Over the last 20 years, there has been a change in the automotive market due to an upward trend in online car sales, especially thanks to marketplaces, like Vroom. Moreover, there is a decrease in overall sales, which requires more cost-effective strategies for car and part sellers.
All it has been more emphasized by the vicious COVID-19 pandemic that has made people locked down and supply chains all over the world have been compromised and they have created a drop in offline car purchases. On the contrary, the automotive eCommerce market has had a surge in sales since 2021. The reason behind this rise is a lack of physical sellers for customers who have been willing to purchase a car.
As auto buyers have begun to order cars from eCommerce stores and it has become a widespread trend, offline-only automotive stores have struggled to win customers back even after COVID restrictions were lifted. Surprisingly, the proportion of US customers who buy cars online almost doubled from 32% to 61%. It is quite a spike for about two years.
Based on these rough statistics, car eCommerce is a rising market with enormous potential. In case you are looking for ways to obtain a bigger piece of the market, this post may give you some advice to go up and stay in leading positions.
Automotive eCommerce, often known as automotive electronic commerce, describes the online purchasing and selling of automobiles and their parts. This can be done using a variety of tools, including mobile tablets, PCs, and phones.
Additionally, the process of selling cars online need not be compartmentalized. Physical sales are frequently conducted in addition to online sales. For instance, a new car might be sold on a physical lot while its aftermarket parts are bought online.
Automotive retailers are adopting an increasingly omnichannel strategy for selling, whereby customers may use both physical and digital channels to make an informed purchase, similar to many other digital commerce sectors.
eCommerce takes the lead in the whole Automotive Industry
The total number of cars sold in the United States has decreased dramatically during the past 20 years. Approximately 9 million automobiles were sold in 2000. Only 3.5 million cars were sold in 2020, a significant decline.
The COVID-19 pandemic, which had an impact on physical sales in every sector of the economy, may have resulted in a low figure in 2020. But previous to the pandemic, as the graph above illustrates, sales had already fallen very significantly in 2019.
Despite the gloomy news, there is one positive development for the automotive industry: auto and car parts eCommerce. Online auto sales have increased dramatically since 2010, reaching close to 100%.
As a result, the auto industry has further switched its focus toward an online model in order to more effectively sell both vehicles and auto parts. By redesigning their websites, putting a priority on practicality, and prioritizing digital ads, companies like Ford have given their car eCommerce websites and social media presences more importance than ever before.
How eCommerce can be beneficial for the automotive industry
The automobile industry and, especially, distributors have been compelled to react swiftly as more and more consumers continue to make purchases online, as is the case throughout the majority of American sectors. Automotive companies who had been reluctant to depart from the tried-and-true strategy of physical sales were pressured to change course, whether or not they were prepared to do so.
The benefits of automotive eCommerce stores are significant — for both customers and automotive businesses — and can help raise revenue across the entire value chain. This is a positive development for firms.
Effectively expanded customer list
In the past, car dealerships have mostly concentrated on the domestic market and specific areas, using old-school promotion (TV and radio commercials) to bond with the local residents.
Applying eCommerce eliminates restrictive geographic boundaries and increases sales in many marketplaces. Customers can shop for cars on numerous websites across a region or perhaps the entire United States rather than driving to their neighbourhood dealership.
The ability to extend into new markets and market segments thanks to an eCommerce model makes it simpler than ever for a bigger audience to shop and buy online.
Optimize expenses and business processes
Automotive firms have experienced a huge shift as a result of eCommerce, not just in terms of their ability to reach new markets but also in terms of how they view their own supply chain.
In the traditional dealership approach, vehicles sit on the lot until they are purchased, consuming valuable space. However, thanks to an internet purchasing approach, businesses may now increase their inventory to include cars that are not on lots but rather in factories.
By using this strategy, businesses can reduce the number of dealerships while saving money on lots and real estate costs. When buying an automobile, it gives clients a wider range of possibilities.
