E-Commerce Strategy

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Comment by Ralph Paglia on June 25, 2009 at 3:20pm

A survey by the National Automobile Dealers Association (NADA) indicates that e-commerce is paying off handsomely for car dealers that have a well-established Internet presence.

According to NADA, dealerships that have been operating Web sites since 2000 sell some 18 new vehicles per month, compared to just 9 new vehicle sales for those that launched sites in 2007 or 2008.

"The more they work at it, the better they get at it," said NADA chief economist Paul Taylor. "There's a learning curve."

More Dealers Embracing the Web

The survey found that the share of dealerships advertising their Web sites jumped nine percentage points in the past year, from 74.1 percent in 2007 to 83 percent in 2008. That figure has been increasing steadily since 1997, the first year NADA surveyed dealers about their Internet Advertising, when 47.1 percent of dealerships has an online presence.

Notably, 62.1 percent of dealerships who advertise their Web sites have consummated sales as a result.

Sites are also getting more traffic than ever before. In 1997, only 8.2 percent of dealer Web sites reported more than 500 visitors per month. That number jumped to 21.2 percent this year.

Sites Becoming More Sophisticated

Not only are more dealerships establishing a Web presence, 98 percent have established interactive Web sites that allow customers to send e-mail, order online or obtain financing online.

"A few years ago, dealerships were content to just have their name on the Web," NADA economist Jason Altman told the E-Commerce Times.

That dynamic is changing, according to Altman, because a growing number of dealerships are learning to harness the power of the Web and are becoming more adept at using it as a sales tool.

Altman pointed out that some car buyers will choose to visit a particular dealership simply because the dealer took the time to answer an e-mail query sent via the Web site.

More Than Sales

Dealerships are using their sites for more than sales, as some 52 percent allow visitors to schedule service appointments online, and 82.9 percent allow visitors to obtain stock quotes for auto manufacturers.

Other studies have highlighted the increasing appetite of car shoppers for the Web. A recent survey by research firm Gartner Group showed that from September 1999 to March 2000, 45 percent of the 40,000 households surveyed used the Internet at some point in the car buying process. Three percent bought their cars online.

Only two years ago, the percentage of online shoppers that used the Internet for any part of the car buying process was less than 25 percent.

The Washington D.C.-based NADA represents 19,300 franchised new car and truck dealers.