data Options
  • Product Bundling
  • Integration With Your Brick And Mortar Store
  • Rich Snippet Markup
  • Cohesive Branding Throughout
  • Optimized Product Landing Pages
  • Model, Make, Year Filtering
  • Advanced Filtered Search
  • Shopping Comparison Feeds
  • Intuitive Inventory And Product Management
  • Mobile Friendly Responsive Design
  • Wholesale/Dealer Tiered Pricing

E-commerce can help the automotive industry overcome its major hurdles. There will now be an easier exchange of information. E-commerce allows you to use a single system to unify your inventory. This allows you to have an automated buying and selling process, thus putting the power in your customer’s hands. This type of system allows enables you to provide your customers with real-time information, while making it easier for prospective buyers to search what you have in your store.

E-commerce also helps with marketing. What makes Amazon so successful is the ability for them to suggest similar products with products related to ones that the customer has looked at. This can work great with dealerships, for example, if a customer looks up diesel up-pipes, your system can suggest a complete up-pipe kit, which might have some additional products that they didn’t realize they could get. This way you can also upsell to customers who are trying to buy cheaper parts.

So, what can you do? The best way is to create an omnichannel. This means you are able to sell everywhere and simply manage everything from one location. This type of retailing will allow you to integrate key tools and serve all your channels while eliminating core roadblocks.

The core channels with this would include:

  1. Online Store: For this, you should build a modern store that has a responsive design that performs well on all platforms, including mobile devices, laptops, and desktops.
  2. Physical Store: Connecting your physical store with your online store through the use of a POS allows you to have your inventory to be automatically updated whenever you have a sale, regardless of whether that is in person or online.
  3. Online Marketplaces: Get your products listed on high traffic marketplaces, such as Amazon and eBay.
  4. Social Media: Buyers can find and purchase your products through the most popular social media platforms, such as Pinterest and Facebook.
  5. Customer and Email Focused Communication: Integrating an email marketing system allows you to have a more personal touch while still removing manual tasks. You will be able to follow up, re-engage, and welcome people that matter to you.


Sources: NY Daily News, Think With Google

Teresa Jenkins
Teresa Jenkins
Marketing expert and freelance writer for CBT News

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