Some dealers will tell you cars won’t be sold online. Consumers will tell you they wish they could purchase cars online. Notice the difference in the two sentences, dealers sell but consumers buy. Subtle difference, but critical distinction when considering the question.  If you are in the cars can’t be sold online segment, it may be better to ask the question another way.

Will more of the vehicle purchasing process be moved online in the future?

Few are predicting less of the vehicle purchasing process will be handled online in the future, only more.  It’s a new and expanding market, which continues to grow every month.  Call it whatever you like, virtual deals or online car buying,  it’s part of what I call the cycle of technology.  In my opinion virtual deals will be the major digital competency dealers will be forced to compete against other dealers on in the future.  This cycle of technology started with S.E.O, then P.P.C., followed by re-targeting and social media and mobile.  To compete effectively online, dealers are required to build competencies in all digital technologies.  Virtual deals is the next and most critical evolution of the cycle.

The cycle of technology creates opportunities for early innovators.  For example in early 2000 few dealers focused on S.E.O.  Back in 2004 dealers complained at the cost of key words for pay-per-click.  Funny today, right?  Exploring opportunities and retaining capabilities before your competition creates distinct advantages.  When a dealer begins a virtual deal initiative they are developing capabilities that are transferable to all other digital initiatives.  Every new cycle of technology creates early innovators advantages.

I would agree cars will never be sold online.  If you define sold as spending 3 hours negotiating, getting four squared, having a sales managers T.O and transferred to the F&I manger for menu selling.  Not going to happen.  However, for dealers who want to allow consumers to buy online by creating a predicable online process, around transparency and customer experience their is a growing segment of buyers looking to give you their business.

It’s possible to turn the new business conditions the cycle of technology has created into an advantage rather than a disadvantage.

Uncovering where value lies for the consumer can give dealers confidence to develop a virtual deal initiative.  In the old days information was scarce and dealers where the first place for information.  There were more showroom visits and visitors had lower expectations and higher tolerance for the inconvenience of buying a car.  Today, dealers are not the first place for information, there are less showroom visits, abundant information online, and dealers are competing for attention online.  Consumers have higher expectation and lower tolerance.

“If it walks like a duck, and quacks like a duck, its a duck.”

Access to the physical dealership is becoming of less value to the consumer. Value is subjective and can be manipulated depending on the argument, (sales vs service) but declining showroom visits tells us plenty.  Virtual deals will not be a winner take all, but it will be winner take most.  Early adapters will develop new skills and process for selling vehicles to consumers in more than one channel.  In the future traditional dealers will find it harder and harder to find traditional buyers.  Maybe 100% of the car buying process will never be done online.  But the dealer that is offering consumers options to start the process and accommodates 60%,  will be better positioned than the dealers that says, “You can’t sell cars online.”