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Archive for June, 2014

Virtual Car Shopping?

Posted by carsdiva on June 4, 2014

The Internet has already changed the way we car shop.  Consumers spend less time at dealerships and more time online prior to making a purchase, (1.4 showroom visits to be exact.) But what about 5 years from now?  Imagine an experience achieved by virtual reality.

Audi_City_London_Architecture-515_RZ_1Think about what happened in other retail industries—  most notably publishing, electronics, and entertainment.  Along came Amazon and Netflix, and the traditional retailers either adapted or were doomed to fail (as, unfortunately, many of them did.)  In fact, leading retailers in these industries today collect more than 50% of their revenue online.

So what does that mean for automotive retailers?  A recent study suggested that 5% of all cars will be sold online by 2020.  Car companies are already starting to do this, and the challenge is in creating a seamless online and offline experience.  Furthermore, the trend is moving toward digital retail stores in the heart of the city– combining the living and working environment with the automotive experience.  (Sound familiar, Tesla?)  The focus becomes centered on creating a memorable and positive experience for the car shopper.

Audi, in particular is ahead of the curve, having opened digital showrooms in London and Beijing.  The Audi City Londoncustomer can digitally create and configure a vehicle as they watch it come to life.  For London Audi City, this approach has increased new car sales by 60-70%, and delving further, 75% of the orders were placed by first time Audi buyers.  It’s estimated that car makers will open about 100 of these flagship city-center stores globally by the end of the decade.  The idea being a one-stop shop, aimed at providing a unique brand experience.

Nowadays, consumers walk into a dealership already prepared, informed, having done their homework.  Therefore the role of the dealer is no longer an informational source, but a product experience provider.  So the question then becomes, will these city-center stores prevail to create the experience, while the car is later delivered?  Or will dealerships disappear altogether as car shopping transitions to an all-online experience?  The concept is not all that foreign…

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