Acquiring additional revenue streams using Omnichannel marketing
Following the pandemic, many industries in the US, the automotive sector is no exception, have experienced a revitalization thanks to the omnichannel marketing and sales strategy.
The omnichannel strategy synchronizes the efforts of a local dealership and even an internet store, as opposed to their separate silos. Customers interested in a vehicle can examine it online and schedule a test drive before making a purchase.
In the end, this expands the options available to the consumer and the dealership along the conversion path, increasing potential income and improving the user experience.
A customized shopping experience
Automotive businesses and dealerships, in particular, are better equipped to shape their customer experiences in a way that is universal and less susceptible to variations caused by salespeople with an online business model.
A business can enhance the purchasing experience through an eCommerce platform by having a customized eCommerce site or independent stores. Organizations can assist consumers in finding the new car or automotive parts they need by directing them on the proper path through contextual and targeted advertising.
Customers may now simultaneously explore cars and compare brands in showrooms, browse product information and product pages, and even order auto parts. The automobile eCommerce platform manages and keeps an eye on all of this.
Top 10 examples of Automotive eCommerce stores
The ten auto brands listed below are committed to delivering excellent customer experiences by developing their websites using the automotive eCommerce platform that eventually increases market share, sales, and revenue.
- Volvo Cars Collection - 100% full retail support cycle, supports 6 languages, distribution to 120 countries.
- Autoplicity - more than 10’000’000 products and 8’000 manufacturers, 20x traffic and sales growth within 6 years, 8’000’000 unique visitors in one year.
- xDalys - 75% more products in the database and translated to 3 more site languages.
- Empire Covers
- Millers Oils
- Diesel Parts Direct
- Red Line Oil
- Warn Industries
Boosting Automotive Ecommerce Sales. Instruments’ overview
Organizations that generally relied on physical sites are finding the automotive eCommerce strategy to be increasingly appealing. Automotive firms must understand how and where to reach their target audience as they expand into the digital sphere if they want to effectively communicate with them.
The development of online showrooms is yet another outcome of COVID-19. Showrooms were a productive setting for advertising vehicles prior to the pandemic.
Organizations can combine the benefits of traditional dealerships and internet businesses with a virtual showroom. Automotive businesses can instantly bring vehicles to life by combining eye-catching pictures that highlight the aesthetic look with technical details.
Word-of-mouth is still important in online environments, and it is much more so for a company that is just starting out online.
A company in the automobile industry that is proud of the work it produces can use customer evaluations as a platform to emphasize its strengths and the calibre of its clientele.
A firm does not have to start from scratch when attempting to expand into online marketplaces.
Utilizing already established markets like Amazon and eBay allows automobile businesses to tap into a customer base on platforms that have a successful track record.
The digital ad has altered how products are sold online and has the power to succeed or fail in a company's online endeavours.
Digital ads, whether on Google, Bing, or social media, can promote and display vehicles. With customized marketing, an advertisement will show up in front of someone when they search for anything associated with a particular car or brand. This can increase a brand's overall reach and result in quick sales.
Social media marketing
Today's society is constantly influenced by social media. Organizations can promote their products and foster participation by setting up pages on various social media platforms like Facebook and Instagram.
Involvement is the key to success. A company will eventually see bleed-through into its revenues if it can establish a reputation on social media, whether through word of mouth or superior customer service.
It has been a long time coming, but the car industry is finally making the transition into the realm of eCommerce.
More than 99 percent of respondents to an AutoTrader study on the car buyer of the future said they were unhappy with the way they were able to purchase a car.
This information emphasizes the necessary adjustments to the automotive industry. If anything, the pandemic may have provided many car companies with the final push they required to develop and update their methods for reaching customers and selling their products. The automotive shift online could not have occurred at a better moment and will enable this historically innovative industry to continue expanding, with over 60% of retail sales in 2022 anticipated to be eCommerce-based.