3 Min ReadJune 22, 2023

The Evolution of Automotive E-Commerce and Digital Retail

The Evolution of Automotive E-Commerce and Digital Retail

The automotive industry has undergone a significant transformation in recent years with the widespread adoption of digital retail. This technology has modernized automotive retail, enabling consumers to browse, compare, purchase, or finalize their vehicle purchase in the dealership and online.

One of the primary drivers of digital retail growth in the automotive industry is convenience. With the increasing popularity of e-commerce, consumers have come to expect the ease of  purchasing nearly anything online. This trend has extended to the automotive industry, with auto and parts sales making up 4.8% of online retail in the U.S. in 2021. A year later, one marked by massive supply chain shortages, auto and parts sales experienced a 30.1% year-over-year spike according to e-marketer. This sped up the adoption of digital retail in the automotive industry and a slowdown doesn’t appear imminent.

Deloitte Study Shows 48% of Consumers Prefer an Authorized Dealer

Even with the growing popularity of digital retail in the automotive industry, many consumers are hesitating to buy a car entirely online. Dealerships have long been the primary source of vehicles for consumers, and many of them feel more comfortable purchasing from a physical location where they can see the vehicle and speak to someone who can answer questions and help them directly.

A graphic chart of the U S Consumer Preference for car buying in 2023 compiled by Deloitte.

The Auto Industry Has Seen a Significant Shift in Recent Years

Online marketplaces provide several benefits to consumers, including the ability to browse and buy vehicles from home. They can compare prices, estimate payments, and explore features across multiple brands and models. Additionally, many online marketplaces offer home delivery of a purchased vehicle, which further adds to the convenience of the online purchase.

Lack of Trust Remains a Key Issue Despite Popularity

Just 44% of car owners report trusting online automotive retailers only somewhat, with 15% claiming to trust them very much (CarMax study, 2022). One of the primary concerns for consumers is the inability to physically inspect the vehicle before making a purchase. Consumers are also concerned about the accuracy of online vehicle descriptions and the potential for fraudulent activity.

Dealers Have Developed Strategies to Build Trust

The most effective stores have adopted fully integrated omnichannel retail processes between their website, showroom and financing. Many retailers also offer virtual vehicle tours so consumers can inspect the vehicle in detail from their home or device. A transparent online experience allows the consumer to complete the same deal in-store without repeating any steps, builds trust with shoppers, and increases their overall satisfaction.

Digital Retail Has Been a Game-Changer

Digital retail offers consumers the convenience of browsing and purchasing vehicles online, while retailers benefit from increased efficiency and lower overhead costs. However, despite the rapid growth of digital retail, many consumers still prefer to buy their vehicles through a dealer. To continue driving growth in the digital retail space, automotive retailers need to build trust with consumers through a seamless online-platform-to-showroom purchasing experience that meets the needs and expectations of today's digital-savvy consumers.

CDK Roadster: The Only Complete Digital Sales Platform

This seamless omnichannel platform comes with everything dealers need to transact online and in the showroom. CDK Roadster is compatible with dealers’ preferred Customer Relationship Management systems (CRMs), lending solutions, website providers and more.

If you have questions or want a free demonstration, contact us to talk with an industry expert.

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Steven Walker
By Steven Walker
Sr Product Marketing Mgr

Steven Walker is a senior product marketing manager with CDK Global. With a background in automotive CRM and Digital Retail consulting, he has a deep understanding of the unique challenges and opportunities car dealerships are facing today. Steven aims to help dealerships with implementing strategies that optimize their operations, streamline their sales processes, and ultimately drive revenue growth in order to successfully navigate the rapidly evolving digital landscape.

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