Since 1898, the automotive industry has largely relied on the dealership network approach to sell its products. However, the concept of a direct-to-consumer sales model has become a bigger topic of conversation lately. The majority of the discussion hasn’t been about automotive companies opening physical locations or stores of their own to replace the dealerships, but rather about the consumer completing a purchase online and picking up the car at the dealership.
Even if customers purchase a car online, there still needs to be some face-to-face interaction, which is a good thing, but with this new model, the dreaded negotiating process at the dealership would be eradicated. Even if the auto companies wanted to circumvent the dealerships (which they don’t), they are unable to because of laws prohibiting direct sales in most states. Tesla has run into this issue, and it remains a hurdle for the company. It has physical locations that a consumer can visit to become familiar with the products, but they must go online on their own to purchase a Tesla.
So, without changing any laws on the books, what could a future direct-to-consumer sales model look like in the automotive industry?
The time is fast approaching when automotive manufacturers will add a shopping cart to their website. The industry is unique in many ways, from the products themselves to the shopping process consumers must go through. Many factors come into play when an automotive company decides to add eCommerce functionality to its website. These factors have a rippling effect that extends well beyond the website itself. Some are obvious, such as the technology and functionality that must be built into the site through the collaboration between marketers and tech experts. Others may not be so obvious, such as the impact on the manufacturer-dealer network relationship. While these aspects are much different from each other, they are equally as crucial in the success or failure of direct-to-consumer sales.
When looking at the technology and website functionality, it’s critical for automotive companies not to overlook the partners they choose to support their transformation efforts. First and foremost, does the partner have first-hand industry experience? Do they have a successful track record working with companies like yours? Partners should also have knowledge of various software vendors, the ability to implement the best solution that fits into the ecosystem currently in place, and the strategic vision to align with your goals.
To learn more about how eCommerce could affect direct-to-consumer sales models, what factors come into play when deciding to add eCommerce functionality to a website and the impact on auto manufacturers and dealers you can click here or download our perspective below.
