Shift Digital New Digital Shopper Study: The Good, The Bad and The Worthy Signs for Automotive Retailing In 2024

BIRMINGHAM, Mich., Jan. 31, 2024 /PRNewswire/ -- Hearing "I've got good news, and I've got some bad news" never puts one at ease, yet it summarizes the cyclical nature of the automotive industry. Few feel the ripples of those economic extremes, like car buyers and dealers. 

Shift Digital, a Birmingham, Mich.-based company providing technology solutions, advanced analytics, and support services in the automotive, hospitality, and manufacturer sectors, has released the 2024 Digital Shopper Study showcasing that despite high interest rates, with re-stocked inventories, consumers may be at the right place at the right time for a great deal. 

In addition, dealers are increasingly embracing digital sales tools to help close those deals.

Has a major cultural and technological corner finally been turned in automotive retailing?
Well, Shift Digital has some good news and some bad news with its latest survey.

"The key word to describe 2023 was 'adjustment'," said Phil Oriani, CEO, Shift Digital. "Consumers saw increased interest rates and higher prices, yet dealerships have inventory to increase choice and competition. Incentives on gas and electric vehicles create interest from serious and prepared buyers who have adapted well to researching and shopping online. It is now the dealer who must adjust to the changing landscape of a highly savvy shopper," Oriani said.

What Goes Down…

Sales leads, which involve proactive communication initiated by a vehicle shopper with the dealership, play a crucial role in the sales funnel of a dealership. These leads decreased 7 percent year-over-year due to the trifecta of increased interest rates, vehicle prices and inventory availability – the latter meant consumers hunted less for the right vehicle compared with sparse inventory the year before.

…Makes for Quality Leads!

According to Dan Reynolds, who heads Shift Digital's Advanced Analytics team, the improvements and reliance on online research and data access allowed for a more educated buyer and, therefore, a more serious shopper.

"The shopper became more of a 'serious buyer,' and as a result, sales were up year over year," Reynolds said.  "However, the challenge for dealers becomes the balance of responding too quickly to try and get a jump on the competition. The response needs to be solid; there is only one chance for a good first impression," Reynolds said.

(Quality) Speed Sells!

Reynolds suggested the ideal window for a dealer to respond to a lead falls within 20-30 minutes. Although a swift response is crucial, prioritizing speed over quality may result in rapid, low-quality responses failing to address customer inquiries, ultimately diminishing close rates. In scenarios where dealers delivered timely, high-quality responses, it paid off with higher close rates and sales efficiency, according to Shift Digital's study.

The Shift Digital material also noted that with fewer leads to respond to, response times improved by 11 percent year-over year. Retailers also saw a 24 percent overall increase in their ability to close sales over the same period.

Reynolds noted the ability for improved responses to buyers was largely a result of:

• Constantly improving digital retailing tools and experiences on dealer websites.
• Fewer leads narrowed the field for greater efficiency.
• More vehicles to sell, e.g., A greater need to engage and convert prospects.
• Higher-quality leads = more serious shoppers.

Drop Me a Line
According to Reynolds, another challenge for dealers remains "how" to contact these prospects.
For example, how dealers reply to leads plays a critical role in closing leads.

• Seventy percent of dealer website visitors are on a mobile device.
• Customers respond to text or email nearly three times more compared to phone/conversation.
• Yet, dealers respond to nearly 80 percent of the leads they get by phone, and only one-third of leads they get via text.

"The key to text conversations is knowing you have permission to contact an individual in that manner as well as what device a salesperson is using to make that connection," Reynolds noted. "A dealer needs to be sure they are complying with the complex regulatory environment."

Reynolds noted it's the ideal time for dealerships to evaluate lead forms, ensuring customers are asked how they wish to be contacted and get express written permission to text them.

Clean It Up
Reynolds suggested a series of best practices dealers can follow to improve responsiveness and better customer engagement:

• Contextualize The Call to Action (CTA)
  Ease of navigation is a key part of the customer experience. For example, in the case of vehicles in transit to a lot, it's best to have a CTA that suggests "Reserve a Vehicle" vs. "Test Drive."
  
  
• High-Quality Imagery
  A VIN-specific vehicle image vs. a stock image is more enticing to a customer.
  
  
• Rerack Your CTA Stack
  Reynolds suggests "taking your customer where they need to go on a site and guiding them through the next logical step" is critical.
  
  
• Use of Color
  Using brand-approved colors is key, but using color can also be a tool to prompt the next customer's desired action, guiding them to the next step.
  
  
• Use of Digital Retailing Tools
  Reynolds noted that one in five dealers still does not use a digital retailing tool. However, the use of digital retailing by customers shot up last year by nearly 40 percent.
  
  "That means that approximately 20 percent of the dealers are not providing the tools a well-researched customer may expect when they are ready to buy," Reynolds said.

Download the complete report here.

About Shift Digital:
Shift Digital is a leader in marketing optimization and data activation. Our comprehensive data management technologies and support services help national brands and local retailers transform their digital marketing and sales initiatives. Shift Digital's technology helps customers eliminate blind spots in digital marketing programs by providing actionable insights. Backed by extensive research and continuous improvement, Shift Digital's cutting-edge technology empowers businesses to gain a comprehensive view of their customers' data, unveiling new ways to supercharge digital marketing efforts.

SOURCE Shift Digital